According to the latest Resources and Energy Quarterly, resources and energy exports are still on track to reach a record $293 billion in 2019/20, slightly down from the $299 billion expected pre-COVID.
Iron ore demand has almost fully recovered in China and it remains on track to be first single Australian commodity to break the $100 billion mark in annual export value. Furthermore, on current trends, Australia is expected to overtake China next year as the world’s top gold producing country to reach $30 billion in exports.
The report also found mining directly accounted for 25 per cent of the growth in Australia’s GDP in the 12 months to the March quarter.
Federal Minister for Resources, Water and Northern Australia Keith Pitt said while commodities and export earnings will continue to be affected by global economic conditions, investment in the resources sector remains strong.
“Companies are investing an estimated $38 billion this financial year, which is an increase of 15 per cent. Investment the following year is expected to remain stable,” Minister Pitt said.
“The strong investment by mining companies in Australia is a good indication of long term confidence in the sector. Resources will continue to be the foundation of Australia’s economic success.”
Employment in resources fell by 3.1 per cent from 240,926 to 233,311 between February and May compared to 6.2 per cent across all industries.
Reduced industrial activity as a result of COVID, especially in manufacturing, will affect metallurgical and thermal coal prices over the next two years, however export volumes will remain steady.
LNG prices are expected to fall by around 25 per cent over the next years, largely as a result of lower oil prices.