Req Mar2013

Resources and Energy Quarterly
March Quarter 2013
bree.gov.au

March 2013
Acknowledgements The macroeconomic outlook, the individual commodity outlooks and the reviews have identified BREE authors. The statistical tables were compiled and generated by the Data & Statistics Program at BREE and led by Geoff Armitage. Design and production was undertaken by the Media and Parliamentary team at the Department of Resources, Energy and Tourism, Tom Shael, and the BREE Data & Statistics Program. BREE 2013, Resources and Energy Quarterly, March Quarter 2013, BREE, Canberra, December 2013. Commonwealth of Australia 2013
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Postal address: Bureau of Resources and Energy Economics GPO Box 1564 Canberra ACT 2601 Australia Phone: Email: Web: +61 2 6276 1000 info@bree.gov.au www.bree.gov.au
Foreword
This is BREEs second five-year projection of mineral and energy production, exports and values. In addition to a five-year outlook for each of Australias major mineral and energy exports, an overview of the global macro-economy is provided along with three review articles and a set of detailed statistical tables from 201011 to 201213 on production, export volumes, prices and values of key resource commodities. The three reviews include contributions on: global thermal coal markets, a short history of nickel in Australia, and an overview of biofuels. Over the outlook period (201213 to 201718) both the real and nominal values of Australian mineral and energy exports are projected to increase. The real value of Australias energy exports are expected to rise by over half from 201112 and 201718. The biggest single contributor to this growth is LNG exports which are expected, in both nominal value and volume terms, to increase at an annual rate of over 30 per cent over the next five years, and be worth more than $60 billion in 201718. Both thermal coal and metallurgical coal exports are also expected to rise in nominal value terms by, on average, 8 per cent and 4 per cent per year over the outlook period. The nominal value of mineral exports is projected to increase by about 15 per cent from 201112 to 201718, but the real value of mineral exports in Australian dollars is expected to peak in 201415 at around $123 billion (in $201213). The assumed continuation of a highvalued Australian dollar and a fall in the US$ price of iron ore over the outlook period are the principal cause of this dip in the real export values of minerals from 201415. This expected decline in real terms occurs despite a projected average annual increase in the volume of iron ore exports from Australia of about 10 per cent per year from 201112 to 201718. A fall in the export price of key Australian mineral exports from their peaks in 2011, coupled with a high Australian dollar, is expected to result in a 3 per cent decline in the nominal export value (in Australian dollars) of resources and energy exports in 201213, relative to 201112. The total projected value of resources and energy exports in 201213 is about $186 billion, some $6 billion less than in 201112. As a result of a strong projected increase in export volumes of Australias bulk commodities the nominal value of Australias energy and mineral exports is expected to reach a record $205 billion ($199 billion in $201213) in 201314.
Quentin Grafton Executive Director/Chief Economist Bureau of Resources and Energy Economics
March 2013 iii
Contents
Foreword Macroeconomic outlook and resources and energy overview Energy outlook
Oil Gas Thermal coal Uranium
iii 1 18
18 29 38 46
Resources outlook
54
Steel and steel-making raw materials 54 Gold 68 Aluminium 75 Copper 83 Nickel 90 Zinc 97
Reviews 105
An introduction to thermal coal markets Nickel: a short history Biofuels: an overview 106 114 124
Statistical tables BREE Contacts
133 184
iv Resources and Energy Quarterly
March 2013
Macroeconomic outlook and resources and energy overview

Nhu Che, Quentin Grafton, Pam Pham, and Tom Willcock
Global economy: increased confidence but risks remain

