Australian coal exports will see continued rises in the coming three years as India and Southeast Asian nations' demand for fossil fuels grows, according to the latest Resources and energy quarterly (REQ) released by Australia's Department of Industry, Science and Resources on July 3.

Both thermal coal and metallurgical coal exports from Australia will witness a steady growth at least until 2025, the report said. In addition, Australia's coal shipments to China have rapidly increased since China lifted its informal ban on Australian coal earlier this year, which lasted for up to two years.

As the global second-largest coal exporter, Australia has long been regarded as lagging behind in climate change. Australian government, however, aims to reshape the country as a superpower that develops its important mineral resources and renewables simultaneously, continuing to support the coal and natural gas sectors.

Thermal coal is the single largest contributor to climate change. The report projected a significant year-on-year increase of 7.3% in Australian thermal coal exports and 2.6% growth in metallurgical coal by 2023. Nevertheless, coal export value is expected to drop sharply with global coal prices trending lower.

It also suggested that Australian liquefied natural gas (LNG) exports will experience a decrease in 2023-24 financial year (July 2023-June 2024).

Over the next three years, the largest growth in commodity exports used in the energy transition process, including lithium, copper and nickel, will be achieved. Lithium exports are projected to rise at an annual rate of 20-30%. Despite this, the revenue of these industries remains modest compared to the three major export commodities: iron ore, coal and LNG.

Driven by the surge in commodity prices resulting from the Russia-Ukraine conflict at the start of 2022, Australian energy and mineral export earnings are forecast to reach A$460 billion ($305 billion), a historic high for FY 2022-23 (ending June 30, 2023). However, export revenues are expected to decline in the coming years due to some energy commodity prices dropping back to the levels before the conflict.

Meanwhile, as BHP and Rio Tinto strive to increase extractions from large mines in Western Australia, the country's most lucrative export commodity, iron ore, foresees a constant increase in the next three years.

(Writing by Riley Liang  Editing by Alex Guo)
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