| Main features |
| Overview |
 The index of export prices of energy and mineral resources increased by 15 per cent in the December quarter of 2008. This growth was underpinned by a 24 per cent depreciation of the Australian dollar, which more than offset the decline of most US dollar denominated commodity prices. In the December quarter, Australia’s mineral resource export earnings increased by 10 per cent to $47.3 billion. Export volumes were higher for many commodities including nickel, liquefied natural gas (LNG), thermal coal, diamonds and alumina. Australian production of mineral commodities was higher in the December quarter with around two-thirds of commodities covered recording increased production. |
| Prices |
| In the December quarter 2008, the index of export prices of Australia’s energy and mineral resources (export unit returns) increased by 15 per cent compared with the September quarter 2008. Export unit returns for energy minerals increased by 21 per cent, mainly reflecting the positive effect on export unit returns from the depreciation of the Australian dollar, which resulted in substantial increases for metallurgical coal (34 per cent) and thermal coal (41 per cent). The index for metals and other minerals prices increased by nearly 11 per cent, supported by an 18 per cent increase in export unit value for iron ore. Compared with the December quarter 2007, the index of export prices for energy and mineral resources was 81 per cent higher, as prices for energy minerals increased by 136 per cent and prices for metals and other minerals increased by 39 per cent. An important driver of increased export unit returns was significant increases in bulk commodity contract prices. |
| Exports |
| Earnings from energy and mineral resource exports increased by 10 per cent to $47.3 billion in the December quarter 2008 compared with the September quarter. This growth primarily reflects higher export volumes for some commodities and the depreciation of the Australian dollar against the US dollar. Commodities which recorded significant increases in export earnings include: uranium oxide, up $98 million (66 per cent) to $246 million; nickel, up $174 million (63 per cent) to $452 million; liquefied natural gas (LNG), up $1.3 billion (61 per cent) to $3.4 billion; thermal coal, up $2.0 billion (52 per cent) to $5.7 billion; diamonds, up $53 million (46 per cent) to $163 million; and alumina, up $458 million (29 per cent) to $2 billion. Commodities which recorded significant declines in export earnings in the September quarter include: manganese ore and concentrate, down $474 million (66 per cent) to $243 million; bauxite, down $16 million (21 per cent) to $58 million; zinc, down $123 million (20 per cent) to $504 million; petroleum refinery products, down $17 million (9 per cent) to $184 million; copper, down $116 million (6 per cent) to $1.7 billion; and iron ore and pellets, down $440 million (5 per cent) to $9.1 billion. Lower export values for manganese, bauxite and iron ore were affected by lower export volumes, which more than offset export unit value increases. Zinc, refined petroleum and copper export values declined during the quarter because of a significant fall in world prices. |
| Production |
| Production was higher in the December quarter compared with the September quarter, with around 67 per cent of commodities recording production increases. Increased production was observed for mined tin (362 per cent); refined nickel class 1 (77 per cent); mined silver (21 per cent); diamonds (12 per cent); crude oil and condensate (8 per cent); and mined zinc (6 per cent). Mined tin production was higher in the quarter, reflecting the ramp up of capacity at Metals X’s Renison operation, having started production in the September quarter. Refined nickel production in the December quarter increased, as the industry recovered from a number of supply disruptions during the September quarter. Mined silver production increased, largely because of higher production at the