Iron ore seen driving Australia's resources export earnings to a record in 2020/21

Reuters

Published Jun 27, 2021 10:09AM ET

MELBOURNE (Reuters) - Booming iron ore prices are expected to account for nearly half of Australia's record export earnings from resources this financial year and the country anticipates further gains ahead, according to a government report on Monday.

Earnings from Australian resources exports are estimated to come in at a record A$310 billion ($235.41 billion) in the 2020-2021 financial year ending in June, rising to A$334 billion the following year as industrial activity ramps up following COVID-19 restrictions.

The Department of Industry revised its estimate up by 14% from a March forecast due to strong iron ore prices, which hit an all-time high above $200 a tonne in early May on strong steelmaking demand.

"This is a very strong result in the context of the global COVID-19 pandemic," it said in its June quarterly report.

"Advanced economies and most of Australia’s major trading partners are continuing to recover strongly from the economic impacts of the COVID-19 pandemic."

Australia's mining sector makes up around 10% of the country's' gross domestic product and iron ore is the country's top export.

Australia expects iron ore prices to average $137 this financial year from a March forecast of $128, and $129 next financial year, the government report said.

LNG export earnings are expected to jump 53% to A$49 billion in the year to June 2022 on the back of higher oil prices and a 5% rise in export volumes as problems at the Gorgon LNG and Prelude floating LNG are resolved, according to the report.