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Forecasts upbeat on future of Australia’s resources and energy exports

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By Colin Hay - 
DISR REQ Australian mining resources energy forecasts

The latest federal government resources and energy export earnings forecasts have registered an improvement over previous estimations.

The forecasts contained in the March 2024 Resources and Energy Quarterly (REQ) from the Department of Industry, Science and Resources (DISR) show earnings will fall by 11% in 2023–24 to $417 billion from 2022–23’s record $466b.

This is an improvement on REQ’s December forecasts of $408b in 2023–24, with 2024–25 earnings now expected to be $348b.

While the numbers are better than expected, the forecast is for a return to long-term trends over the coming two years on the back of softer world growth and improved supply.

Positive long-term outlook

The DISR is tipping an increasingly positive long-term outlook as prices stabilise and demand from India grows.

Minister for Resources and Northern Australia Madeleine King said the five-year outlook in the March quarterly report was very encouraging, with resources and energy exports continuing to underpin Australia’s economic wellbeing.

“While global prices are easing, the March 2024 REQ shows demand is likely to be sustained for commodities used in low emissions technologies, including iron ore, copper, aluminium and lithium,” Ms King said.

“Our resources and energy industries support more than 300,000 Australian jobs directly and indirectly, supporting regional communities and our national economy.”

Nickel and lithium rebound

While nickel and lithium prices have been pushed to five-year lows due to surging supply and softer growth in demand, the March report predicts that the medium-term outlook for local exports of the critical metals will remain substantial.

Higher volumes and rising prices are expected to push Australian copper export earnings to $12.1b in 2023–24 and $16.8b (in real terms) by 2028–29.

The numbers from the Office of Australia’s chief economist indicate that, despite world economic growth remaining soft, key markets continue to support commodity demand.

China will remain a huge influence on resource and energy commodity markets, but India is likely to account for a significantly larger share of world commodity demand by 2029.

Iron ore still strong

The March 2024 report predicts that despite weaker prices in recent months, iron ore exports are set to rise to $136b in 2023-24 from $124b in 2022–23, before easing back to $111b next year and around $83b by 2028–29.

Driven by lower prices, liquefied natural gas earnings are forecast to ease to $72b this financial year from $96b last year, before easing to $45b by 2028–29.

Earnings from metallurgical coal, used for steel making, are expected to be $56b in 2023–24, down from last year’s $62b, before easing further over the outlook period.

Thermal coal earnings are forecast at $36b in 2023–24, down from $66b last year, before easing further over the outlook period.