Energy and battery minerals drive Australian exports to record highs
PERTH (miningweekly.com) – Australia’s energy resources and exports are set to hit a record A$450 billion in 2022/23, with exports of battery metals including copper, nickel and lithium , expected to more than double compared to 2020/2023. 21 wins.
In the latest Resources and Energy Quarterly, the Office of the Chief Economist forecast that the current surge in resource and energy export earnings has been driven by soaring energy prices and weak Australian dollar against the US dollar.
Prices for gas, liquefied natural gas (LNG) and thermal coal are at record highs as countries in the northern hemisphere try to build up stocks ahead of winter. Drought in large parts of western Europe, the United States and southern China has exacerbated energy shortages, the report said.
High energy prices have led to the reduction of energy-intensive metal smelting/refining activities, particularly in Western Europe. These production cuts partly offset the impact of lower demand for metals.
Despite lower export volumes, LNG revenues are expected to be A$90 billion in 2022/23, and thermal and metallurgical coal are both expected to bring in over A$57 billion. This is two to three times more than in 2020/21, when the Covid-19 pandemic saw energy prices fall sharply. Revenues from these commodities are expected to fall back to pre-Covid-19 levels after 2023/24 as supply improves.
Australia’s LNG export volumes are expected to decline and stabilize at around 81 million tonnes through 2024, after reaching 83 million tonnes in 2021/22. Meanwhile, higher production in New South Wales and Queensland is expected to boost Australia’s metallurgical coal exports from 171 million tonnes in 2020/21 to 180 million tonnes by 2023/ 24.
A resolution of recent supply disruptions is expected to increase Australian thermal coal exports from 192 million tonnes in 2020/21 to 203 million tonnes by the end of the forecast period.
Minister for Resources and Northern Australia Magdalene King said strong export earnings from the resource sector were supporting Australia’s economy and providing a welcome boost to government revenue ahead of the October budget.
“The Resources and Energy Quarterly Report for the September 2022 quarter underscores the sector’s importance to Australia’s continued economic well-being and shows that the outlook for Australian resources and energy remains strong” , King said.
“The Treasurer noted that the current high prices have contributed to an A$27 billion increase in the budget result for 2021/22 as the sector continues to support our economy and over 270,000 jobs.”
The record forecast follows last year’s A$422 billion outturn and comes despite falling iron ore prices and demand. Driving the rise in 2022/23 is the search for alternative energy sources following Russia’s invasion of Ukraine and a surge in the US dollar against the Australian dollar.
King said Australia was seeing strong growth in demand and prices for minerals that are crucial for low-emission technologies, such as lithium, copper and nickel, due to growing demand for electric vehicles, batteries and cleaner energy.
“The Australian Government strongly supports our critical minerals sector, which provides the critical minerals needed to help Australia and the world meet our net zero commitments,” King said.
“Lithium exports continue to grow, driven by demand for batteries and electric vehicles. Lithium export revenue is expected to increase more than tenfold in just two years, rising from AU$1.1 billion in 2020/21 to nearly AU$14 billion in 2022/23 before falling back to around AU$13 billion. Australians in 2023/24.
“Lithium export volumes are expected to grow steadily as Australia maintains its position as the world’s largest lithium producer,” she said.
Australian lithium production is expected to increase from 247,000 t lithium carbonate equivalent (LCE) in 2020/21 to 387,000 t in 2022/23 and 469,000 t LCE in 2023/24, while export volumes Australia is expected to increase from 157,000 t in 2021/22 to 202,000 t in 2023/24, supported by Australian nickel requirements for the transition to low emission technologies.
Australia’s copper exports fell to 802,000 t in 2021/22 as scheduled maintenance reduced production, but copper exports are expected to increase to 977,000 t by 2023/24 as production from new mines and mine extensions will be commissioned.
Meanwhile, the Resources and Energy Quarterly attributes the drop in iron ore prices in the last quarter to slowing global growth and weak housing in China. Iron ore prices are expected to fall further as global supply increases faster than demand.
Iron ore export earnings are expected to decline from A$119 billion in 2022–23 to A$95 billion in 2023–24, due to moderating prices, more modest growth in global production of steel and the increase in the supply of iron ore.
Australian iron ore export volumes were up 0.9% year-on-year in the first half of 2022, with new fresh supplies starting to come online from major producers. Exports are forecast to increase by 3.1% in 2022-23 to reach 903 million tonnes, and increase by 3.8% to reach 937 million tonnes in 2023-24.
Lower prices over the outlook are expected to push Australia’s iron ore export earnings from A$134 billion in 2021–22 to A$119 billion in 2022–23 and then to A$95 billion. Australian dollars in 2023–24.
Meanwhile, Australian gold mine production in the June quarter of 2022 rose 0.9% year-on-year to 81t. Labor and skill shortages were still affecting mining operations, but production was 10% higher than in the disrupted March 2022 quarter, the report said.
Gold revenues are projected to decline from A$23 billion in 2021–22 to around A$25 billion in 2023–24, as higher export volumes outweigh lower prices.