The December 2023 edition of the Resources and Energy Quarterly (REQ) from the Department of Industry, Science and Resources has forecast that strong investment in the industry should see continued growth over the next few years, despite lowering commodities prices. 

The report predicted export values to ease to $408 billion in 2023-24 and $348 billion by 2024-25, down from a record $466 billion in 2022-23, principally due to projected falls in commodity prices.

This outlook for exports is consistent with previous forecasts in June and September.

At the same time, the department’s Resources and Energy Major Projects report (REMP) found that the outlook for resources investment remains healthy, particularly for the critical minerals that are crucial for low-emissions technologies needed to help the world decarbonise.

The REMP report found a 75 per cent increase in the value of committed critical minerals projects over the past year, from $6.7 billion in 2022 to $11.8 billion in 2023. 

The REMP reported that there were 421 resources and energy projects under development in Australia at the end of October, up from 393 projects a year earlier. This includes 86 committed projects – where a final investment decision (FID) has been taken – worth $77 billion and 46 projects worth $30 billion at the advanced feasibility stage.

The value of project completions rose for the third consecutive year, with 29 projects valued at $21 billion achieving commercial production over the year to October 2023.

In 2023, to improve the quality of data in the publication, there were changes to how projects are classified at different stages of development. This means some individual categories are not comparable across past reports. 

The REQ found that iron ore prices have held up more strongly than previously forecast, on the back of positive sentiment from China’s economic stimulus. It forecasted iron ore export earnings to increase to $131 billion in 2023-24, up from $124 billion in 2022-23, before declining to $102 billion in 2024-25.

In line with previous forecasts, LNG earnings are set to ease from $92 billion in 2022-23 to $73 billion this year and $64 billion in 2024-25.

Lower world prices for lithium means Australian lithium exports are forecast to decrease to $14 billion in 2023-24 and stabilise at around $15 billion in 2024-25, down from the record $20 billion in 2022-23.

Despite an increase in volume, lower prices mean earnings from metallurgical coal, used for steelmaking, are expected to ease to $52 billion in 2023-24 and $41 billion in 2024‑25, down from 2022-23’s $62 billion. Thermal coal earnings are forecast at $36 billion in 2023-24 and $29 billion in 2024-25, down from $66 billion in 2022-23.

Federal Minister for Resources and Northern Australia, Madeleine King, said that the strong outlook for critical minerals projects supports the Federal Government’s strategy to become a major exporter of clean energy by 2030.

“Australia’s resources sector remains the engine room of the nation’s economy,” Ms King said. 

“Resources are critical not only to our prosperity, but to our commitment to reducing carbon emissions and reaching net zero.” 

Ms King said that the REMP report showed the strong state of investment in Australia’s resources sector and the continued growth in the nation’s critical minerals sector.

The December 2023 Resources and Energy Quarterly and Resources and Energy Major Projects reports are available on the Department of Industry, Science and Resources website.

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