Australia’s resource and energy export earnings appear likely to hit a new record of $282 billion in 2019–20, despite volatile commodity markets.

The latest edition of the Resources and Energy Quarterly report forecasts an increase on the previous record of $279 billion set in 2018–19, and only a small downward revision on the June forecast.

Released by the Department of Industry, Innovation and Science, the report contains the Office of the Chief Economist’s forecasts for the value, volume and price of Australia’s major resources and energy commodity exports.

The strong figures are primarily the result of higher export volumes and a lower than expected Australian dollar, with the country also benefiting from being the world’s second largest gold producer at a time of trade tensions and lower economic confidence.

Earnings from gold — seen by many as a reliable store of value in times of global economic uncertainty — are set to surge by one third to $25 billion in 2019–20.

Australia’s other major resource and energy commodities continue to drive high earnings. Iron ore prices have come off recent highs but earnings are still set to increase to $81 billion in 2019–20. LNG export earnings are also forecast to lift to $52 billion this financial year, driven by growing export volumes. Metallurgical and thermal coal are also expected to remain high, while aluminium should benefit from Chinese stimulus measures.

Acting Chief Economist at Department of Industry, Innovation and Science – Australia, David Turvey, said earnings are likely to increase further this financial year despite recent weakness in some commodity markets.

“While US-China trade tensions have resulted in a weaker outlook for base metals and energy commodities, Australia is benefitting from a sharp increase in gold prices, particularly when converted into Australian dollar terms,” he said. Our gold earnings are set to surge by one third to $25 billion in 2019–20, as the gold price benefits from a flight to safe haven assets. High iron ore prices in the wake of the Brumadinho mine tailings dam collapse are also expected to drive resource and energy export earnings up in 2019–20.

However, Mr Turvey highlighted that risks to the outlook for resource and energy markets remain elevated.

“The outlook for global growth has deteriorated modestly, and any slowing in economic growth in China would ripple through commodity supply chains.” he said.

“Despite this, mining investment appears to have turned the corner in Australia. For the first time in six years, mining companies are planning to increase their annual spend on building new mines and wells, and on expanding and replacing their fleet of plant, machinery and equipment.

Meanwhile nickel is set to jump in the rankings of significant export earners, as a direct result of technological investment in electric vehicles and energy storage. Australia’s total nickel export earnings are forecast to increase from $3.6 billion in 2018–19 to $5.6 billion in 2020–21.

This edition of the Resources and Energy Quarterly includes a special topic on mining productivity, with research suggesting that productivity in major parts of the Australian mining sector may be stronger than traditional measures suggest. In globally uncertain times, the factors under our control — such as productivity — become increasingly important, the report says.

Click here to view the report.