Global economic growth is projected to improve and is assumed to be 3.6 per cent for 2013, to increase to 4.1 per cent in 2014, and to reach 4.5 per cent in 2018. Despite better global growth prospects, risks remain, particularly in Europe. The Eurozone economy is likely to shrink in 2013 with further contractions in Italy, Spain, Portugal and Greece this year while Frances output is expected to barely grow and result in a delay in the implementation of its planned austerity targets. The outcome of the February 2013 election in Italy also casts doubt on the ability of democratically elected governments to implement fiscal consolidation and austerity measures and to be subsequently re-elected. The ongoing debt crisis in the European Union (EU) and its spill-over to the real economy and large exporting countries, such as China, along with lingering worries about US fiscal consolidation remain key concerns for the short-term economic outlook. Spill-overs from below trend economic growth in developed economies in 2012 and domestic challenges, especially inflation concerns, have constrained activity and fiscal flexibility in some emerging market and developing economies. Nevertheless, robust growth in developing economies of 5.8 per cent in both 2012 and 2013 is expected by the IMF and should support resource and energy prices and volumes over the foreseeable future. On the positive side, and within developed economies, the spread between bonds issued by debt-troubled Euro members and German bonds have noticeably fallen since the European Central Bank announced its Outright Monetary Transactions program and is prepared to undertake an unlimited asset purchases program. Perceived inter-bank risk has also diminished with a decline in the spread between the London interbank offered rate (Libor) and the overnight indexed swap rate (OIS). Equity markets, especially in the US, have also recovered sharply over the past few monthsa proximate cause is the record monthly inflows into US-listed mutual funds and exchange traded funds. These inflows indicate a growing confidence by investors of future earnings growth. Supporting this investor confidence is record-low interest rates in most developed economies that have made the cost of debt servicing the lowest it has been for decades.
March 2013 1
Overall, growth in the developed economies is expected to increase to 2.1 per cent in 2013 and to rise to 2.4 per cent over the period 20142018. Japanese growth remains weak, but the 11 January 2013 announcement by the Abe government of a 20 trillion yen stimulus package and the announcement on 22 January 2013 by the Bank of Japan to change its inflation target to 2 per cent from its current 1 per cent, and also undertake asset purchases, have contributed to greater investor confidence. The declared fiscal expansion and anticipated monetary easing have helped to increase valuations in Japanese equities and contributed to a decline in the yen against most major currencies. It is too soon to judge whether the planned monetary easing and what will be the 15th stimulus package since 1999, will contribute to higher sustained higher economic growth. Assumed GDP growth for Japan for 2013 is 1.3 per cent with an average growth of about 1.1 per cent assumed for the period 201418. Better than average growth performance of developed economies is expected for the Russian Federation, the US and the UK. Despite a slight fall in output in the fourth quarter 2012, attributed to a decline in exports and a fall in government spending, US growth is expected to increase from its level in 2012. Positive aspects of the US growth trend include increasing business investment which is rising at about 8 per cent per year and consumer spending growing at an annual rate of 2.2 per cent in the fourth quarter 2012. Other positive news for the US includes private debt levels as a proportion of GDP returning to 2003 levels and after-tax income is growing at its fastest rate since the Global Financial Crisis. Further, at the start of the New Year the White House and Congress came to an agreement on fiscal consolidation that, in the absence of an accord, would have resulted in spending cuts and tax increases that may have been detrimental to short-term growth and business confidence. Emerging economies, particularly those in Asia are expected to contribute an increased share of world economic output over the outlook period and the prospect for emerging-market economies remains strongly positive. Most of Latin America experienced robust economic growth in 2011 and while this moderated in 2012, it is expected to regain strength and an average growth rate of around 4 per cent per year is assumed over the outlook period.
2 Resources and Energy Quarterly
March 2013
Figure 1:
World economic growth

6 5 4 3 2 1 % -1 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 World economic growth (%)
Sources: BREE; IMF.
In non-OECD Asia, economic growth is expected to recover slightly from 2012 with an overall average annual growth rate of almost 7 per cent. India and China, in particular, are expected to maintain very high growth rates. India is assumed to grow at 6 per cent per year over the period 201318 while Chinas assumed growth rate is 7.5 per cent is consistent with the Chinese government target for GDP growth in 2013. This target represents stated Chinese government policy to ensure strong economic growth and price stability. Near-term growth in ASEAN countries that include Indonesia, Malaysia, Philippines, Thailand, and Vietnam is assumed to be around 6.0 per cent supported by strong domestic and foreign investment. Robust economic growth from the Republic of Korea is expected with an assumed GDP growth of 3.6 per cent in 2013, and an average assumed growth of about 4.1 per cent over the period 201418.
March 2013 3
Table 1: Key macroeconomic assumptions for resources and energy
unit Economic growth bc OECD United States Japan Western Europe Germany France United Kingdom Italy Korea, Rep. of New Zealand Developing countries Non-OECD Asia South East Asia d China e Chinese Taipei Singapore India Latin America Middle East Russian Federation Ukraine Eastern Europe World c Industrial production b OECD Japan China Inflation rate b United States Interest rate US prime rate g % % % % % % % % % % % % % % % % % % % % % % % % % % % % pa
2011 1.3 1.8 0.8 1.3 3.2 1.7 0.8 0.4 3.6 1.1 6.6 7.7 4.5 9.2 4.1 5.0 6.8 4.5 3.5 4.3 5.2 5.3 3.8 0.5 0.9 9.9 4.3 3.3
2012 1.4 2.2 2.3 0.3 1.0 0.1 0.4 2.3 2.7 2.2 5.8 6.5 5.4 7.8 1.3 2.1 4.9 4.5 3.3 3.7 3.0 5.3 3.3 1.0 7.1 8.8 3.1 3.3
2013 a 2.1 2.1 1.3 1.1 0.9 0.4 1.1 0.7 3.6 3.1 5.8 6.8 5.8 7.5 4.0 3.0 6.0 3.2 5.3 3.8 3.5 2.0 3.6 1.2 5.9 9.4 1.9 3.3
2014 a 2.4 3.0 1.1 1.5 1.4 1.1 2.2 0.5 4.1 2.7 5.8 6.8 5.7 7.5 4.6 3.7 6.0 3.9 3.6 3.9 3.5 2.6 4.1 1.2 5.3 9.4 1.0 3.4
2015 a 2.4 3.4 1.2 1.6 1.4 1.5 2.6 1.2 4.1 2.6 5.9 6.9 5.7 7.5 4.8 3.8 6.0 4.1 3.8 3.9 3.5 3.2 4.3 1.1 4.5 9.3 1.0 3.5
2016 a 2.4 3.4 1.1 1.6 1.4 1.8 2.6 1.4 4.1 2.3 5.9 6.9 5.9 7.5 4.9 3.9 6.0 4.0 4.3 3.8 3.5 3.5 4.4 1.1 4.0 9.2 1.3 3.5
2017 a 2.4 3.3 1.1 1.6 1.3 1.9 2.7 1.4 4.1 2.3 5.9 6.9 6.0 7.5 5.1 4.0 6.0 4.0 4.5 3.8 3.5 3.7 4.5 1.1 4.0 9.1 1.4 3.5
2018 a 2.4 3.3 1.1 1.6 1.3 1.9 2.7 1.4 4.1 2.3 5.9 6.9 6.0 7.5 5.1 4.0 6.0 4.0 4.5 3.8 3.5 3.7 4.5 1.1 4.0 9.1 1.4 3.5
a BREE assumption. b Change from previous period. c Weighted using 2012 purchasing power parity (PPP) valuation of country gross domestic product by IMF. d Indonesia, Malaysia, the Philippines, Thailand and Vietnam. e Excludes Hong Kong. g Commercial bank lending rates to prime borrowers in the United States. Sources: BREE; Australian Bureau of Statistics; International Monetary Fund; Organisation for Economic Cooperation and Development; Reserve Bank of Australia.
March 2013
Economic prospects in Australias major mining export markets

