| main features |
| overview |
| prices In the December quarter 2007, the index of export prices of Australian mineral resources (export unit returns) increased by nearly 2 per cent compared with the September quarter 2007. Prices for energy minerals rose by around 3 per cent, primarily because of higher oil prices. Prices for metals and other minerals increased by 0.3 per cent as higher gold and silver prices were offset by declines in prices for most base metals. Compared with the December quarter 2006, the December quarter 2007 index was nearly 4 per cent lower, with higher prices for energy commodities (up 0.1 per cent year on year), more than offset by a decline in prices for metals and other minerals (down nearly 6 per cent year on year). Prices for metals and other minerals have declined relative to the December quarter 2006 as a result of global supply increases and uncertainty surrounding the outlook for the US economy. The stronger Australian dollar also contributed to the overall fall in Australia’s export unit returns. exports Total earnings from Australia’s mineral resources exports fell slightly to $26.7 billion in the December quarter 2007, a decrease of $34 million or 0.1 per cent compared with the previous quarter. Contributing to the fall in export earnings was the negative effect of a stronger Australian dollar, weaker metals and other minerals prices and falls in volumes for some commodities. The commodities that recorded significant increases in export earnings were: crude oil, up $305 million (14 per cent) to $2539 million; liquefied natural gas, up $257 million (22 per cent) to $1430 million; lead, up $184 million (35 per cent) to $709 million; iron ore and pellets, up $132 million (3 per cent) to $4284 million; thermal coal, up $97 million (6 per cent) to $1791 million; and manganese ore, up $49 million (23 per cent) to $258 million. The higher earnings reflect both higher export volumes and prices for these commodities. The commodities that recorded significant declines in export earnings in the December quarter 2007 were: refined gold, down $228 million (8 per cent) to $2501 million; aluminium, down $222 million (16 per cent) to $1168 million; copper, down $196 million (12 per cent) to $1477 million; zinc, down $186 million (16 per cent) to $954 million; nickel, down $142 million (10 per cent) to $1353 million; and metallurgical coal, down $44 million (1 per cent) to $3313 million. The decline in the value of gold exports reflects lower volumes shipped, while the fall in the value of aluminium, copper and nickel exports is a result of lower export volumes (total metal content in ores, concentrates and refined metal) and lower prices received. The decline in zinc and metallurgical coal exports was driven largely by lower prices received. production Production results was higher in the December quarter, with nearly two-thirds of Australia’s major minerals and energy commodities increasing production from the previous quarter. There were production increases for tin ores and concentrate (41 per cent), blister copper (35 per cent), refined copper (32 per cent), diamonds (23 per cent), refined gold (19 per cent), copper ores and concentrate (19 per cent), uranium oxide (18 per cent), refined lead (16 per cent), rutile concentrate (14 per cent), iron ore (10 per cent) and zinc ores and concentrate (9 per cent). Higher tin production was the result of improved performance and higher metal grades at Metals X’s Collingwood tin mine. The increase in blister copper production was the result of record production from Olympic Dam in the December quarter. Refined copper production increased because of higher production from the Townsville copper refinery and Olympic Dam. The commencement of production at the Lady Annie SX–EW (solvent extraction–electrowinning) project also contributed to higher refined copper output. The increase in diamond production reflected higher output during the quarter at Rio Tinto’s Argyle mine in Western Australia. Production from the Argyle mine has fluctuated as the company makes the transition from opencut mining to underground mining. Higher secondary production using gold scrap sourced from overseas contributed to the increase in refined gold production. Australian production of uranium oxide increased by 18 per cent to 2921 tonnes in the December quarter compared with the previous quarter, in line with significantly higher production from the Ranger and Olympic Dam uranium mines. Refined lead production increased by 16 per cent in the December quarter compared with the previous quarter because of higher output from the Port Pirie lead smelter. Rutile concentrate production increased as Consolidated Rutile’s output improved following an upgrade to the rutile circuit. In addition, Iluka Resources’ Douglas mine in Victoria continued to ramp up production after being commissioned during 2007. Production of zinc ores and