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More News Longer term optimism for mining industry The message evident in longer term mining industry forecasts is to hang in there with conditions set to improve. The Australian Bureau of Agricultural and Resource Economics (ABARE) predicts in a commodity outlook that production of energy and minerals commodities will increase by 20% in 2013-14 compared with 2008-09 volumes, with rising demand and the prices also increasing. In fact, it has predicted earnings from energy and minerals commodities will grow at an average annual rate of 2.8% to $140 billion (in 2008-09 dollars) in 2013-14 as world economic growth strengthens to 4.3% in 2011, before easing gradually to around 4% a year toward 2014. The shorter term outlook is not quite so optimistic with ABARE saying that mineral resource export earnings will fall by 21.2% next year with the lower dollar not enough to shield the mining sector from falling base metals and commodity prices. It says that production of metals and other minerals will still increase by 0.8% for the current financial year from 2007-08, due to increased production of iron ore and thermal coal. The last vestiges of the resources boom will also carry over into earnings, with ABARE expecting export earnings from energy and minerals to increase by 40% year on year to Aus$162 billion, thanks to bulk commodities and also gold, with metals and other minerals accounting for $85 billion of this. However, the metals and minerals share of this figure will fall by 9% in 2009-10 to $77 billion as base metals prices continue to wallow and iron ore prices also take a tumble. Overall, the value of export earnings from energy and minerals will fall to $128 billion in 2009-10 as prices remain depressed. “While the Australian dollar is expected to remain weak, averaging US$0.70 in 2008-09 and US$0.68 in 2009-10, this will not be nearly enough to shield the Australian mining industry from the impact of falling production and declining prices. “This, together with lower export volumes, is forecast to more than offset the positive effect on earnings of an assumed depreciation of the Australian dollar,†ABARE said in the outlook report. 
Yolanda Torrisi Managing editor The ASIA Miner
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