Launched by the Chief Economist of the Department of Industry, Innovation and Science for the December 2015 quarter, the report has highlighted the ongoing contribution the resources and mining sectors provide to the Australian economy.
The report was released shortly before the first LNG cargo departed from the Australian Pacific LNG (APLNG) facility, which is expected to mark Australia’s arrival as an LNG global superpower.
Subsequently, Australia’s gas production in 2015-16 is expected to increase by 27 per cent to 83.6 Bcm and Australia’s LNG exports are forecast to increase 45 per cent to 36.2 MMt. At full capacity, the GLNG project, the QCLNG project and the APLNG projects will have a combined capacity of 25.3 MMt/a.
Global LNG demand is forecast to increase by 8 per cent, with Australian exports forecast to increase by a staggering 45 per cent.
However, Federal Minister for Resources, Energy and Northern Australia Josh Frydenberg conceded that short-term challenges face the resources and mining sectors. While Australia’s LNG exports are forecast to grow as new capacity comes online, growth in export values will be tempered by downward pressure on prices.
“In 2015-16, Australia’s export earnings from resources and energy commodities are forecast to decline by 4 per cent to $166 billion as an increase in export volumes, particularly LNG and iron ore, are more than offset by lower prices,”? the report said.
Mr Frydenberg said slower economic growth in emerging economies is likely to limit consumption growth and a significant price recovery for commodities in the short-term.
“The existing short-term challenges reinforce the Government’s focus on implementing initiatives to ensure these vital sectors remain strong going forward.
“These include removing $4.5 billion of red tape from the economy, encouraging new exploration through a $100 million Exploration Development Incentive, and opening new and expanding existing market opportunities.”?