concentrate increased during the quarter, supported by a substantial increase in production from Perilya’s Flinders zinc project. Iron ore production grew because of higher output from BHP Billiton and Rio Tinto following the completion of mine expansion projects. There were significant declines in production in the December quarter 2007 compared with the previous quarter of crude oil and condensate (5 per cent), natural gas (6 per cent), refined nickel class 1 (7 per cent), saleable black coal (7 per cent), intermediate nickel (8 per cent), naturally occurring LPG (13 per cent) and refined siver (21 per cent). Lower production of LPG, natural gas and crude oil and condensate was the result of a combination of equipment failure and natural field decline. Production of black coal was lower in the December quarter 2007 than in the previous quarter because output from Australian coal mines continued to be constrained by ongoing rail and port constraints in Queensland and New South Wales. Wet weather in Queensland in late December also affected coal production at several mines. The fall in production of refined nickel class 1 and intermediate nickel was the result of scheduled shutdowns at the Kalgoorlie nickel smelter in Western Australia and the Yabulu nickel refinery in Queensland. |
| commodity highlights |
| energy |
| oil and gas In the December quarter, Australia’s oil production totalled 6.4 gigalitres, 5 per cent less than in the September quarter and 12 per cent lower year on year. Gas production was also lower in the December quarter, with naturally occurring LPG production declining by 13 per cent to 1002 megalitres and natural gas declining by 6 per cent to 10 034 million cubic metres. The lower oil and gas production reflects a combination of equipment failure and natural field decline. At the Mutineer–Exeter field, December quarter production was down as a result of electrical damage affecting the subsea pumps. Repairs are not expected to be completed until April 2008. Production at the Laminaria–Corallina field declined in the December quarter because of a gas leak in the Corallina riser. Repairs are scheduled to be completed in the third quarter of 2008. Production from the Cooper Basin oil field in South Australia was lower as a result of natural field decline. However, some of these production losses were partly offset by increased production from the Enfield, Cossack–Pioneer and Stybarrow fields located off the coast of north west Australia. Export earnings from petroleum products increased by 13 per cent to $4586 million in the December quarter compared with the September quarter. Higher prices, particularly for crude oil, were the main reason for the increase in export earnings. coal Australia’s export earnings from black coal increased by 1 per cent in the December quarter compared with the previous quarter as higher thermal coal export earnings more than offset a decline in earnings from metallurgical coal exports. The decline in metallurgical coal export earnings reflected lower export unit values because of an appreciation of the Australian dollar. In contrast, the growth in thermal coal export earnings reflected higher prices received through increased spot market sales. Growth in the volume of Australia’s black coal production and exports continues to be limited by infrastructure constraints. For example, Rio Tinto cited reduced transport allotments in Queensland and reduced port throughput at Newcastle as the primary reason for reducing its coal production. uranium Production of uranium oxide increased by 448 tonnes (18 per cent) in the December quarter 2007 compared with the September quarter. Substantially higher production from the Ranger and Olympic Dam uranium mines contributed to this increase. However, earnings from uranium oxide exports declined by 9 per cent in the December quarter as lower prices more than offset the revenue effects of higher export volumes. |
| minerals |
| iron ore Australian iron ore production was 10 per cent higher in the December quarter than in the September quarter owing to the startup of several mine expansions and new mines. During the quarter, BHP Billiton commissioned the Rapid Growth 3 project and Rio Tinto produced the first ore from the Hope Downs joint venture. Export earnings from iron ore and pellets increased by 3 per cent in the December quarter, underpinned by higher production and export volumes. gold Refined gold production increased substantially in the December quarter from that in the September quarter because of higher secondary production using gold scrap sourced from overseas. Gold mine production was also slightly higher in the December quarter than in the previous quarter. This reflects primarily higher ore grades at Newcrest Mining’s New South Wales operations. Export earnings from gold declined in the December quarter as lower export volumes more than offset higher prices. copper