Australia’s mining and energy export earnings are projected to decline over the next two years due to increased trade barriers, decreasing bulk commodity prices, and a sluggish global economy, according to a report released by the government. The June-quarter report from the Department of Industry, Science and Resources highlighted the ongoing uncertainties surrounding U.S. policies under President Donald Trump, which have led to significant disruptions in global trade. These uncertainties are causing businesses to hesitate in making investment decisions. As stated in the report, “The increased caution has induced further weakness in activity,” which is expected to negatively affect world commodity demand.
In April, President Trump enacted a 10% tariff on goods from most countries, although he temporarily suspended higher tariffs for many trading partners for 90 days. Recently, he announced that the U.S. had reached an agreement with China, Australia’s largest trading partner, related to trade, but provided no specific details. For the financial year 2024-25 ending in June, Australia is projected to generate commodity earnings of A$385 billion (approximately $252 billion), down from A$415 billion in 2023-24. This figure is expected to decrease further to A$369 billion next year and to A$352 billion in 2026-27.
The report also indicated that prices for iron ore, which is Australia’s leading export, and liquefied natural gas (LNG) are likely to decline due to increased global supply. Iron ore export earnings are anticipated to drop from A$116 billion this year to A$105 billion next year, declining to A$97 billion by 2026-27. However, gold is expected to perform well, projected as Australia’s third-largest export with earnings of A$56 billion next year, driven by rising prices and volumes. Additionally, while lithium prices may recover slowly, revenue forecasts predict an increase from A$4.6 billion this year to over A$5.5 billion next year and more than A$6.6 billion in 2026-27.
Resources Minister Madeleine King noted that the higher prices for gold, along with projected increases in copper and lithium exports, are helping to mitigate the effects of declining prices for iron ore, coal, and LNG.