Title: Australia’s Commodity Exports Facing Steep Decline by 2025, Iron Ore and LNG Industries Hit Hardest
Australia is set to experience a significant downturn in its commodity exports, with projections indicating a staggering 25 percent plunge over the next two years, according to the latest report published by the federal Department of Industry, Science and Resources. The September 2023 edition of the resources and energy quarterly (REQ) report highlights the challenging road ahead for Australia’s export sector.
The report predicts that the total annual value of Australia’s resources and energy exports will plummet by 24.6 percent, dropping from a record-high of 467 billion Australian dollars (296.9 billion U.S. dollars) in the financial year 2022-23 to 352 billion Australian dollars in 2024-25. This decline will have a profound impact on two of Australia’s lucrative sectors – iron ore and liquefied natural gas (LNG).
Iron ore, Australia’s most valuable commodity, is projected to witness a decline from 124 billion to 99 billion Australian dollars during the said period, while earnings from LNG exports are expected to plummet by 32.2 percent, declining from 93 billion to 63 billion Australian dollars.
Resources Minister Madeleine King responded to the report, stating that these projections reflect a return to normalcy in commodity prices amidst concerns over sluggish global economic growth. However, she emphasized that although overall export revenue is easing from record highs, Australia’s resources and energy exports remain robust, playing a vital role in sustaining the nation’s economic well-being.
The REQ report also sheds light on the global battery value chain, where Australia emerges as a leading exporter of minerals essential for rechargeable batteries, such as lithium, nickel, cobalt, and copper. The growing demand for these minerals is driven by the surging sales of electric vehicles and the global push for decarbonization. Minister King expressed optimism, stating, Demand for Australian minerals is growing as the world works to build the technology needed to decarbonize.
As Australia navigates the challenges posed by the declining commodity exports, it becomes crucial to foster resilience and explore alternative avenues for economic growth. The country’s abundant mineral resources provide an opportunity to embrace the shift towards renewable energy and emerging technologies. Nonetheless, stakeholders across industries must adapt to the changing landscape and seek new possibilities to mitigate the potential impact of this downward trend.
Australia’s position as a major global player in the natural resources sector gives it the advantage of diversifying its export portfolio. While the decline in commodity prices calls for caution, experts believe that tapping into emerging markets, technological advancements, and sustainable practices can help the nation strengthen its position and navigate this challenging period successfully.
In conclusion, Australia’s commodity exports are projected to experience a sharp decline of 25 percent by 2025, with iron ore and LNG industries being hit hardest. Despite this setback, Australia’s resources and energy exports continue to underpin the nation’s economic well-being. Furthermore, the country’s leadership in mineral exports for rechargeable batteries presents opportunities for growth in the global battery value chain. By embracing technological advancements and sustainable practices, Australia can navigate these challenges and build a prosperous future.