Copper mine production was higher in the December quarter than in the September quarter, with higher production from a number of Australia’s largest copper mines. The mines that made the largest contribution to higher copper mine production were Mount Isa, Olympic Dam and Nifty. Despite higher production in the December quarter, export earnings from copper decreased, reflecting lower export volumes (total metal content of ores, concentrates and refined metal) and export prices. nickel Nickel mine production remained relatively unchanged in the December quarter from that in the September quarter. However, production of refined nickel class 1 and intermediate nickel declined by 7 per cent and 8 per cent respectively because of scheduled shutdowns at the Kalgoorlie nickel smelter in Western Australia and the Yabulu nickel refinery in Queensland. The value of nickel exports declined by almost 10 per cent in the December quarter compared with the previous quarter, mainly because nickel prices continued to fall from record highs achieved earlier in the year. zinc Zinc mine production increased by 35 000 tonnes (9 per cent) in the December quarter compared with the September quarter. The main contributor was Perilya’s Flinders zinc mine in South Australia that increased production by 60 000 tonnes. Partly offsetting the higher production from Perilya’s Flinders zinc mine was lower production following a fire at Xstrata’s Mount Isa zinc concentrator in September and lower production from Perilya’s Broken Hill zinc mine because of a minor earthquake. Export earnings from zinc declined by 16 per cent during the December quarter with significantly lower zinc prices more than offsetting a rise in export volumes. mineral sands Production of ilmenite concentrate, rutile concentrate, leucoxene, synthetic rutile and zircon increased in the December quarter from the September quarter as a number of recently commissioned mines continued to ramp up to production capacity. These operations include Iluka Resource’s Douglas operations in New South Wales (rutile and zircon); Matilda Minerals’ Tiwi Island operations (rutile and zircon); and Bemax’s Murray Basin operations in New South Wales (leucoxene, ilmenite and rutile). Rutile production was also higher because of the benefits of a dry mill rutile circuit upgrade at Consolidated Rutile. |
| australian minerals sector in 2007 |
| Earnings from Australia’s mineral resources exports increased by 5 per cent to $106.6 billion in 2007 as higher export volumes and US dollar prices for most commodities more than offset a significant appreciation of the Australian dollar throughout the year. The main contributors to higher mineral resources export earnings in 2007 were nickel (up $2004 million), gold (up $1925 million), iron ore and pellets (up $1658 million), crude oil (up $1432 million) and lead (up $722 million). Export earnings for these commodities increased substantially because of higher prices received and, with the exception of lead, higher export volumes. The largest decline in export earnings in 2007 compared with 2006 was metallurgical coal, declining by $2321 million (14 per cent). The main reason for the decrease in metallurgical coal export earnings was a 16 per cent decline in US dollar contract prices that took effect from April 2007. The stronger Australian dollar also magnified the effect of the decline in US dollar prices. Other commodities with significant decreases in export earnings in 2007 were copper (down $257 million), alumina (down $140 million), thermal coal (down $132 million) and diamonds (down $98 million). Australia’s production of mineral resources was generally higher in 2007 than in 2006. This is consistent with the increased investment in the minerals and energy sector over the past five years in response to higher prices. For example, iron ore production increased by 9 per cent in 2007 to 299 million tonnes following the commissioning of iron ore projects by BHP Billiton and Rio Tinto. Other significant production increases in 2007 were in tin ores and concentrates (up 41 per cent), rutile concentrates (up 35 per cent), zircon concentrates (up 23 per cent), leucoxene concentrates (up 22 per cent) and manganese (up 16 per cent). ABARE’s most recent forecasts of minerals production, exports and prices for the period from 2007-08 until 2012-13, and analysis of key factors affecting the outlook for minerals and energy commodities, were published in the March issue of ABARE’s quarterly journal, Australian Commodities, released on 4 March 2007. |
| calendar year export summary australian minerals and energy sector |
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 |
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export volume |
 |
export value |
||||||
|
||||||||
2006 |
2007 |
2006 |
2007 |
|||||
|
||||||||
| bauxite | kt |
5 510 |
7 157 |
bauxite |
$m |
134 |
197 |
|
| alumina d | kt |
14 986 |
15 184 |
