Despite weakening prices in iron ore, the surging global demand for critical minerals necessary for new low-emissions technologies is expected to deliver a record windfall of $450 billion for Australia’s 2021-22 resources and energy exports.
The forecast was published in September 2022’s Resources and Energy Quarterly, compiled by the Department of Industry, Science and Resources, and predicted Australian resources and energy exports to earn a record $450 billion in 2022-23, before easing to $375 billion in 2023-24.
Federal Minister for Resources and Northern Australia, Madeleine King, said the strong export revenue driven by the resources sector is supporting Australia’s economy and providing a welcome boost to Government revenue ahead of the 25 October budget.
“The Resources and Energy Quarterly report for the September quarter 2022 underlines the importance of the sector for Australia’s ongoing economic wellbeing, and shows the outlook for Australian resources and energy remains strong,” Ms King said.
“The Treasurer has noted that the current high prices have helped contribute to a $27 billion boost to the budget bottom line for 2021-22, with the sector continuing to support our economy and more than 270,000 jobs.”
The record forecasts follow last year’s $422 billion result, and comes despite easing iron ore prices and demand. Driving the rise in 2022-23 is the search for alternative sources of energy following Russia’s invasion of Ukraine, and a surge in the US dollar against the Australian dollar.
Ms King said Australia is experiencing strong growth in demand and prices for minerals that are crucial for low-emissions technology, such as lithium, copper and nickel, due to growing demand for electric vehicles, batteries and cleaner energy.
“The Australian Government is strongly backing our critical minerals sector, which provides the crucial minerals needed to help Australia and the world meet our net zero commitments,” Ms King said.
The Resources and Energy Quarterly attributes lower iron ore prices over the past quarter to slowing global growth and weakness in China’s housing sector. Iron ore prices are expected to ease further, as world supply grows faster than demand.
Iron ore export earnings are forecast to ease from $119 billion in 2022-23 to $95 billion in 2023-24, reflecting moderating prices, more modest growth in global steel output, and rising iron ore supply.
The September 2022 Resources and Energy Quarterly is available on the Department of Industry, Science and Resources website here.