Mr John Barber
Program Manager, Resources
Bureau of Resources and Energy Economics (BREE)
Outlook for Australian Resources and
Energy Commodities
Australian National Conference on Resources and Energy
John Barber
Senior Economist
Bureau of Resources and Energy Economics
bree.gov.au
Overview
I.
II.
Phases of the mining boom
Outlook for Australia’s key exports
bree.gov.au
1. Phases of the mining boom
i.
High price phase
ii.
Investment phase
iii. Output phase
bree.gov.au
China Gross Domestic Product
20,000
20
16,000
16
12,000
12
8,000
8
4,000
4
CNY
billion
0
0
2000
2002
2004
GDP (constant prices)
2006
2008
2010
%
2012
GDP growth rate (RHS)
bree.gov.au
High Price Phase
Commodity Price Indexes
1000
900
800
700
600
500
400
300
200
100
index
2000=100
2000
iron ore
2002
2004
metallurgical coal
2006
2008
thermal coal
2010
gold
2012
copper
bree.gov.au
Stock of Committed Investment & Flow of Capital
Expenditure
120
100
High Price Phase
- Part 1
High Price Phase
– Part 2
Investment
Phase
300
250
80
200
60
150
40
100
20
Expenditure
$b
0
50
0
Committed Investment (stock)
Source: ABS, BREE
Investment
$b
Capital Expenditure (flow)
bree.gov.au
Cumulative Committed Investment
500
High Price Phase
- Part 1
High Price Phase
– Part 2
Investment
Phase
APLNG 2
Ichthys LNG
APLNG 1
Gladstone LNG
Jimblebar
Prelude LNG
Wheatstone LNG
400
300
QCLNG
Gorgon LNG
200
Sino Iron
NWS Rankin B
Pluto LNG
100
$b
0
2003
2004
2005
2006
2007
Less than $1b
2008
Large
2009
2010
2011
2012
Mega
bree.gov.au
Is the ‘mining boom’ over?
bree.gov.au
Australia – Monthly Iron Ore Exports
60
50
40
30
20
10
Mt
0
Source: ABS
bree.gov.au
Australia – Monthly Thermal Coal Exports
20
16
12
8
4
Mt
0
Source: ABS
bree.gov.au
Australia – Monthly Metallurgical Coal Exports
16
14
12
10
8
6
4
Mt
2
0
Source: ABS
bree.gov.au
Source: ABS
coal
oil and gas extraction
metal ores
2012–13
2011–12
2010–11
2009–10
2008–09
2007–08
2006–07
2005–06
2004–05
2003–04
2002–03
2001–02
2000–01
1999–00
1998–99
1997–98
1996–97
1995–96
1994–95
1993–94
1992–93
Employment
300
250
200
150
100
50
0
other mining (including services)
bree.gov.au
Iron Ore
Aluminium
Copper
Sep-13
Jul-13
May-13
Mar-13
Jan-13
Nov-12
Sep-12
Jul-12
May-12
Mar-12
Jan-12
Nov-11
Sep-11
Jul-11
May-11
Mar-11
Jan-11
Metals Prices
120
100
80
60
40
Index
Jan 11=100
20
0
Nickel
bree.gov.au
World thermal coal prices
160
150
140
130
120
110
100
90
80
USD/t
Apr-10
Oct-10
Newcastle 6000kcal
Source: Bloomberg
Apr-11
Oct-11
Richards Bay 6000kcal
Apr-12
Oct-12
Baltic 6000kcal
Apr-13
QHD 5800kcal
bree.gov.au
Australia’s Exports
350
300
250
200
150
100
50
A$b
0
Other Exports
Source: ABS
Resources & Energy Exports
bree.gov.au
China’s GDP Growth
12
10
8
6
4
2
0
-2
Final consumption
Source: CEIC
Gross capital formation
Net exports
bree.gov.au
China Refined Metals Demand
160
140
120
100
80
Steel
Source: CEIC, WBMS
Copper
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
Oct-11
Jul-11
Apr-11
Jan-11
60
Aluminium
bree.gov.au
Number and Value of Projects Under
Construction in Australia
120
300
100
250
80
200
60
150
40
100
20
number
of
projects
50
$b
Apr-2004 Apr-2005 Apr-2006 Apr-2007 Apr-2008 Apr-2009 Apr-2010 Apr-2011 Apr-2012 Apr-2013
number (left axis)
value (right axis)
bree.gov.au
Key Project Delays and Cancellations
Project
Browse LNG
Outer Harbour
Olympic Dam Expansion
Sunrise LNG
Abbot Point T4-9
West Pilbara Iron Ore
Wandoan coal mine
Kooragang Island Coal Terminal 4
Anketell Point Port
Cape Lambert Magnetite project
Southdown Magnetite Project
Yarwun Coal Terminal
Mount Pleasant coal mine
Weld Range iron ore project
Balaclava Island coal terminal
Fisherman's Landing LNG
Surat Basin Rail
Wilkie Creek coal mine
Total
Company
Woodside
BHP Billiton
BHP Billiton
Woodside
NQBP and partners
Aquila Resources
Xstrata
PWCS
Fortescue / Aquila
MCC Mining
Grange Resources
Metro Coal
Rio Tinto
Sinosteel Midwest
Xstrata
LNG Limited
Aurizon / Xstrata
Peabody Energy
Estimated
Value
$b
36
30
20
12
11
7.4
6.0
5.0
4.0
3.7
2.9
2.2
2.0
2.0
1.5
1.1
1.0
1.0
149
bree.gov.au
Thermal Coal - Capital Spend to Build a
Tonne of New Capacity
200
176
188%
160
120
80
45%
73
106
61
40
US$
per tonne
0
2007
2012
ROW
Source: Minerals Council of Australia, 2012, ‘Opportunity at Risk’
Australia
bree.gov.au
Iron Ore - Capital Spend to Build a Tonne of
New Capacity
240
195
200
150
160
120
95%
56%
100
96
80
US$ 40
per tonne
0
2007
2012
ROW
Source: Minerals Council of Australia, 2012, ‘Opportunity at Risk’
Australia
bree.gov.au
LNG Project Cost Increases
60
301%
50
40
250%
39%
30
121%
20
130%
154%
10
A$b
Pluto
Gorgon
QCLNG
publicly announced stage
Ichthys
Gladstone
Wheatstone
committed / completed stage
bree.gov.au
Projected Investment in Australian
Resources and Energy Projects
350
300
250
200
150
100
50
A$b
0
2012
2013
2014
Current
2015
Likely
2016
2017
2018
Possible
bree.gov.au
2. Outlook for Australia’s Exports
bree.gov.au
Australia’s Iron Ore Exports
bree.gov.au
Australia’s Metallurgical Coal Exports
bree.gov.au
Thermal coal exports
bree.gov.au
LNG Exports
100
75
80
60
60
45
40
30
20
15
2013-14
A$b
Mt
0
0
volume
value (right axis)
bree.gov.au
Total Australian Mineral and Energy Commodity
Export Values
300
250
200
150
100
50
Other metals
Coal
Iron ore
2017-18
2016-17
2015-16
2014-15
2013–14
2012–13
2011–12
2010–11
2009–10
2008–09
2013-14
A$b
0
Oil and Gas
bree.gov.au
Contact and Follow Up
John Barber
Senior Economist - Resources
Bureau of Resources and Energy Economics
02 6243 7988
john.barber@bree.gov.au
bree.gov.au