alumina d |
$m |
6 082 |
5 943 |
|
| aluminium (ingot metal) | kt |
1 618 |
1 659 |
aluminium (ingot metal) |
$m |
5 464 |
5 367 |
|
| coal, black | coal, black |
|||||||
| – metallurgical | Mt |
124 |
138 |
– metallurgical |
$m |
16 228 |
13 907 |
|
| – thermal | Mt |
112 |
112 |
– thermal |
$m |
6 966 |
6 834 |
|
| – total | Mt |
236 |
250 |
– total |
$m |
23 194 |
20 741 |
|
| copper b s | kt |
723 |
703 |
copper b |
$m |
6 600 |
6 342 |
|
| diamonds e s | ‘000 ct |
29 308 |
19 231 |
diamonds c s |
$m |
783 |
684 |
|
| gold b s | t |
349 |
412 |
gems other than diamonds |
$m |
55 |
48 |
|
| iron | gold, refined |
$m |
8 863 |
10 789 |
||||
| – iron ore and pellets | kt |
247 429 |
267 203 |
iron |
||||
| – iron and steel | kt |
2 595 |
2 520 |
– iron ore and pellets |
$m |
14 366 |
16 024 |
|
| lead b s | kt |
669 |
630 |
– iron and steel |
$m |
1 729 |
1 669 |
|
| manganese ore | lead b |
$m |
1 368 |
2 090 |
||||
| and concentrate | kt |
4 207 |
4 841 |
manganese ore |
||||
| nickel b s | kt |
201 |
206 |
and concentrate |
$m |
463 |
712 |
|
| petroleum | nickel b s |
$m |
5 514 |
7 518 |
||||
| – crude oil and other | petroleum |
|||||||
| refinery feedstock | ML |
13 532 |
15 756 |
– crude oil and other |
||||
| – lng | Mt |
14 |
15 |
refinery feedstock |
$m |
7 272 |
8 704 |
|
| – lpg | ML |
2 804 |
2 677 |
– lng |
$m |
5 109 |
5 066 |
|
| – refinery products | ML |
2 018 |
1 891 |
– lpg |
$m |
1 054 |
1 056 |
|
| salt | kt |
10 911 |
10 707 |
– refinery products |
$m |
1 213 |
1 202 |
|
| tin b | t |
1 022 |
2 529 |
salt |
$m |
240 |
236 |
|
| titanium | silver, refined |
$m |
209 |
214 |
||||
| – ilmenite concentrate | kt |
905 |
923 |
tin b |
$m |
10 |
33 |
|
| – leucoxene concentrate | kt |
81 |
123 |
titanium |
||||
| – rutile concentrate | kt |
231 |
346 |
– ilmenite concentrate |
$m |
100 |
106 |
|
| – synthetic rutile s | kt |
490 |
497 |
– leucoxene concentrate |
$m |
25 |
29 |
|
| – titanium dioxide pigment | kt |
173 |
177 |
– rutile concentrate |
$m |
192 |
276 |
|
| uranium oxide (U3O8) | t |
8 661 |
10 232 |
– synthetic rutile s |
$m |
339 |
334 |
|
| zinc b | kt |
1 283 |
1 463 |
– titanium dioxide pigment |
$m |
429 |
399 |
|
| zircon concentrate | kt |
485 |
610 |
uranium oxide (U3O8) |
$m |
533 |
884 |
|
|
||||||||
zinc b |
$m |
3 792 |
4 213 |
|||||
zircon concentrate |
$m |
446 |
453 |
|||||
other mineral resources f |
$m |
5 615 |
4 779 |
|||||
|
||||||||
total mineral resources g |
$m |
101 197 |
106 574 |
|||||
total merchandise |
$m |
165 707 |
169 320 |
|||||
total goods and services |
$m |
209 609 |
217 518 |
|||||
|
||||||||
| 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. |
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| calendar year production summary australian minerals and energy sector |
||||
|
||||
2006 |
2007 p |
change % |
||
|
||||
| bauxite | kt |
61 780 |
62 428 |
1 |
| alumina | kt |
18 311 |
18 844 |
2.9 |
| aluminium (ingot metal) | kt |
1 929 |
1 960 |
1.6 |
| coal | ||||
| – black, salable | Mt |
316 |
322 |
2 |
| copper | ||||
| – mine b s | kt |
879 |
869 |
–1.1 |
| – blister c | kt |
377 |
399 |
5.8 |
| – refined s | kt |
429 |
441 |
2.8 |
| diamonds | ‘000 ct |
29 308 |
19 231 |
–34.4 |
| gold | ||||
| – mine b s | t |
246 |
246 |
–0.1 |
| – refined | t |
379 |
375 |
–1.2 |
| iron | ||||
| – iron ore and concentrate s | kt |
275 042 |
299 061 |
8.7 |
| – iron and steel s | Mt |
7 937 |
8 047 |
1.4 |
| lead | ||||
| – mine b s | kt |
668 |
641 |
–4.0 |
| – bullion c | kt |
118 |
125 |
5.8 |
| – refined | kt |
206 |
202 |
–2.2 |
| manganese s | kt |
4 567 |
5 290 |
15.8 |
| nickel | ||||
| – mine b s | kt |
185 |
183 |
–1.2 |
| – intermediate | kt |
48 |
53 |
9.9 |
| – refined, class 1 | kt |
105 |
100 |
-4.6 |
| – refined, class 2 | kt |
11 |
14 |
24.3 |
| petroleum, field | ||||
| – crude oil and condensate s | ML |
25 774 |
26 721 |
3.7 |
| – lpg (naturally occurring) | ML |
4 700 |
4 262 |
–9.3 |
| – natural gas | Mm3 |
38 886 |
39 959 |
2.8 |
| petroleum, total refinery | ML |
36 527 |
40 134 |
9.9 |
| salt s | kt |
11 363 |
11 440 |
0.7 |
| silver | ||||
| – mine b s | t |
1 728 |
1 879 |
8.7 |
| – refined | t |
634 |
624 |
–1.6 |
| tin | ||||
| – mine b s | t |
1 477 |
2 085 |
41.2 |
| – refined s | t |
572 |
118 |
–79.4 |
| titanium | ||||
| – ilmenite concentrate s | kt |
2 377 |
2 337 |
–1.7 |
| – leucoxene concentrate | kt |
139 |
169 |
21.6 |
| – rutile concentrate s | kt |
232 |
313 |
34.9 |
| – synthetic rutile s | kt |
703 |
727 |
3.4 |
| – titanium dioxide pigment s | kt |
208 |
208 |
0.2 |
| uranium oxide (U3O8) | t |
8 970 |
10 146 |
13.1 |
| zinc | ||||
| – mine b | kt |
1 362 |
1 518 |
11.5 |
| – refined | kt |
463 |
502 |
8.5 |
| zircon concentrate | kt |
491 |
605 |
23.1 |
|
||||
| a Quarterly data are not available. b Total metallic content of minerals produced. c 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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