Non-OECD economies
A number of Chinese Government policies are expected to constrain growth in 2013 to levels below the average rate over the past decade. Key stated objectives of the Chinese government include keeping the annual inflation rate at or below 3.5 per cent and the fiscal deficit at about 2 per cent of GDP. Fixed asset investment (FAI) in 2013 is expected to rise to 21 per cent from 18 per cent in 2012 which will stimulate infrastructure investment and help to offset a dip in a key index of Chinese manufacturing in February 2013. Over the longer term, as outlined in its five year plan, the Chinese government is specifically focusing on higher quality growth that includes further actions to improve air quality and reduce the growth in greenhouse gas emissions, tax reform, the promotion of market-based reform in terms of the setting of interest rates and foreign exchange rates, and steps to resolve increasing wealth disparity. The current annual inflation rate in China, based on the most recent monthly statistics, is 3.2 per cent and is close to the targeted maximum of 3.5 per cent. Much of the recent rise in the price level is attributable to food prices which have increased about 6 per cent over the past year. A matter of concern is that new credit on an annual basis has quadrupled since 2007 while private credit has risen to about 180 per cent from 130 per cent in 2008. Consistent with the Chinese governments stated aim to achieve price stability, current price and credit growth is likely to limit the scope for fiscal expansion such that economic growth is assumedUPCFBU its target level of 7.5 per cent. The continued expansion of industrial production and infrastructure developments in China are expected to support growth in energy and minerals consumption over the medium term. The growth of resource intensive industries such as electricity generation and steel, pig iron and cement production is expected to remain robust over the outlook period even if investment as a share of GDP were to decline to pre-GFC levels by 2018. Over the long term, Chinas growing technological prowess will support structural change in the economy. Continuing strength of the Chinese economy, Australias largest export market for resources and energy, will be important to maintain projected volumes and high commodity prices over the outlook period.
March 2013 5
Figure 1: Economic growth in Australias major resource and energy export markets
12 10 8 6 4 2 % China Japan 2010 Republic of Korea 2012 2014 India 2018 United States
Sources: BREE, IMF.
Box 1: Fiscal Cliff and US Sequestration

