Australian resource and energy exports are forecast to set a record of $464 billion in 2022-23, on the crest of a new wave of surging bulk commodity revenues.
In what will be the second such wave to benefit the country in the past 2-3 years, the newly released March 2023 Resources and Energy Quarterly (REQ) publication from the Department of Industry, Science, Energy and Resources (DISER), forecasts the global energy transition is expected to boost the nation’s exports of lithium and base metals.
In 2022–23, Australia’s export earnings are forecast to more than triple from $5.3 billion in 2021-22 to almost $19 billion. However, they are then expected to decline to $11.8 billion in 2024-25 in real terms, before picking up later in the decade to resume its $19 billion peak by 2027-28.
Driving this new wave is Australia reinforcing its position as the world’s largest lithium miner with higher prices and continued strong global demand for the resources critical to low-emissions technologies.
Lithium product exports are expected to exceed $18.5 billion in 2022-23, up from $4.9 billion in 2021-22. Lithium and base metals (and their raw material inputs) will account for almost as much export revenue as all coal types by 2027-28, the DISER report says.
Spodumene prices are estimated to rise to an average US$4,350 a tonne in 2023, from an average of US$3,110 a tonne in 2022. Prices should then moderate to US$2,760 in 2024 and $2,440 in 2028. Lithium hydroxide prices are expected to lift from US$44,090 a tonne in 2022 to US$61,520 in 2023, before moderating to US$36,220 by 2028.
Global lithium demand powers on
Global lithium demand continues to grow rapidly, driven by surging demand for electric vehicle (EV) batteries. Demand for lithium batteries accounted for almost 80% of all lithium use in 2022 and is expected to reach 90% by the end of the outlook period, as EVs gain market share in the world passenger car market.
According to DISER’s report, Australia’s lithium production is forecast to grow from 333,000 tonnes of lithium carbonate equivalent (LCE) in 2021-22 to 431,000t in 2022-23. By 2027-28, LCE tonnage will be double 2021-22 levels, at 661,000t.
Meanwhile, DISER says that India’s appetite for resource/energy commodities is likely to show strong growth over the outlook period, as that nation develops. Australia is well-placed to supply India with these products.
“The latest Resources and Energy Quarterly underlines the importance of our critical minerals sector and Australia’s ambition to become a clean-energy superpower”
Minister for Resources and Northern Australia, Madeleine King, says base metals and critical minerals like lithium are crucial components of clean-energy technologies such as batteries, solar panels, and wind turbines, which will help the world lower emissions and meet net-zero commitments.
“The latest Resources and Energy Quarterly underlines the importance of our critical minerals sector and Australia’s ambition to become a clean-energy superpower.”
New copper supply meeting rising demand
Meanwhile, copper prices are forecast to average US$9,000 a tonne in 2022, as new supply meets rising demand. Prices are projected to grow to US$9,200 a tonne (in real terms) in 2028 as demand from the energy transition outweighs future production growth.
Australia’s copper exports are projected to grow from 868,000 tonnes in 2022-23 to around 970,000 tonnes in 2027-28, supported by additional production from new mines and mine expansions. As output grows and prices strengthen, Australia’s copper export earnings are projected to grow — from $13 billion in 2022-23 to $15 billion (in real terms) in 2027-28.
DISER’s report notes worldwide energy transition towards low emissions technologies is expected to positively impact copper consumption over the outlook period. Copper’s conductivity, malleability and durability make it vital to EVs, EV charging infrastructure, batteries, and renewable energy generation.
The report also found iron ore prices have rebounded strongly in 2023, reflecting a recovery in Chinese steel production, with export earnings forecast to be worth about $121 billion in 2022–23 compared with $132 billion in 2021–22.
Minister King adds Australia’s resources and energy exports continue to be strikingly resilient and prove the indispensable role Australia plays as a stable and reliable supplier despite the global turmoil caused by Russia’s invasion of Ukraine.
On 3 April, the minister also outlined the achievements and challenges of the nation’s resources sector in a ministerial statement to parliament, including how Australian resources will help the world lower emissions. She urges the sector to also work to lower its own emissions to help Australia reach net zero by 2050.
“Unlocking the full potential of our critical minerals endowments is a core part of realising our ambition to be a renewable energy superpower”
“In order to decarbonise, the world needs our resources industry and our critical minerals. Australia has vast reserves of critical minerals such as lithium, vanadium, rare earths elements and silicon which are essential to make clean-energy technologies, such as batteries, solar panels and electric vehicles.
Unlocking the full potential of our critical minerals endowments is a core part of realising our ambition to be a renewable energy superpower.”
Minister King says traditional resources such as gas, iron ore, bauxite, and coal will also be crucial to help manufacture the technologies that will ultimately bring down emissions in Australia and around the world.
Write to Adam Orlando at Mining.com.au