Australia’s mining and energy exports are set to hit a record high of more than $400 billion as fallout from Russia’s invasion of Ukraine worsens global coal and natural gas shortages and spirals raw material prices.
Federal government trade data to be released on Monday shows a 26% increase in export earnings over the past fiscal year, from $320 billion in 2020-21 to around $405 billion.
As countries around the world scramble for non-Russian sources of fossil fuels in a bid to deprive Moscow of the revenue it needs to fund the war in Ukraine, Federal Resources Minister Madeleine King said the record export earnings underscored Australia’s role as a “stable and reliable global supplier”.
“Australia’s resources and energy sector continues to underpin the Australian economy and support international energy security during the global turmoil caused in large part by Russia’s invasion of Ukraine,” he said. she declared. “The Australian Government is committed to ensuring that the benefits of Australian exports benefit all Australians, as well as the 303,000 Australians who work directly in the resource sector.”
Revenues from coal and liquefied natural gas (LNG) – the country’s second and third largest exports – have both more than doubled in the past 12 months, trade figures show. After global energy markets collapsed due to pandemic shutdowns that weighed on demand, benchmark Australian LNG cargo prices in Asia have since rebounded sharply from US$2 per million thermal units to an average of US$28.38 over the past financial year, which has led Australia’s LNG export revenue to be estimated at $70 billion.
Australia’s exports of thermal coal – the type of coal that is burned for power generation – are expected to have jumped from $16 billion to $39 billion during the year due to historically high prices, while the metallurgical coal used by the steel industry increased from $23 billion to $60 billion.
The longer-term outlook for coal, however, remains deeply uncertain and will largely depend on how aggressively countries seek to decarbonise their economies by switching to cleaner energy sources. Major mining groups, including Australia’s BHP, are increasingly selling off coal-related assets, while a growing number of banks, insurers and institutional investors pledge not to make new investments in the sector, citing concerns about the contribution of fossil fuels to global warming.
Iron ore, the key raw material for steelmaking, remains by far Australia’s most valuable export. New trade figures estimate iron ore export earnings hit $133bn for the year thanks to average prices of between $110 and $140 a tonne, but warn profits will decline over the next two coming years as Brazilian mines ramp up production volumes and global demand picks up. to slow down.