Cannington and Golden Grove mines. Diamond production increased in the December quarter, primarily owing to increased production at Rio Tinto’s Argyle mine, because of improved access to higher grade areas of the pit. A ramp up in production at the North West Shelf Joint Venture’s Angel oil and gas field and Woodside’s Vincent project, as well as increased production at their Laminaria-Corallina operation contributed to an increase in crude oil and condensate production for the December quarter. Production of mined zinc increased in the quarter, largely because of higher production at OZ Minerals’ Golden Grove operation. This was because of significantly higher zinc grades. Significant production declines occurred for manganese (28 per cent); iron ore and concentrate (14 per cent); mined nickel (8 per cent); and mined copper (4 per cent). Manganese and iron ore production declined in the December quarter, as production was reduced in response to weak demand from steel mills. December quarter nickel mine production declined because of lower production from BHP Billiton’s Nickel West operations, and the closure of Norilsk’s Waterloo and Cawse mines and Australian Mines’ Blair nickel mine. Mine closures and production cuts for some companies, including BHP Billiton, OZ Minerals and Aditya Birla resulted in a decline in mined copper production in the December quarter 2008. |
| Commodity highlights |
| Energy |
| Oil and gas |
| In the December quarter, Australia’s production of crude oil and condensate was 7.4 gigalitres, an 8 per cent increase compared with the September quarter 2008. The increased production reflects the ramp up of production at the North West Shelf Joint Venture’s Angel oil and gas field and Woodside’s Vincent project. In addition, Woodside continued to increase production at its Laminaria Corralina operation following improved field performance. In line with higher production, export volumes of crude oil and other refinery feedstock increased by 18 per cent to 4.8 gigalitres. Export earnings in the quarter decreased by 26 per cent to $2.4 billion, as a decline in oil prices more than offset higher export volumes. Natural Gas production increased in the December quarter by 4 per cent to 10.1 billion cubic metres, reflecting the start up of the Angel oil and gas field. The gas from the Angel field will support expanded liquefied natural gas (LNG) production and export capacity at the North West Shelf project where a fifth train was recently commissioned. LNG production from the fifth train contributed to a 30 per cent increase in LNG exports during the December quarter. Export earnings from LNG increased by 61 per cent to $3.4 billion from the September quarter 2008, underpinned by the increase in export volumes. |
| Coal |
| Production of saleable and raw black coal increased in the quarter. The transfer of semi-soft coal from the metallurgical into the thermal coal market resulted in increased coal production being reflected primarily in increased export volumes of thermal coal, up 8 per cent to 34.9 million tonnes. Metallurgical coal exports declined by 12 per cent to 32.1 million tonnes, as producers responded to falling demand from steel mills. In the September quarter, export unit values for metallurgical and thermal coal rose by 34 per cent and 41 per cent, respectively, reflecting the full effect of higher contract prices and a depreciation of the Australian dollar. Higher export prices combined with increased export volumes resulted in black coal export earnings increasing by 28 per cent to $18 billion in the December quarter. |
| Uranium |
| Australia’s uranium production (U3O8) increased by 1 per cent to reach 2659 tonnes in the December quarter, with higher production at Energy Resources Australia’s Ranger mine offsetting lower production at BHP Billiton’s Olympic dam operation. Uranium export earnings in the quarter increased by 66 per cent to $246 billion, underpinned by higher export prices, reflecting a higher average spot price in the quarter and the depreciation of the Australian dollar. |
