Australian resources sector faces easing export earnings amidst global slowdown
Export earnings for Australia’s resources and energy sector are forecast to decline due to weaker global growth and commodity prices, despite ongoing demand for critical minerals and support from government policies.
Australia’s resources and energy sector is seeing a shift from the unprecedented highs of 2022-23, influenced by weaker global growth, lower commodity prices, and a stronger Australian dollar.
Export earnings are forecast to ease to $372 billion in 2024–25, down from $415 billion in 2023–24, according to the September 2024 Resources and Energy Quarterly (REQ), published by the Department of Industry, Science and Resources. The report predicts earnings will decline further to $354 billion by 2025–26, before stabilising and beginning to recover.
Despite this decline, Minister for Resources and Northern Australia Madeleine King highlighted that, “The resources and energy sector continues to underpin Australia’s economy and support more than a quarter of a million direct jobs.”
Gold prices remain high, and iron ore exports are on the rise, though lower prices for commodities like iron ore and LNG are weighing on the overall outlook.
While bulk commodity prices have dropped, Minister King also pointed out the ongoing demand for resources essential to low-emissions technologies, including copper, aluminium, and lithium.
“Lower prices for critical minerals underline the need for government support for our critical minerals sector through policies such as the Production Tax Incentive,” Minister King said.
Efforts to support Australia’s critical minerals sector have been bolstered by initiatives like the newly formed Minerals Security Partnership Finance Network. This partnership, which includes countries such as the United States, India, and Japan, aims to boost investment and job creation in the sector. Minister King noted, “The Albanese Government is stepping up to lead on critical minerals for the benefit of Australia and the world.”
Mining remains a central pillar of Australia’s economy, contributing strongly to export earnings and helping to achieve the government’s second consecutive budget surplus. In 2023–24, iron ore exports generated $138 billion, metallurgical coal $54 billion, thermal coal $37.2 billion, and gold $33 billion. Uranium exports also increased, earning over $1 billion and forecast to grow to $1.7 billion by 2025–26.
However, economic challenges are emerging, including concerns over demand from China and continued global uncertainty. These factors are impacting growth in demand for Australia’s key export commodities, and this volatility in commodity prices leaves the nation’s economy exposed. According to Tania Constable, Chief Executive Officer of the Minerals Council of Australia, “While it is clear mining remains the cornerstone of the economy, there are distinct challenges emerging.” She emphasised the need for policies that enhance productivity and attract investment to maintain economic resilience.
Looking ahead, exploration activity remains strong, with exploration levels for most industries above the recent average since 2020. The sector’s future success will depend on investment in both traditional resources and future-facing commodities such as critical minerals to weather economic shifts and continue driving growth.
