Photo looking along a mining rail tunnel

The December 2023 edition of the Resources and energy quarterly (REQ) and the 2023 Resources and energy major projects (REMP) were released today by the Department of Industry, Science and Resources. 

The outlook for Australian resource and energy commodity exports has improved slightly since the September edition of the REQ. The world economy has not slowed as sharply as feared a few months ago and the Chinese Government has taken further measures to stabilise the nation’s residential property sector, maintaining demand for a range of commodities.

The latest forecast is for weaker growth in world demand and improving world commodity supply to cut Australia’s resource and energy export earnings from a record $466 billion in 2022–23 to $408 billion in 2023–24. A further fall seems likely in 2024–25, as commodity prices soften further and more favourable interest rate differentials drive a strengthening in the Australian dollar. The latest forecast is broadly consistent with previous REQ forecasts.

Highlights from the December REQ are:

  • Improved market sentiment following Chinese Government measures to stabilise its property market, and low Chinese iron ore inventories have pushed iron ore prices above US$120 a tonne, but some retreat from this is expected over the next 2 years.
  • High inventories in China have seen thermal coal prices fall in recent months. The metallurgical coal market remains tight due to supply problems. Prices for both coal types are expected to decline over time.
  • Oil prices are drifting down as weak world demand is being partly offset by OPEC+ supply cuts. The recent conflict in the Middle East has not yet had a significant or lasting impact on oil prices.
  • Lithium prices have fallen further from the peaks of late 2022, due to increased supply and concerns about the near-term demand for electric vehicle production.
  • Uranium prices have surged in recent months, driven by supply issues and a more rapid expansion of nuclear power as nations seek to improve energy security and meet net zero commitments. 

Australia’s resource and energy export values/volumes

Chart showing Australia's exports from 2007-08 to 2023-24. Export volumes appear broadly steady since 2019-20, while value is declining after a peak in 2022-23

Highlights from the 2023 REMP are:

  • There were 421 projects in Australia’s resources and energy major projects list as at 31 October 2023, up from 393 projects a year earlier. 
  • The value of committed projects fell slightly to $77 billion as some projects were completed. Oil and gas projects continue to make up the largest share of committed projects.
  • The value of project completions rose for the third consecutive year, with 29 projects valued at $21 billion achieving commercial production over the year to October 2023.
  • There has been a strong advancement of critical minerals projects over the past year, including 11 projects (valued at $5 billion) reaching FID, 8 projects (valued at $4.1 billion) achieving commercial production and 6 projects (valued at $1.8 billion) publishing advanced feasibility studies.
  • Proponents expect at least 21,000 construction and 10,000 ongoing jobs from committed projects (around half of committed projects have estimates available).

To improve the quality of the data in the REMP, changes have been made to how projects are classified at different stages of development and how capital expenditure is reported for early-stage projects. These changes largely reflect the recent change in composition of projects in recent years, in particular the growth of emerging new energy and resource commodities. The nascent character of these commodities means available benchmark data on project costs and other variables is limited or of variable quality. Further details on the changes in methodology are set out in the report.

Value of Australia’s committed and completed major resource and energy projects

Graph showing value of projects from 2015 to 2023. Committed projects value was highest from 2015 to 2017 before dropping. Completed projects were highest from 2015 to 2018 before dropping