| Metals and other minerals |
| Iron ore |
| Iron ore production was 14 per cent lower in the December quarter compared with the September quarter 2008. This was largely because of a temporary shutdown of some of Rio Tinto’s operations in response to weaker demand. Rio Tinto’s iron ore production fell by 25 per cent, reflecting production cuts at all Western Australian mines with the exception of Hope Downs, which is still in its ramp up phase. The lower production was reflected in a 19 per cent fall in export volumes to 70 million tonnes. During the quarter, the depreciation of the Australian dollar positively affected iron ore export unit returns, because exports are priced in US dollars. As a result, export earnings in the December quarter fell by only 4.6 per cent compared with the September quarter 2008. Falls in export volumes were partially offset by the benefit from a depreciation of the Australian dollar. |
| Gold |
| Gold mine production remained steady at around 55 tonnes in the December quarter, while refined production fell by 3 per cent to 89 tonnes. Lower volumes of foreign scrap imported to Australia for refining was the main contributor to lower export volumes in the quarter, which declined by 16 per cent to 106 tonnes in the quarter. A lower gold price in US dollar terms was more than offset by the depreciation of the Australian dollar, resulting in a 21 per cent increase in export unit values. Export earnings increased by 2 per cent to $3.9 billion in the December quarter 2008, with the increase in the Australian dollar gold price more than offsetting lower export volumes. |
| Copper |
| Copper mine production fell slightly in the December quarter, largely reflecting lower production at BHP Billiton’s Olympic dam and OZ Minerals’ Golden Grove mine. Production and export volumes of refined copper increased in the quarter, as higher concentrate supply from Xstrata’s Mount Isa operation resulted in increased production at the Townsville refinery. The volume of copper exports rose by 12 per cent in the quarter. However, lower prices resulted in export revenues declining by 6 per cent to $1.7 billion. |
| Nickel |
| December quarter refined nickel production (39 000 tonnes) recovered from weak September quarter production (17 000 tonnes), an increase of 117 per cent quarter on quarter. The weak September quarter production reflected reduced availability of gas and the rebuild of BHP Billiton’s Kalgoorlie smelter. Production growth in the December quarter therefore represents a return to volumes closer reflecting the historical average, rather than any growth in capacity. A fall in prices, both in US dollar and Australian dollar terms, partly offset the growth in export volumes, resulting in a 63 per cent quarter on quarter increase in export earnings to $452 million. However, this was 57 per cent lower than export earnings for the December quarter 2007. |
| Zinc |
| Production of mined zinc increased by 6 per cent in the December quarter compared with the September quarter 2008. This was primarily the result of high ore grades at OZ Minerals’ Golden Grove operation. Despite the increase in production, Australian zinc export volumes declined in the December quarter because of falling demand associated with the global economic downturn. Zinc prices, in US dollar terms, declined by around 33 per cent on the London Metal Exchange during the December quarter 2008. However, this was largely offset by a sharp depreciation of the Australian dollar. Therefore, a 17 per cent decline in export earnings mainly reflects a decline in export volumes. |
| Australian minerals sector in 2008 |
