Main content area

Iron ore

Australia has a mature, efficient and low-cost iron ore industry. This makes it a supplier of choice for the world’s steel makers. Export earnings are forecast to hit a record of A$136 billion in 2020-21, accounting for 22% of Australia’s total goods and services exports.

The iron ore industry was Australia’s largest export earner in 2020, valued at A$115 billion. The industry accounts for over 46,000 direct jobs, the majority being in regional areas of Western Australia.

Australia is the world's largest iron ore producer, with 36% of global production. Australia’s iron ore resources account for about 30 per cent of global deposits, with a considerable potential supply-life.10 

Iron ore resources occur in all the Australian States and Territories, but the vast majority (92%) of Australia's iron ore production occurs in Western Australia with almost 80% in the Pilbara.11, 12

Transport of iron ore to overseas destinations has become highly efficient and cost effective due to the massive scale. A typical heavy-haul train is over 2.5 kilometres long, or 264 ore cars and delivers ore to three main export ports along the Pilbara coast.

Australian iron ore continues to be in strong demand from China in 2020-21. We have also seen a recovery in American, Japanese, South Korean and European demand.

This, coupled with the impact of ongoing supply problems in Brazil, makes Australia well-placed to continue to be the world’s pre-eminent supplier.

Export earnings are forecast to exceed A$100 billon every year for five years.

Oil and gas

Australia’s LNG sector started in 1989 when the North West Shelf LNG export project came online.

Since then, Australia has become the world’s largest LNG exporter. We accounted for 22% of global LNG trade in 2020 worth A$36.2 billion, making it Australia’s second largest energy export commodity.

The oil and gas industry directly supports about 22,000 jobs.

Gas continues to be important as a feedstock to industry, for electricity generation, and for residential use within Australia and in our LNG export markets.

The government’s Gas-Fired Recovery Plan is focused on:

  • increasing gas supply
  • improving the capacity of gas transportation networks
  • empowering consumers, and
  • easing pressure on east coast gas supply and price.

The government is developing Strategic Basin Plans to unlock and develop key gas basins. The first of these, for the Beetaloo Sub-basin in the Northern Territory, was released on 14 January 2021.

Beetaloo has the potential to be a world-class gas province and the plan commits $224 million of new funding for exploration incentives and road upgrades to pave the way for industry investment.

The second plan being developed is for the North Bowen and Galilee Basins in Queensland.

Map of new gas basin in the north east of the Northern Territory. Decorative.

The Beetaloo Basin, Northern Territory.

The LNG sector on the East Coast of Australia uses onshore coal seam gas reserves for exports. Around two-thirds of gas produced on the East Coast is exported as LNG to customers in Asia.

Queensland’s coal seam gas reserves along with further exploration and development of new gas basins will be increasingly important in maintaining exports and gas for the east coast domestic market.

The proximity of Australia’s West Coast offshore resources to the Asian market underpins our position as a major reliable LNG exporter to the Asia-Pacific region.

Over 70% of Australia’s LNG is produced from gas resources off the coast of Western Australia and the Northern Territory.

The Carnarvon, Browse and Bonaparte basins all contain significant (multi-trillion cubic feet) undeveloped offshore gas resources. These can be developed competitively to meet global gas demand and new market opportunities.

Global gas and LNG demand is expected to increase by 30% by 2040. Demand in the Asia Pacific region is expected to increase by 82% over the same timeframe.13 

Australia is well-placed to meet this growth. Demand in the next five years is expected to be driven by China, India, Bangladesh and other emerging Asian economies with expanding manufacturing and industrial sectors.

LNG will play an important role as a stable and flexible transitional fuel, alongside renewables, as the world seeks to decarbonise and global economies strive for net-zero emissions goals by the middle of the century.

LNG, in combination with Carbon Capture and Storage (CCS), will be a critical enabler of emerging low‑emissions energy technologies such as hydrogen and ammonia.

This technology will increase the value of gas as a transition fuel, and is key to Australia’s role as a technology leader in emissions reductions.

Coal

The coal industry remains a major contributor to the country’s prosperity and economic wellbeing.

The industry was one of Australia’s largest export earners in 2020, valued at nearly $44 billion. It also pays more than $5 billion annually in royalties and accounts for over 48,000 direct jobs.

Coal will continue to play an important role in the world’s energy mix for years to come.

The International Energy Agency projects coal demand in developing economies, particularly in Asia, to remain strong in the short-medium term to 2030.14 This is to meet demand for electricity and increasing industrial output. Growth is highest in India, accounting for over 14% of global demand for coal by 2030.15

Nine major terminals along the East Coast of Australia service the coal export industry. Port Waratah in Newcastle (New South Wales) is the largest coal export port in the world and Hay Point (Queensland) is one of the largest coal-loading facilities in the world.

Queensland has major coal deposits in the Surat, Bowen, Galilee and Clarence-Moreton basins. New South Wales contains a number of large high-quality resources for coal, including major deposits in the Hunter Valley, Gunnedah, Illawarra and Lithgow regions. Major deposits of brown coal are in Gippsland in eastern Victoria

Opportunities also exist to invest in research, development and commercialisation of alternative uses for high-emissions resources, including coal.

The government is committed to a technology-led approach to lowering emissions through projects such as the Hydrogen Energy Supply Chain (HESC) pilot project. This world-first project recently commenced its Australian operations and aims to safely produce and transport low emissions hydrogen from Australia to Japan.

When combined with CCS, the coal to hydrogen project has the potential to create a high value, low emissions use for Australia’s abundant brown coal reserves. This project is discussed in detail in the Ready for the Future section later in this Statement.

Footnotes

  • Geoscience Australia (2018), Australian Resource Reviews – Iron Ore. Australian Government, Canberra. 
  • Geoscience Australia (2016), Australian Mineral Facts. Australian Government, Canberra. 
  • World Energy Outlook 2020 – Analysis - IEA, Stated Policies Scenario.
  • International Energy Agency. Coal 2020 Report.
  • International Energy Agency. World Energy Outlook 2020.
  • Geoscience Australia (2020), Commodity Summaries, Australian Government, Canberra.