A new report shows Australia is expected to further increase its exports and production of several commodities in 2012, ensuring its mining sector’s place as the largest economic driver and encouraging confidence in mining companies to pursue more growth.
According to Australian Mining, although the country’s mining earnings were slightly affected by recent downgrades to global commodities prices, the figures still indicate the country is on pace to break records in production and exports.
The new report, issued by the Bureau of Resources and Energy Economics (BREE), shows the heightened mining activity seen in 2011 will roll over into 2012, with an expected total earnings increase of 15 percent to an unprecedented 202.4 billion Australian dollars ($206 billion). The higher mining takings will be driven mostly by increases in iron ore and coal production as well as soaring gold prices.
BREE executive director Quentin Grafton said that although the global economy is still shaky, Australia’s mining sector will continue to thrive.
“Despite the uncertainty surrounding the outlook for some European economies, Australia’s export volumes for most commodities have remained strong in the second half of 2011, while prices for many commodities have remained at historically high levels,” he said.
According to Steel Guru, the new projections will likely fuel government confidence that mining tax revenues on iron ore and coal will surpass previously estimated levels, making a targeted budget surplus in 2012 a more realistic goal.
However, the news source warned, the forecasts are still subject to commodity prices trends such as fluctuations in gold and base metal prices, which as of late, have shown to be affected by the ongoing European debt crisis and an apparently slowing Chinese economy.
Growth in export earnings is expected to be led by iron ore, which is estimated to increase by 11 percent to A$60 billion, and thermal coal, which will jump 34 percent to A$19 billion as the world shows no moves to turn away from fossil fuels.
Metallurgical coal was also up 13 percent to A$19 billion, while gold likely will become the largest winner, with export earnings expected to jump 11 percent to nearly A$60 billion.
Thermal coal is expected to have the highest volume of production, with an increase of 14 percent to 163 million metric tons, followed by iron ore production, which is expected to be up 13 percent to 460 million metric tons. The report forecasts copper production to grow by 10 percent to 935,000 metric tons, while metallurgical coal production will see a 7 percent increase to 150 million metric tons.
”The increase in iron ore and thermal coal export volumes reflects recent expansions to mine and infrastructure capacity, while metallurgical coal exports are forecast to be higher as production conditions improve in Queensland,” the bureau stated.
A recent change to Australia’s ties with India will also allow the country to begin exporting uranium to India following the removal of a uranium export ban, Mineweb reports.
According to the news source, Australian defense minister Stephen Smith recently traveled to India, where he reportedly had several discussions with Indian defense services and ranking officials. Smith has long been a proponent of removing the uranium export ban, and was recently quoted as saying that India held a “unique” case for uranium sales, and that the country could become “one of the world’s three great power,” opening a massive market for uranium exports.
Australia’s promising mining outlook suggests the country is well positioned to weather the economic storm and hold strong into 2012.
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