Australian Resource Exports Surge As Project Pipeline Grows

Australian resources and energy exports will earn a record A$459-billion in 2022–23, before easing to A$391 billion in 2023–24, new data from the Department of Industry, Science and Resources shows.

The latest Resources and Energy Quarterly publication forecasts combined export earnings for resources critical to low-emissions energy technologies, such as copper, nickel and lithium will reach almost A$33-billion in 2022–23 compared with A$22-billion in 2021–22.

Minister for Resources and Northern Australia Madeleine King said the reports underlined how Australia resources and energy exports continue to support the Australian economy at a time of slowing global growth.

“The results underline the importance of the resources and energy sector to Australia’s economic wellbeing, accounting for around 10% of gross domestic product and directly employing more than 250 000 men and women, mostly in regional Australia,” King said.

She said while energy prices have eased in recent months, they generally remain well above levels prior to Russia’s war on Ukraine. Domestically, the volatility in energy prices across the economy are putting unsustainable pressure on Australian households and industry.

“Demand for minerals crucial to new low-emissions technology, such as lithium, copper and nickel, remains strong and is supporting prices,” King said.

“These materials, along with other critical minerals and rare earths, will be crucial to low-emissions technologies such as batteries, solar panels and electric vehicles, and will help Australia and the world to meet net-zero commitments by 2050.

“Demand for Australia’s lithium remains strong. The Resources and Energy Quarterly forecasts lithium export earnings to increase more than ten-fold in two years, from A$1.1-billion in 2020–21 to A$16-billion in 2022–23 and A$17-billion in 2023–24, making lithium Australia’s sixth largest resources and energy export commodity.”

Australia’s lithium production is forecast to grow from 335 000 t of lithium carbonate equivalent in 2021–22 to 399 000 t in 2022–23 and 470 000 t of lithium carbonate equivalent 2023–24.

Australia’s copper exports fell to 813 000 t in 2021–22 as scheduled maintenance reduced production. Copper exports are expected to grow to 895 000 t by 2023–24 as production from new mines and mine expansions comes online. Weaker prices are forecast to see Australia’s copper export earnings fall to A$12-billion in 2022–23, but increased production and export volumes are likely to increase export earnings to nearly A$13-billion in 2023–24.

Meanwhile, the recent high prices have boosted Australia’s nickel export earnings, which reached A$4.4-billion in 2021–22. Export earnings are forecast to rise by 17% to A$5.1-billion in 2022–23, before easing by 11% to A$4.5-billion in 2023–24. Australia’s nickel export volumes are estimated to rise from 157,000 tonnes in 2021–22 to 188 000 t in 2023–24, supported by the need for Australian nickel for the transition to low-emissions technologies.

Liquefied natural gas (LNG) earnings are expected to rise to A$90-billion in 2022–23 from A$71-billion last year, driven by a surge in international spot prices. After reaching 83-million tonnes in 2021–22, Australia’s LNG export volumes are forecast to decline then stabilise at around 81-million tonnes in 2024.

The Resources and Energy Quarterly forecasts total iron-ore export earnings to be around A$113-billion in 2022–23. With prices easing since June, the benchmark price for iron-ore in 2022 is forecast to average around A$100/t. In 2022–23, Australia’s export tonnages of iron-ore are forecast to rise to 875-million tonnes, a 2.5% increase compared with the previous year.

International coal prices have declined from record levels but remain historically high. Australia’s combined coal exports are forecast to earn A$132-billion in 2022–23. Higher metallurgical coal production is expected to lift Australia’s exports, from 163-million tonnes in 2021–22 to 183-million tonnes by 2023–24, while a gradual recovery from recent supply outages is expected to see Australian thermal coal exports rise from 196-million tonnes in 2021–22 to 203-million tonnes in 2023–24.

Meanwhile, Australian gold mine production in the September quarter 2022 was 5.4% higher year-on-year at 78 t. Production is forecast to increase to 329 t in 2023–24, as new projects and expansions of existing projects come on line, while gold earnings are forecast to rise from A$23-billion in 2021–22 to around A$24-billion in 2023–24, as rising export volumes outweigh lower prices.

MAJOR PROJECTS

Also released on Monday, the 2022 Resources and Energy Major Projects report highlights trends in project development and the scope of the potential pipeline of future investment.

This year’s major projects report shows significant growth in planned investment, including 134 projects in Australia’s new energy pipeline, up from 92 projects last year, with an estimated value of A$312-billion.

Across Australia, some 423 resources and energy projects were in the investment pipeline covering more than 30 different commodities. In the 12 months to October, 30 projects worth a combined A$13.6-billion were completed, with a further 83 projects, worth a combined A$83.1-billion having been committed. A further 192 projects with an estimated worth of between A$251.5-billion and $340.8-billion were in feasibility stage, with a further 118 publicly announced, with a conjoined estimated worth of between A$224-billion and A$267.3-billion.

Hydrogen projects accounted for an estimated A$266-billion worth of potential investment, lifting the estimated total value of projects in the investment pipeline to a range of A$572-billion to A$705-billion.

Oil and gas projects accounted for 55% of the projects committed in terms of value, with iron-ore accounting for 12%, coal for 9.1%, lithium for 5.6% and other commodities for 4.3%, while gold accounted for 3.9%. Infrastructure projects accounted for 5.4% of the committed capital.

Meanwhile, demand for new energy metals and minerals saw Australia’s critical minerals major project pipeline increase to 81 projects, with an estimated value of A$30-billion to A$42-billion. Over two- thirds of the projects on this year’s list will produce critical minerals that can support clean energy technologies, including graphite, rare earths, lithium, vanadium and manganese concentrates.

The report noted that expectations of higher demand for key battery metals was driving interest and investment in mine capacity and processing facilities, with interest growing in several major nickel, cobalt and graphite projects. Feasibility studies are also progressing for a number of rare earths projects. Several vanadium projects are also under development, with products from mineral concentrates to vanadium electrolyte for rechargeable vanadium redox flow batteries.

The addition of high purity alumina to Australia’s critical minerals list in 2022 reflects its broad-ranging economic and strategic importance, including its role as key input for ensuring the stability of lithium-ion batteries, with several major projects under consideration.

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