Fiscal consolidation is the process of reducing the government deficit and growth in the public debt. It represents the reversal of fiscal expansion which is the typical response to reduced domestic and external demand. Fiscal consolidation is under way in most G20 countries, but at different speeds. In the US, the Republican controlled House of Representatives has wanted fiscal consolidation to occur at a faster rate than that proposed by President Obama. This dispute recently came to a head with the so-called fiscal cliff which would have resulted in tax increases and spending cuts of about US$600 billion and may have adversely affected growth in 2013. In a last minute agreement both the White House and Congress at the start of 2013, agreed to compromise on fiscal austerity. As part of this agreement, sequestrationautomatic spending cuts set to take place across the federal government were delayed for two months. As of March 12 2013, the US sequester is being implemented and involves across-the-board cuts in key agencies of about $85 billion in 2013 as well as additional cuts worth $109 billion over the next 8 years. The current sequester crisis is reminiscent of the 2011 debt ceiling crisis which was also a dispute about the direction of fiscal policy between the President and Congress and which contributed to the downgrade of US debt by a key ratings agency.
Sources: IMF; Reserve Bank of Australia; National Bureau of Statistics of China.
March 2013
Over 2012 Indian economic growth moderated, in part, as a result of government policies intended to combat rising inflationary pressures, but also due to weaker external demand and a decline in business confidence. Economic growth, however, is expected to pick up and is assumed to be 6.0 per cent in 2013 and to remain at that level from 20142018.
OECD economies
The German economy remains central to Western European demand for resources and energy commodities. It is a matter of some concern, therefore, that according to the German Federal Statistical Office its economy contracted 0.60 per cent in the fourth quarter of 2012. The German economy is heavily export-oriented and is the second largest exporter in the world with exports accounting for more than one-third of national output. As a result of weaker global demand in 2012 and the European sovereign debt crisis Germanys economy shrank at the end of 2012, but data from January 2013 indicate that its exports are rising at the fastest rate for the past 5 months. Further improvements in export growth should support faster growth in 2013 assumed to be 0.9 per cent, and a higher average growth rate assumed to be about 1.4 per cent over the period 20142018. In Greece, Italy, Portugal, and Spain, fiscal tightening, banking system concerns, low consumer confidence and high unemployment are still having a negative impact on domestic demand. Outside of the Eurozone, the UK economy is assumed to improve over the medium term and to grow, on average, about 2.6 per cent over the period 201418. France, the second largest economy in the Eurozone, experienced stagnant economic growth in 2012, but its prospects are expected to improve over the outlook period and its growth is assumed to be 1.9 per cent per year by 2018. Over the period 201418, annual economic growth in Western Europe is assumed to be 1.6 per cent per year, a level slightly above the assumed German growth rate. The US economy continues to recover supported by increases in consumption and business investment, and forward-looking indicators of economic activity are improving. Its unemployment rate is declining and there are increasing signs of recovery in the housing sector. Growing strength in both the US housing market and its manufacturing sector should increase demand for mining and energy commodities. In particular, housing starts increased from 478 000 units at the height of the global financial crisis to 720 000 units in January 2012 and 954 000 December 2012. Assumed very low nominal interest rates over the next two years are also expected to provide on-going stimulus to business investment. Despite its growing strength the US economy faces some short-term downside risks. The primary challenge is to undertake fiscal consolidation without jeopardising economic growth. The March 2013 sequester which legislates arbitrary Government spending cuts has created uncertainty about how fiscal consolidation will occur and whether the cuts will be directed to where they are most needed. On the basis that a sustainable plan for fiscal consolidation will be implemented over the outlook period it is assumed that US GDP grows at 2.4 per cent year over the period 201418.
March 2013 7
Commodity prices
Commodity prices increased substantially in 2010 and rose again, but at a slower rate, in 2011. As a result of weakness in the global economy prices of most commodities declined in 2012 relative to their peaks, but still remained at historically high levels. In addition to a dip in prices 201213, relative to their peaks, there has been increased volatility in the USD prices of some key commodities exported by Australia, most notably iron ore. Gold demand as a reserve and for speculative purposes provided underlying support for gold prices throughout much of 2012. Increasing confidence in the global economy, especially the belief by some investors that the worst of the European debt crisis is over, has prompted some investors to move from gold to other assets. This should contribute to a decline in the gold price over the outlook period. By contrast, most other metals (aluminium, lead, nickel and zinc) are expected to maintain current price levels although the copper price is projected to decline over the 201418 period. In terms of bulk commodities, both thermal coal and metallurgical coal are projected to, more or less, maintain their first quarter 2013 price levels. The exception to this trend is iron ore which is projected to maintain its price volatility, but its average price level is expected to decline over the outlook period. Figure 3: Metal prices
800 700 600 500 400 300 200 100 index 2000=100 2000 2002 copper 2004 2006 aluminium 2008 2010 gold 2012 lead 2014 2016 nickel 2018 zinc
Sources: BREE; LME.
March 2013
Figure 4: Bulk commodity prices

1200 1000 800 600 400 200 index 2000=100 2000
2002
2004
2006
2008
2010
2012
2014 iron ore
2016
2018
thermal coal
metallurgical coal
Source: BREE.
Demand for resources and energy commodities

Global resource and energy commodity demand is expected to increase marginally in 2013 despite notable downside risks associated with recovery in Europe and political debate about the speed of fiscal consolidation in the US. An apparent resolution of the fiscal cliff (see box) combined with improving GDP growth, stabilising unemployment, and rebounding industrial production following a sharp dip caused by Octobers Hurricane Sandy, bode well for increased US prosperity. Nevertheless, some concerns remain, particularly in terms of ensuring a stable and sustainable fiscal environment over the outlook period. Recent production growth in Japan, spurred by reconstruction activity, is likely to moderate in 2013. Offsetting this effect is the recent announcements of a stimulus package that is expected to support economic growth in 2013. Chinese growth remains the lynchpin of global bulk commodity demand. Asian demand will also be supported by non-OECD growth, particularly within ASEAN countries. In particular, Thailand and Vietnam are likely to be key growth economies with industrial production assumed to increase from 4 to 5.5 per cent and from 6.5 to 7.2 per cent, respectively in 2013. Indian growth is also expected to improve from 2012 and is assumed to grow at a robust 6 per cent from 2013 to 2018. Crude oil, gas and thermal coal demand are all expected to grow over the outlook period. Much of the growth will occur in the Asia Pacific, and in particular in China and India.
March 2013 9
Supply for resources and energy commodities

