Australia’s mining and energy export revenues are forecast to climb 3% to a record A$419 billion ($286 billion) in the year to June 2023, buoyed by surging coal and gas prices in the wake of Russia’s invasion of Ukraine, the government said on Monday.
Sanctions on Russia for what Moscow calls a “special military operation” to disarm Ukraine have sent prices for liquefied natural gas (LNG) and coal to all-time highs, underpinning record revenue for Australia’s second- and third-largest exports.
“The outlook is for the prices of energy commodities to remain strong for longer than previously forecast, as Western nations look for alternatives to Russian energy supplies,” the Department of Industry said in its resources and energy quarterly report.
However it said higher global interest rates to combat inflation could hurt global economic activity and in turn lower resource and energy export earnings.
The value of LNG exports is forecast to jump 19% to A$84 billion in the year to June 2023, even as volumes are expected to slip by 3% with output declining from gas fields feeding the North West Shelf and Darwin LNG plants.
Exports of thermal coal used in power generation are expected to rise 15% to A$44 billion on strong prices and a small rise in volume, as Australian coal is considered the main alternative to Russia’s higher coal grades, the government said.
Revenue from metallurgical coal used in steelmaking is forecast to climb 3% to A$60 billion.
“With inventories of energy in the Northern Hemisphere well below normal, any supply disruptions will result in more price surges,” the report said, pointing to potential declines in coal output due to heavy rains lashing eastern Australia.
Offsetting gains in LNG and coal, the value of Australia’s top export earner, iron ore, is expected to fall by 12% to A$116 billion in the year to June 2023, with the average price seen falling to $99 a tonne from $119.
($1 = 1.4676 Australian dollars)