| Earnings from Australia’s mineral resources exports increased by 45 per cent to $152 billion in 2008 because of substantially higher prices for Australia’s principle commodity exports such as iron ore, coal, gold, oil and gas. The main contributors to higher mineral resources export earnings in 2008 were: metallurgical coal, up $18 177 million; iron ore, up $14 317 million; thermal coal, up $7525 million; LNG, up $3738 million; crude oil, up $2643 million; and gold, up $2548 million. Export earnings for these commodities increased substantially because of higher prices received and, with the exception of metallurgical coal, higher export volumes. Nickel recorded the largest decline in export earnings in 2008 compared with 2007, falling by $2777 million (50 per cent). The main reason for the decrease in nickel export earnings was a 43 per cent decline in US dollar prices and lower export volumes. Other commodities which recorded significant decreases in export earnings in 2008 include: zinc, down $1782 million; lead, down $246 million; refined petroleum products, down $244 million; and uranium oxide, down $148 million. Australia’s production of mineral resources was mixed in 2008 compared with 2007. Commodities which recorded significantly higher production were lead bullion, iron ore and refined copper. Lead bullion production increased by 33 per cent because of record production at Xstrata’s Mount Isa smelter. Iron ore production increased by 14 per cent in 2008 to 341 million tonnes following the commissioning of iron ore projects by BHP Billiton, Rio Tinto and Fortescue Metals. Refined copper production increased by 14 per cent because of the start up of CopperCo’s Lady Annie SX-EW operation, along with higher output from Xstrata’s Townsville refinery and BHP Billiton’s Olympic Dam operation. Commodities which recorded significant declines in production were refined tin, intermediate nickel, mined tin and mined gold. Refined tin production declined by 100 per cent because of the closure of Australia’s only tin refinery. Production of intermediate nickel declined by 41 per cent because of a rebuild of the Kalgoorlie nickel smelter and reduced gas availability associated with the Varanus Island gas explosion. Mined tin production declined by 14 per cent because of the closure of Metals X’s Collingwood tin mine. Production of mined gold declined by 13 per cent in 2008 compared with 2007. Lower ore grades, changes to mine sequencing and gas shortages attributable to damage at the Varanus Island gas plant have all contributed to this outcome. |
|
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export volume |
 |
export value |
|||||||
|
|
||||||||
2007 |
2008 p |
2007 |
2008 p |
||||||
|
|||||||||
| Bauxite | kt |
7 157 |
8 660 |
Bauxite | $m |
197 |
227 |
||
| Alumina a | kt |
15 264 |
15 902 |
Alumina a | $m |
5 975 |
6 379 |
||
| Aluminium (ingot metal) | kt |
1 652 |
1 682 |
Aluminium (ingot metal) | $m |
5 365 |
5 330 |
||
|
|||||||||
| Coal, black | Coal, black | ||||||||
| Metallurgical | Mt |
138 |
135 |
Metallurgical | $m |
13 892 |
32 069 |
||
| Thermal | Mt |
112 |
126 |
Thermal | $m |
6 845 |
14 370 |
||
| Total | Mt |
250 |
261 |
Total | $m |
20 737 |
46 439 |
||
| Copper bs | kt |
708 |
810 |
Copper d | $m |
6 404 |
7 043 |
||
| Diamonds es | ‘000 ct |
19 231 |
15 670 |
Diamonds cs | $m |
684 |
571 |
||
| Gold bs | t |
411 |
416 |
Gems, other than diamonds | $m |
48 |
50 |
||
| Gold, refined | $m |
10 789 |
13 337 |
||||||
|
|||||||||
| Iron | Iron | ||||||||
| Iron ore and pellets | kt |
266 884 |
310 222 |
Iron ore and pellets | $m |
16 258 |
30 575 |
||
| Iron and steel | kt |
2 501 |
1 811 |
Iron and steel | $m |
1 658 |
1 717 |
||
| Lead bs | kt |
620 |
602 |
Lead d | $m |
2 051 |
1 805 |
||
| Manganese ore | Manganese ore | ||||||||
| and concentrate | kt |
4 871 |
4 002 |
And concentrate | $m |
717 |
2 021 |
||
| Nickel bs | kt |
159 |
144 |
Nickel ds | $m |
5 531 |
2 754 |
||
|
|||||||||
| Petroleum | Petroleum | ||||||||
| Crude oil and other | Crude oil and other | ||||||||
| Refinery feedstock | ML |
15 723 |
16 770 |
Refinery feedstock | $m |
8 708 |
11 351 |
||
| LNG | Mt |
15 |
16 |
LNG | $m |
5 079 |
8 817 |
||
| LPG | ML |
2 757 |
2 364 |
LPG | $m |
1 099 |
1 228 |
||
| Refinery products | ML |
1 879 |
1 247 |
Refinery products | $m |
1 228 |
984 |
||
| Salt | kt |
10 613 |
