Short term losses, long term gains
While many Australians are worrying about rising electricity prices as well as gas prices, experts are predicting a decline in Australia's resources and energy commodity export earnings for the short term. A steady growth, however, is expected for the medium term.
Australia is a large producer of resources covering the exploration, extraction and processing of various minerals, coal, uranium, iron ore, gold, lead, copper, diamonds, nickel and more.
Non-renewable energy sources like coal, uranium and gas complement plentiful natural and renewable resources such as wind, solar and bioenergy.
In Resources and Energy Quarterly's March Quarter 2013 report, released by the Bureau of Resources and Energy Economics (BREE), resources and energy commodity export earnings are due to decline to $186 billion in 2012-13.
"A forecast fall in the prices of key Australian mineral exports from their peaks in 2011, coupled with a high Australian dollar, is expected to result in a 3 per cent decline in the nominal export value of resources and energy exports in 2012-13, relative to 2011-12," commented executive director of BREE and chief economist, Professor Quentin Grafton.
"Iron ore prices, which have been particularly volatile over the last six months, are one of the main drivers of the lower export values. Iron ore export earnings are forecast to decrease nine per cent to $57 billion, despite a forecast 11 per cent rise in volumes."
It is projected that between 2013 and 2018 there will be a strong growth in the value of commodities, boosting Australia's export earnings.
The export volume of iron ore is expected to rise at an average yearly rate of ten per cent. For thermal coal, this is 11 per cent, and for metallurgical coal this is seven per cent.
Liquefied natural gas (LNG) however is slated to be the main source of export growth in the medium term for energy commodities, as it's in high demand from gas suppliers.
Increasing from 19 million tonnes in the 2011-12 period, exports are predicted to reach 88 million tonnes in 2017-18 as Australia has invested heavily in LNG production.
The report predicts that in 2017-18, LNG will become Australia's second highest export earner with $61 billion in exports, compared to earnings of $12 billion in 2011-12.
The report also states that the value of energy exports is projected to increase considerably up until 2018, while mineral commodities are going to peak in 2014-15.
Posted by Callum Fleming