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PERTH (miningweekly.com) – Softer commodity prices would result in a 1.4% decrease to Australia’s mineral and export commodity earnings during 2015, the Bureau of Resources and Energy Economics (BREE) reported on Friday.
During 2014/15, mineral and energy commodity export earnings would fall to A$192-billion, compared with A$195-billion in 2013/14.
In its quarterly resources and energy report, BREE reported that export volumes were forecast to continue to grow in 2014/15, but softer commodity prices as a result of ongoing oversupply in key markets would weigh on prices.
Over the next five years, exports were projected to rebound to total A$274-billion in 2018/9, supported by increased liquefied natural gas (LNG) and iron-ore export volumes.
“The prospects for the resources and energy industry remain positive. Continued economic growth in highly populated emerging economies will sustain increased demand for both resources and energy commodities into the future,” said BREE deputy executive director Wayne Calder.
“Closer to home, Australia is moving decisively from the investment phase of the mining boom to the production phase,” Calder said.
“We will continue to see expansions in capacity from the Australian resources and energy sectors with increasing supply of iron-ore and coal, as well as the commencement of major new LNG projects across Australia.”
In 2013/14, mining industry capital expenditure was A$90.3-billion, down 4.6% from 2012/13.
BREE noted that as high-value LNG projects were completed over the coming years, the stock of investment in the sector would be drawn down.
“The downturn in investment has come from a very high point, and while investment activity has slowed, a substantial number of resources and energy projects continue to be developed in Australia.”
First LNG shipments from the East Coast are expected to start by the end of 2014, rapidly ramping up over the period to 2019, to make Australia the world’s largest LNG producer.
Meanwhile, despite the forecast decline in export earnings in 2014/15, the outlook for Australia’s resources and energy exports remains positive, BREE said on Friday.
For several commodities, including iron-ore and coal, prices are projected to rebound after 2016 as consumption growth starts to catch up with the recent jumps in production capacity, and the recent investment in the sector would contribute to a rapid increase in Australia’s export volumes.
BREE noted that Australia’s earnings from resources and energy exports are projected to reach A$251-billion in 2018/19. Resources and energy export earnings were projected to total A$115-billion and A$136-billion in 2018/19, respectively.