The global supply of resource and energy commodities is expected to grow at a faster rate than the previous decade. In particular, resources and energy projects financed during the record high commodity prices of 2011, and before, will come to fruition during the outlook period. Global growth in iron ore production is projected to be particularly strong. Fortescue Metals Group, Rio Tinto and BHP Billiton, three dominant players in the worlds largest iron ore export marketAustraliacontinue to expand their capacity through mine, transport and export infrastructure investments. Brazilian miner Vale is also expected to substantially expand its iron ore production, particularly later in the outlook period. Metallurgical coal supply, linked to iron ore because of their concurrent use in the steFl making process, will be supported by substantially higher Australian output over the outlook period. Thermal coal supply has grown strongly over the past decade, but its growth may begin to slow by the end of the outlook period as a result of fuel switching and increased electricity generation from renewables. Growth in oil supply is expected over the outlook period, especially from non-OPEC sources including the US, Canada and Russia and also from a key OPEC member, Iraq. Increased unconventional gas production in North America and high gas prices in potential export markets is expected to result in substantial LNG export volumes by the end of the outlook period, particularly into the Asia Pacific region.
Australias economic prospects

Based on ABS data, the Australian economy grew 0.6 per cent over the last quarter of 2012 and enjoyed a growth rate of 3.1 per cent for 2012. In terms of real GDP, based on purchasing power parity (PPP), Australian economic growth for 20112012 was 2.9 per cent. Based on IMF forecasts, it is assumed that Australian economic growth will improve slightly to 3 per cent in 201213, and average 3.3 per cent over the period 201314 to 201718. Recent economic data suggest that the mining sector will continue to perform strongly in terms of both volumes of exports and growth in capital investments. Overall, Australian domestic demand continues to grow at a positive rate, although the high level of the exchange rate, and changes in household spending and borrowing behaviour has had a negative effect on some sectors. As a result, the Reserve Bank Board lowered its target for the cash rate by 25 basis points in October 2012 and by the same amount in December 2012 to its current level of 3.00 per cent, but has so far kept the cash rate unchanged in 2013. Over the outlook period, growth in the Australian economy is expected to be supported by mining-related activities. Historically high levels of mining investment are expected to continue, but are likely to peak over the next couple of years. In particular, large expansions to gas, iron ore and coal production capacity are underway, and are expected to contribute to robust growth in resource export volumes over the foreseeable future.
March 2013
Table 2:
Australias key macroeconomic assumptions for resources and energy

unit 2010 11 1.8 3.1 6.6 0.99 74 2011 12 2.9 2.7 6.1 1.03 76 2012 13 a 3.0 2.9 5.7 1.03 76 2013 14 a 3.3 2.9 5.7 1.00 74 2014 15 a 3.3 2.9 5.7 1.01 74 2015 16 a 3.3 2.9 5.7 1.02 75 2016 17 a 3.3 2.9 5.7 1.02 75 2017 18 a 3.3 2.9 5.7 1.02 75
Economic growth bc % Inflation rate b % Interest rate d % Nominal exchange rates e US$/A$ US$ Trade weighted index for A$ g index
a BREE assumption. b Change from previous period. c Weighted using 2012 purchasing power parity (PPP) valuation of country gross domestic product by IMF. d Large business weighted average variable rate on credit outstanding. e Average of daily rates. g Base: May 1970 = 100. Sources: BREE; Australian Bureau of Statistics; Reserve Bank of Australia.
The Australian dollar increased slightly over the past six months from US 101c in June to US 104c in December 2012. In the March quarter 2013, the Australian dollar traded at around US 104c while the trade-weighted index was 78, or at levels very similar to the final quarter of 2012. Over the outlook period, it is assumed that the Australian dollar will remain at close to historic highs due to expected stronger economic growth in Australia, recovery in the EU economy and relatively low on-going interest rates in the US that should dampen demand for US dollars (see Figure 5). The demand for Australias exports in Asia, and market expectations about minerals and energy commodity prices, are also factors that will influence the value of the Australian dollar over the outlook period. Competitive currency devaluations that some countries view as a means to stimulate demand will also support the Australian dollar over the outlook. Factors that may cause the Australian dollar to weaken include reduced risks in the world economy that will undermine Australias status as a safe haven, a recovery of the US economy and further declines in domestic interest rates. Figure 5: Australian exchange rate
1.2 1.0 0.8 0.6 0.4 0.2 US$ 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Sources: BREE; RBA.
March 2013 11
The Australian mining industry

The gross value added, by chain volume measures, of the Australian mining industry was about 142.6 billion (in 201213 prices) in 201112, equivalFnt to about 10 per cent of Australias GDP. Of this total, mining activities and exploration and mining support services contributed $132.2 and $10.5 billion, respectively. Figure 6: Australian mining industry gross value added, chain volume measures
150 140 130 120 110 2012-13 A$b 10.5 10.1 9.7 9.3 8.9 % 1989-90 1993-94 1997-98 2001-02 2005-06 2009-10 mining industry gross value added
share of GDP (right axis)
Source: ABS.
Energy and minerals commodity exports account for a large proportion of Australias commodity exports. In 201112, energy and minerals commodity exports totalled $192.6 billion (in nominal dollars), and accounted for about 83 per cent of Australian total value of commodity exports. The principal importers of Australian energy and mineral commodities include China, Japan and the Republic of Korea. Despite the fact that commodity prices moderated in 2012, relative to 2011, overall private new capital expenditure in the Australian mining sector continues to rise and in 201112 and was around $84.4 billion (in 201213 prices) with expected investment in 2013 to be in excess of $100 billion. The share of the mining sector as a proportion of new capital expenditure of Australias total industries has increased substantially over the past decade, rising from 15 per cent in 200102 to over 50 per cent in 201112. Much of this growth is underpinned by liquefied natural gas (LNG), coal and iron ore projects. Over the outlook period annual capital expenditures should remain at historic high levels as the mega LNG projects are completed although the stock of planned capital expenditures may be expected to peak in the near future and then gently decline.
March 2013
Figure 7: Investment in private new capital expenditure

