Report highlights run of record export earnings

The value of Australia's resources and energy exports is hitting record highs, according to the latest federal data. "Resource and energy export earnings are estimated to have reached a record $275 billion in the 2018–19 financial year and are expected to hit $285 billion in 2019–20,” Minister for Resources and Northern Australia Matt Canavan said. The figures are contained in the June 2019 Resources and Energy Quarterly, compiled by the Office of the Chief Economist in the Department of Industry, Innovation and Science, and released today. The estimates for this financial year were revised upwards - and the swing factor was iron ore prices. Chief economist Mark Cully said the fallout from the Brumadinho tailings dam collapse had led to a sharp drop in Brazilian iron ore exports, and this shortfall looked set to last at least two years. "The seaborne iron ore market is thus likely to stay tight, and prices elevated, out to at least 2021," he said. "Extra Australian output will partly fill the gap, as mining expands and disruptive weather in Western Australia recedes. The weaker Australian dollar outlook has also pushed up our 2019–20 forecast. " The resulting gains for export earnings are partially countered by deteriorating prices for thermal coal. "As a large producer and importer of thermal coal, China’s import policies, including extended customs clearance times, have added uncertainty into the market," Mr Cully said. "Seasonal factors appear to have had a larger than normal impact this year: the northern hemisphere — where most thermal coal is burnt — has emerged from a warmer than usual winter, which reduced heating-related energy use." Exports of iron ore were estimated to have reached $75.2 billion in value last financial year, coal $67.6 billion and LNG $49.7 billion. Industry call to implement policy change The release of the latest export figures sparked calls from resource industry group the AMMA for the Federal Government to implement the National Resources Statement and help stimulate further industry growth. “Employers are buoyed by the Office of the Chief Economist’s estimate that Australia’s resources and energy export earnings reached $275 billion in 2018–19,” AMMA head of policy and public affairs Tom Reid said. “This record surge of more than 20 per cent shows Australia is now reaping the benefits of the huge levels of investment in major resources and energy projects over the past 15 years. “It’s also another reminder of how significantly the resources and energy industry contributes to Australia’s economic well-being and living standards. “To underpin further industry growth and even greater national contribution, it is critical that industry and government work together on implementing the National Resources Statement during this term of Parliament.” While predicting a further spike in export earnings in 2019/20, the report had also warned of potential global economic headwinds, including weaker commodity prices, trade tensions and slowing production, Mr Reid said. “Australia has little time to waste basking in the success of our resources earnings – we must focus on keeping up the momentum started by the Resources 2030 Taskforce,” he said. “In particular, resources and energy employers are facing a number of future skills and labour mobility challenges that can be at least partially addressed by government and industry collaboration. “Further critical strategies include supporting industry through its technology and ‘big data’ transformation, unlocking new resources-rich regions through investing in productive infrastructure, and helping industry strengthen its ties and contribution to regional Australia.”

Report highlights run of record export earnings

Industry Queensland

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