PERTH (miningweekly.com) − Australia’s minerals and energy commodity export earnings were expected to increase by 33% to A$186-billion in 2010/11, driven by higher export prices and volumes for most commodities. The growth could be followed by a 15,6% increase to A$214-billion in 2011/12, the Australian Bureau of Agricultural and Resource Economics and Sciences (Abares) stated on Tuesday. Export earnings from energy commodities were expected to grow by 28% to A$73-billion in 2010/11, as higher prices offset lower volumes of metallurgical coal, while earnings from other metals and minerals could were seen rising by 38% to A$112-billion. Over the medium term, Abares is forecasting energy and mineral export earnings of A$219-billion by 2015/16. It said that higher export volumes were expected to offset the combined effect of a projected decline in process and an assumed weaker Australian dollar. The value of commodity exports is forecast be around A$254,8-billion by 2015/16, which would be a 15% increase on the value of commodity exports forecast for 2010/11. “Prices for energy and mineral commodities are forecast to remain high in the short term, supported by strong economic growth, a weak US dollar and supply disruptions,” Abares said. It said that the continued weakness of the US dollar against other major international floating currencies had encouraged investors to purchase commodities such as gold, oil and copper as a hedge against the US dollar, resulting in considerable support for prices. Over the medium-term, supply expansions for most mineral and energy commodities were expected to place downward pressure on prices. However, ABARES noted that prices for most commodities were projected to remain high in historical terms, in line with rising production costs. Despite the generally positive outlook for commodity prices, there were a number of risks to the projections. A key risk was the strength of the assumed recovery in economic activity. Another issue was the rate at which new capacity was commissioned. “The projected easing in commodity prices relies on the timely development of new capacity. Significant delays to planned developments present an upside risk to the price projections,” Abares noted. Assumed growth in world economic activity and industrial production was expected to provide a solid platform for growth in the consumption of energy and mineral commodities over the outlook period. China would continue to be the major contributor to increased demand because of the scale of its economic growth and the energy and minerals intensive nature of its urbanisation and industrialisation. Other developing economies would also contribute to demand growth over the medium-term. Abares said that while consumption in these economies was expected to grow considerably, it was from a much lower base, and absolute increases in consumption would be smaller than in China. Forecast higher prices and rising global demand in 2010/11 were expected to increase the profitability of producers and contribute to higher Australian production. The volume of Australian mine production is forecast to rise by 7% in 2010/11, stemming primarily from growth in energy commodities. The production of metals and other minerals could increase by 10% in 2010/11, reflecting higher iron-ore production. In 2011/12, production of metals and other minerals is expected to increase by 6% driven by higher output in a number of commodities, including iron-ore, gold and copper. Production of energy commodities is forecast to increase by 4% in 2010/11, with increased production of thermal coal despite disruptions caused by the Queensland floods. This would be followed by an 11% increase in 2011/12, which is supported by a forecast increase in metallurgical and thermal coal production. Over the medium-term, Australian energy and minerals production is projected to increase by around 29%, as new mine capacity is commissioned and infrastructure expansions, including the Abbot Point port in Queensland and the Pilbara in Western Australia, are completed.

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