90 75 60 45 30 15 2012-13 A$b 60 50 40 30 20 10 % 1989-90 1992-93 1995-96 1998-99 2001-02 2004-05 2007-08 2010-11
private new capital expenditure
share of total industries (right axis)
Source: ABS
As a capital-intensive industry, the share of the Australian mining industry in total employment is low, approximately 2 per cent over the past three years. The industry directly employed around 249 000 people in 201112, with the metal ore industry employing the largest number of people, followed by the coal industry, and the oil and gas extraction industry. Figure 8: Employment in the Australian mining industry
300 250 200 150 100 50 000 people
1990-91 coal
1993-94
1996-97
1999-00
2002-03
2005-06
2008-09
2011-12
oil and gas extraction
metal ores
other mining (including services)
Source: ABS.
March 2013 13
Australian resources and energy commodities production and exports

In 201112, the overall index of Australian mine production was relatively stable, increasing by less than one per cent from 201011. This was the result of increased minerals production marginally offsetting a small dip in energy commodities production (primarily due to flooding in Queensland that reduced coal production). Total Australian mine production is forecast to increase by 7 per cent in 201213 relative to 201112, primarily due to a 13 per cent increase in the output of energy commodities, particularly thermal coal, metallurgical coal and uranium. Also contributing to this growth will be a 2 per cent increase in the production of metals and other minerals, strongly supported by supply growth in iron ore. Figure 9: Australian mine production
200 180 160 140 120 100 80 60 40 20 index 1997-98=100 1989-90 1993-94 1997-98 energy 2001-02 2005-06 2009-10 2013-14 2017-18
minerals
Source: BREE.
Export earnings from energy and minerals commodity exports increased by 5 per cent in real terms between 201011 and 201112, reaching some $198 billion (in 201213 dollars) in 201112. Of this total, export earnings from minerals commodities contributed $119 billion, accounting for about 60 per cent of the total. Export earnings from energy commodities accounted for a smaller share, 40 per cent, and contributed approximately $79 billion in real terms to the total value of Australian energy and minerals exports.
March 2013
Figure 10: Australian energy and minerals export earnings

140 120 100 80 60 40 20 2012-13 A$b 1989-90
1993-94
1997-98
2001-02 energy
2005-06
2009-10 minerals
2013-14
2017-18
Sources: BREE; ABS.
In 201213, the total export earnings for energy and minerals commodities are forecast to decrease by 6 per cent to $186 billion due to slight falls in the export values for both energy and minerals commodities. Energy commodity export earnings are forecast to fall by 5 per cent to $7 billion in real terms, primarily as a result of falling commodity prices. A large drop in metallurgical coal earnings (down 25 per cent to $23 billion) will be somewhat offset by gains in thermal coal (up 3 per cent to $17.6 billion), LNG (up 36 per cent to $16.2 billion) and oil (up 8 per cent to $14.3 billion). In 201213, minerals commodity export earnings are forecast to decrease by 4 per cent to $111 billion as a result of decreases in the export value of iron ore (down 9 per cent to $57 billion), aluminium (down 11 per cent to $3.4 billion and nickel (down 18 per cent to $3.3 billion). Partially offsetting the decreased export earnings for mineral commodities will be higher forecast export earnings for alumina (up 19 per cent to $6.1 billion), and gold (up 10 per cent to $17 billion). Over the outlook period, the real value of mineral export earnings is projected to peak at $123 billion (in 201213 dollars) in 201415 before declining to $116 billion in 201718. A fall in iron ore prices after 201415 is the principal cause of the decline in export earnings. Over the medium term, the outlook for energy and minerals commodity exports remains robust. Investment in LNG production facilities will drive a surge in LNG exports over the outlook period and the commissioning of the Pluto LNG project in 2012 is expected to boost exports in 2013. Based on mining, rail and port infrastructure expansions currently under way, or in planning, significant growth in coal export capacity is expected over the next three years. The detailed outlook for major energy and minerals commodities is outlined in the following Resources Outlook and Energy Outlook sections of this report.
March 2013 15
Table 3:
Australias resources and energy commodity exports, by selected commodities

