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WA Business

Higher iron ore prices tipped to lift Australia’s mining and export earnings

Sean Smith, PerthNow

January 9, 2017 10:04am

AN $8 billion boost from higher iron ore prices is tipped to lift Australia’s mining and energy export earnings to a record $204 billion this year before a pull-back in 2018, according to revised Federal forecasts.

The Department of Industry, Innovation and Science’s latest resources and energy quarterly is tipping a 30 per cent increase in export earnings from mining and oil and gas in the year to June 30, on the back of the unexpected kick in prices for iron ore and metallurgical coal, and the expansion of the LNG industry.

Having previously forecast an average 2017 price of $US45/a tonne for iron ore — the country’s biggest export earner — the department is now tipping $US58/t for the 2016-17 financial year, falling to $US53/t for calendar 2017 and $US49/t in 2018.

That compares with the WA Government’s more optimistic mid-year revised 2016-17 estimate of $US64.30/t.

The department’s 2016-17 forecast translates into expected export earnings of $62.2 billion, up from an expected $54 billion.

Boosted by a resurgence in Chinese steel production, iron ore more than doubled last year to a high of $US83/t a tonne in mid-December. It is currently trading at just over $US76/t.

The higher prices provide much needed relief for WA’s finances, with every $US1 rise generating $73 million in additional royalties for the State.
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