Australian coal is set to become the second commodity ever to crack $100 billion in annual exports, according to the latest Resources and Energy Quarterly report from the federal government.
- A new federal government report forecasts the country’s coal exports to crack $100 billion this financial year
- It is set to be the second commodity ever to reach that annual export figure, behind iron ore
- The surge comes from price increases following Russia’s invasion of Ukraine, as well as local weather events and demand from China
The report stated that combined coal exports were expected to reach $110 billion this financial year, after prices for metallurgical coal hit “historic highs” in the new year, following the Russian invasion of Ukraine.
The thermal coal price has also been spiking due to Chinese demand and weather disruptions.
Australia is the world’s biggest exporter of metallurgical coal, and the second biggest for thermal coal, and if the forecast is correct, it would be only the second commodity to crack the $100 billion annual export figure, behind iron ore.
CQUniversity regional development professor John Rolfe said the prices, which had more than doubled, were unprecedented.
“It’s very unusual to see such sharp rises, commodity prices have been more volatile in recent years driven my world demand and fluctuations in supply,” Professor Rolfe said.
Professor Rolfe also said the government forecast was usually on the conservative side, and he expected the export figure would likely end up even higher.
Aligning with net-zero targets
The report shows Australia’s metallurgical coal exports are forecast to rise from 171 million tonnes in the 2020-21 financial year, to 184 million tonnes by 2026–27.
“The global drive towards low carbon energy sources and a sharp decline in the coal plant construction pipeline has changed incentives for investors and miners, deterring long term investment in coal despite the recent surge in prices” it said.
When asked how the export milestone and set increase aligns with net-zero targets, which he had repeatedly vocally opposed, Nationals Senator Matt Canavan insisted there was “nothing inconsistent” with reducing local emissions, while still exporting energy “to the rest of the world”.
“We’ve always said that as long as there’s a market for it, we’ll continue to grow and develop our coal and gas industries,” Mr Canavan said.
The LNP were quick to champion the forecast export milestones on Monday, and criticise the Labor government’s supposed plans for the industry, if it were to be elected in the upcoming federal election.
But Madeleine King, Shadow minister for resources, reiterated on Monday that Labor “unequivocally” supported the mining sector.
“There will never be an alliance between labour and the greens, that’s not going to happen, not now or ever” Ms King said.
She emphasised that coal and gas would still be essential in “powering the nation”, during the transition to renewables.
“There will be jobs in the current resources and traditional resources industry committees to come, but there will [also] be more jobs in new industries.”
Professor Rolfe said the surge would benefit Queensland greatly, as the state accounted for just under 60 per cent of Australia’s coal and a portion of its LNG, which had also seen a surge in export prices.
“So that means that with the LNG, and the coal, Queensland must be accounting for around about close to $90 to $100 billion in energy export earnings.
“So that money will be flowing through to the local economy to the business spend, and through to the state government, in export earnings, and through to the Commonwealth, in terms of company taxes.”
Prices for both thermal and metallurgical coal are expected to ease significantly by the 2026-2027 financial year.