Volume unit 201112 16 592 1 693 889 304 470 240 1 572 19 142 158 19 212 6 917 201718 z 20 392 1 488 1 155 362 821 276 1 586 88 214 304 22 404 10 140 Annual growth % 3.7 2.1 4.5 3.0 9.8 2.5 0.5 31.3 7.1 11.5 3.2 7.4 Nominal value unit $m $m $m $m $m $m $m $m $m $m $m $m 201112 5 146 3 797 8 501 15 462 62 695 4 056 2 292 11 949 30 700 17 118 13 205 607 201718 z 7 774 3 336 11 027 15 028 71 054 5 381 2 967 60 953 34 692 26 770 15 478 1 050 Annual growth % 7.4 2.0 4.6 0.3 2.4 5.5 4.8 33.3 3.0 7.8 3.2 10.1
Commodity Alumina Aluminium Copper Gold Iron ore Nickel Zinc LNG Metallurgical coal Thermal coal Oil Uranium
kt kt kt t Mt kt kt Mt Mt Mt ML t
z BREE projection. Sources: BREE; Australian Bureau of Statistics.
Table 4:
Medium term outlook for Australias resources and energy commodities

unit 2010 11 0.99 179 237 188 622 70 143 73 816 109 094 114 806 92.9 88.8 96.7 172 067 181 077 2011 12 1.03 192 583 198 167 77 029 79 263 115 553 118 904 93.2 88.3 98.1 184 879 190 241 2012 13 f 1.03 186 452 186 452 75 314 75 314 111 138 111 138 100.0 100.0 100.0 178 993 178 993 2013 14 z 1.00 205 054 199 275 81 074 78 790 123 979 120 485 105.3 103.4 106.9 196 851 191 304 2014 15 z 1.01 221 100 208 813 90 870 85 820 130 230 122 993 112.1 108.8 114.7 212 256 200 461 2015 16 z 1.02 240 744 220 958 114 431 105 027 126 313 115 931 116.4 114.5 118.0 231 114 212 119 2016 17 z 1.02 259 030 231 041 127 871 114 054 131 159 116 987 123.3 127.0 120.4 248 669 221 799 2017 18 z 1.02 276 205 239 417 142 844 123 818 133 361 115 598 125.7 133.5 120.0 265 157 229 840
Commodity exports
Exchange rate Resources and energy real a Energy real a Metals and other minerals real a US$/A$ A$m A$m A$m A$m A$m A$m index index index A$m A$m
Value of exports
Resources and energy sector

Volume of mine production b energy metals and other minerals Gross value of mine production real a
a In 201213 Australian dollars. b Base: 201213 = 100. f BREE forecast. z BREE projection. Sources: BREE; Australian Bureau of Statistics.
March 2013
Major Australian commodity exports

LNG and alumina are export unit returns in $A. All other commodities are world indicator prices in $US. For export value, annual forecasts are the sum of quarterly forecasts. As a result, annual export values do not necessarily reflect variations in export volumes, world prices and exchange rates. Thermal coal is the annual negotiated contract price for the Japanese fiscal year running from April 2011 to March 2012.
2012-13 f 2011-12
Iron ore and pellets Metallurgical coal Thermal coal Gold A$57.0b a A$62.7b A$23.0bb A$30.7b A$17.6bc A$17.1b A$17.0bd A$15.5b A$16.2be A$11.9b A$14.3bf A$13.2b A$8.6b g A$8.5b A$6.1b h A$5.1b A$3.4b i A$3.8b A$3.3b j A$4.1b A$2.1bk A$2.2b A$2.1b l A$2.3b A$1.6b m A$1.6b A$1.2bn A$1.2b A$1.1bo A$1.0b 0 $b 15 30 45 60 75
201213 f volume Iron ore and pellets Metallurgical coal Thermal coal Gold LNG Crude oil Copper Alumina Aluminium Nickel Lead Zinc Bunker fuel Manganese ore LPG world price value
p
11%
q
-13%
q
-9%
p
7%
q
-34%
q
-25%
p
18%
q
-11%
p
3%
p
6%
q
-1%
p
10%
LNG Crude oil
p
26%
p
7%
p
36%
p
13%
p
2%
p
8%
Copper Alumina
p
7%
q
-1%
p
1%
p
19%
0%
p
19%
Aluminium
q
-3%
q
-7%
q
-11%
Nickel Lead
p
2%
q
-12%
q
-18%
q
-4%
p
4%
q
-4%
Zinc
q
-6%
q
-3%
q
-10%
Bunker fuel Manganese ore LPG
0%
0% na
0%
q
-1%
0%
p
12%
p
2%
p
15%
March 2013 17
Energy outlook
Oil
Nhu Che, Pam Pham and Alex Feng
Oil prices
The real WTI crude oil price averaged US$95 a barrel (in 2013 dollars) in 2012, or a decrease of 3 per cent relative to 2011. The Brent price fell slightly by 1 per cent in 2012, relative to 2011 to average US$112 a barrel. Lower prices are attributed to weak economic growth in major economies, a recession in the euro zone and lower economic growth in China. The real WTI price is forecast to remain at an average of US$95 a barrel in 2013, while the real Brent price is forecast to increase slightly, averaging US$113 a barrel in the same year. Crude oil prices edged higher as 2012 drew to a close, supported by stronger than expected winter demand and geopolitical concerns (see Figure 1). By mid-January, prices were trading above December levels, with the Brent price at $110.75 per barrel and the WTI price around $95.15 per barrel. Oil prices are projected to fall in 2014, as a result of an increased supply of liquid fuels by non-OPEC countries. By 2014, several US pipeline projects from the Mid-continent to the Gulf Coast refining centres are expected to come online that will reduce the cost of transporting crude oil to refiners. This, in turn, should result in a fall in the discount of WTI to Brent over the forecast period. Over the long-term period to 2035, the International Energy Agencys (IEA) latest New Policies Scenario projections have oil prices rising steadily to reach US$146 and US$215 a barrel by 2020 and 2035, respectively. Both WTI and Brent prices are projected to follow this trend. Over the medium term outlook period from 2015 to 2018, the WTI and Brent prices are projected to increase steadily by an average of 1 per cent per year. In 2018, the WTI price and Brent price are assumed to average US$89 and US$113 a barrel, respectively (see Figure 2).
March 2013
Figure 1: Weekly WTI oil price

