Export earnings from Australia’s mineral resources hit a record $26.5 billion in the September quarter, according to a release from the Australian Bureau of Agricultural and Resource Economics.
Export earnings from Australia’s mineral resources hit a record $26.5 billion in the September quarter, according to a release from the Australian Bureau of Agricultural and Resource Economics.
The increase of $829 million from the previous quarter was attributed to higher export prices and rising export volumes for more than half of Australia’s mineral and energy commodities.
Crude oil was the most lucrative commodity, with earnings up 69 per cent to $2.3 billion, due to a large increase in export volume.
Nickel also performed strongly, with export earnings up by 62 per cent to $1.7 billion, while iron ore increased by 11 per cent to $3.9 billion.
Petroleum refinery products, aluminium and LNG also increased in export prices.
The major decreases in the quarter were recorded by steaming coal and copper, both down 8 per cent, and lead, down 17 per cent, with most of the decreases across the board attributed to reduced volumes of exports.
Impressive production targets for major minerals and energy commodities were recorded in the September quarter, with almost two-thirds recording an increase in the period compared with the June quarter.
The biggest performers were: crude oil, with a production increase of 38 per cent; refinery LPG and uranium oxide, both up 29 per cent; and lead bullion and refined nickel production, up 26 and 21 per cent respectively.
At the other end of the scale, production of refined lead fell by 62 per cent, refined tin output fell by 35 per cent and refined gold by a quarter of its previous level.
Investment in mining developments has also reached record levels, with the total value of major projects in Australia reaching almost $35 billion, according to a separate report released by the bureau last month.
Just more than one third of the 94 advanced minerals and energy projects being undertaken nationally were located in WA, with a further 174 less advanced projects taking place across Australia.
However, the report found skills shortages and higher construction costs were expected to put pressure on developments.
Abare acting director Karen Schneider said that, due to the large number of projects under construction or committed to, project cost pressures and delays were unlikely to ease in the short to medium term.
Economic forecaster and industry analyst BIS Shrapnel echoed these concerns in a report last week, predicting that skilled labour and materials shortages would restrict growth, while indicating that commodity prices were likely to retain their high levels in 2007.
The report also said that investment in the mining sector would increase over the next two years by 11 per cent, peaking in 2007-08, with exploration spending expected to increase and output levels to grow.
BIS Shrapnel senior economist Richard Robinson said commodity prices would begin to correct as the gap between supply and demand narrowed.
“Over 2008 and 2009, a slowing world economy and a significant increase in global production as a result of the current investment boom will see an oversupply in some commodities and force dramatic price falls,” he said.
Mr Robinson also said a serious downturn in China would mean a larger than expected correction in prices, investment, exploration and production.