10 937 |
Salt | $m |
234 |
238 |
||
| Tin b | t |
2 533 |
2 783 |
Silver, refined | $m |
214 |
221 |
||
| Tin d | $m |
34 |
45 |
||||||
|
|||||||||
| Titanium | Titanium | ||||||||
| Ilmenite concentrate | kt |
874 |
1 019 |
Ilmenite concentrate | $m |
100 |
120 |
||
| Leucoxene concentrate | kt |
123 |
21 |
Leucoxene concentrate | $m |
29 |
13 |
||
| Rutile concentrate | kt |
346 |
438 |
Rutile concentrate | $m |
276 |
271 |
||
| Synthetic rutile s | kt |
497 |
511 |
Synthetic rutile s | $m |
334 |
273 |
||
| Titanium dioxide pigment | kt |
177 |
146 |
Titanium dioxide pigment | $m |
398 |
348 |
||
| Uranium oxide (u3o8) | t |
10 232 |
9 663 |
Uranium oxide (u3o8) | $m |
884 |
736 |
||
| Zinc b | kt |
1 460 |
1 515 |
Zinc d | $m |
4 191 |
2 409 |
||
| Zircon concentrate | kt |
610 |
655 |
Zircon concentrate | $m |
453 |
476 |
||
| Other mineral resources f | $m |
5 139 |
6 475 |
||||||
|
|||||||||
| Total mineral resources g | $m |
104 822 |
152 261 |
||||||
|
|||||||||
| Total merchandise | $m |
169 644 |
225 693 |
||||||
| a Includes aluminium hydroxide. b Metallic content of all ores, concentrates, intermediate products (where applicable) and refined metal. c Unsorted and sorted. d Includes metal content of ores and concentrates, intermediate products and nickel metal. e Value of all ores, concentrates, intermediate products (where applicable) and refined metal. f Derived as the difference between total mineral resources exports, below, and the sum of the above items. g Total mineral resource exports on an ABARE balance of payments basis. p Preliminary. s ABARE estimate. Sources: Australian Bureau of Statistics, Canberra; ABARE. |
|||||||||
|
|||||
| Bauxite | kt |
62 398 |
63 789 |
2.2 |
|
| Alumina | kt |
18 844 |
19 321 |
2.5 |
|
| Aluminium (ingot metal) | kt |
1 957 |
1 974 |
0.8 |
|
|
|||||
| Coal | |||||
| Black, salable | Mt |
327 |
329 |
0.6 |
|
|
|||||
| Copper | |||||
| Mine as | kt |
870 |
886 |
1.8 |
|
| Blister b | kt |
399 |
448 |
12.4 |
|
| Refined s | kt |
442 |
503 |
13.8 |
|
| Diamonds | ‘000 ct |
19 231 |
15 670 |
–18.5 |
|
|
|||||
| Gold | |||||
| Mine as | t |
247 |
215 |
–12.9 |
|
| Refined | t |
375 |
361 |
–3.7 |
|
|
|||||
| Iron | |||||
| Iron ore and concentrate s | kt |
299 038 |
341 095 |
14.1 |
|
| Iron and steel s | Mt |
8 047 |
7 777 |
–3.4 |
|
|
|||||
| Lead | |||||
| Mine as | kt |
641 |
645 |
0.7 |
|
| Bullion b | kt |
125 |
167 |
33.3 |
|
| Refined | kt |
202 |
214 |
6.2 |
|
| Manganese s | kt |
5 290 |
4 837 |
–8.6 |
|
|
|||||
| Nickel | |||||
| Mine as | kt |
184 |
202 |
9.7 |
|
| Intermediate | kt |
53 |
31 |
–41.0 |
|
| Refined, class 1 | kt |
100 |
89 |
–10.8 |
|
| Refined, class 2 | kt |
14 |
19 |
36.7 |
|
|
|||||
| Petroleum, field | |||||
| Crude oil and condensate s | ML |
27 102 |
26 729 |
–1.4 |
|
| LPG (naturally occurring) | ML |
4 262 |
3 813 |
–10.5 |
|
| Natural gas | Mm3 |
39 956 |
38 256 |
–4.3 |
|
| Petroleum, total refinery | ML |
40 134 |
39 224 |
–2.3 |
|
| Salt s | kt |
10 855 |
11 160 |
2.8 |
|
|
|||||
| Silver | |||||
| Mine as | t |
1 879 |
1 926 |
2.5 |
|
| Refined | t |
625 |
663 |
6.2 |
|
|
|||||
| Tin | |||||
| Mine as | t |
2 071 |
1 783 |
–13.9 |
|
| Refined s | t |
118 |
0 |
–100.0 |
|
|
|||||
| Titanium | |||||
| Ilmenite concentrate s | kt |
2 340 |
2 042 |
–12.7 |
|
| Leucoxene concentrate | kt |
163 |
157 |
–3.7 |
|
| Rutile concentrate s | kt |
312 |
325 |
4.2 |
|
| Synthetic rutile s | kt |
727 |
683 |
–6.0 |
|
| Titanium dioxide pigment s | kt |
208 |
199 |
–4.6 |
|
| Uranium oxide (u3o8) | t |
10 146 |
9 989 |
–1.5 |
|
|
|||||
| Zinc | |||||
| Mine as | kt |
1 514 |
1 477 |
–2.4 |
|
| Refined | kt |
502 |
499 |
–0.6 |
|
| Zircon concentrate | kt |
601 |
550 |
–8.4 |
|
| a Total metallic content of minerals produced. b Metallic content. p Preliminary. s ABARE estimate. na Not available. Sources: Australian Bureau of Statistics, Canberra; Coal Services Pty Limited; Queensland Government, Department of Natural Resources and Mines; ABARE. |
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