160 140 120 100 80 60 40 20 US$/bbl
November 2007 November 2008 November 2009 November 2010 November 2011 November 2012
OPEC announces production cut Re nery re in Texas Hurricane Ike and Gustav Tension between Iran and Israel Lower production from Venezuela and Russia Global nancial crisis US credit rating downgrade Cold northern hemisphere winter Exports from Iraq reaches highest level since the US led invasion Record oil imports from China Russia increases output Outlook for world economy improves Start of European debt crisis Outbreak of civil war in Libya IEA oil reserve release World economy uncertainties Earthquakes and tsuanmi in Japan Iran threatens to block the Strait of Hormuz
Sources: BREE; EIA.
There are two significant risks to the outlook for oil prices. The first risk relates to potential escalations of tensions in the Middle East that could cause production disruptions, and put upward pressure on oil prices. The second risk is weaker than assumed world economic growth over the next 12 to 18 months, which may put downward pressure on oil prices. Figure 2: Annual WTI and Brent oil prices
120 100 80 60 40 20 0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
WTI
Brent
Sources: BREE; EIA; IEA.
March 2013 19
World oil consumption

World oil consumption increased by 1 per cent in 2012, relative to 2011, to average 89.6 million barrels a day (see Figure 2). Increases in non-OECD consumption compensated for the declines in OECD consumption associated with lower economic growth and the debt crisis in Europe. In 2013, economic activity is assumed to pick up and world oil consumption is forecast to increase by 3 per cent to average 92.1 million barrels a day. Robust growth in non-OECD consumption is expected to offset moderate falls in OECD consumption. By the end of 2013, oil consumption in non-OECD economies is forecast to surpass OECD oil consumption. Beyond 2013, world economic growth is assumed to strengthen further. Over the outlook period 20142018, world oil consumption is projected to grow at a rate of 1 per cent a year, to reach 95.3 million barrels a day in 2018. Figure 3: Oil consumption in OECD and non-OECD economies
60 50 40 30 20 10 Mb/d
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
OECD
Non-OECD
Sources: BREE; IEA.
Oil consumption in Non-OECD economies

In 2012, consumption in non-OECD economies averaged 43.6 million barrels a day, up 3 per cent relative to 2011. In 2013, oil consumption in non-OECD economies is forecast to increase by 7 per cent, and to average 46.8 million barrels a day following an assumed improvement in economic growth. In the medium term, stronger assumed economic and population growth is projected to support additional oil demand in industrial production and transport. During 20142018, non-OECD oil consumption is projected to grow at a rate of 2 per cent a year, to average 51.7 million barrels a day in 2018. Most of the growth is projected to come from China that will contribute a third of the incremental consumption increase over the outlook period.
March 2013
Chinas oil consumption rose by 3 per cent in 2012, relative to 2011, to average 9.5 million barrels a day. The IEA reported that consumption of major oil products (except naphtha) increased in 2012 and that demand of motor gasoline and jet fuel kerosene increased substantially. In 2013, Chinas oil consumption is forecast to increase at a similar rate and average 9.9 million barrels a day with strong demand for naphtha, gas/diesel oil and motor gasoline. Despite being the worlds second largest oil consumer, Chinas per capita consumption of oil is around half of the world average. Economic growth in China is assumed to be robust over the medium term which will increase per capita incomes and support increased fuel demand in transport activities and a growing petrochemical sector. Between 2014 and 2018, Chinas oil consumption is projected to increase at an average annual rate of 3 per cent to total 11.5 million barrels a day in 2018. Oil consumption in India averaged 3.7 million barrels a day in 2012, up 4 per cent from 2011. Consumption growth in recent years has been supported by economic and population growth. Beyond 2012, Indias oil consumption is projected to increase by 3 per cent a year to average 4.3 million barrels a day by 2018. In 2012, oil consumption in the Middle East rose by 3 per cent, relative to 2011, to total 7.6 million barrels a day. The expansion of oil powered generation activity is likely to continue to support oil demand and the Middle Easts oil consumption is forecast to average 7.8 million barrels a day in 2013. Over the remainder of the outlook period, oil consumption in the Middle East is projected to grow at an average annual rate of 2 per cent per year to total 8.6 million barrels a day by 2018.
Oil consumption in OECD economies

Oil consumption in OECD economies averaged 46 million barrels a day in 2012, down by 1 per cent relative to 2011. Increased demand in the OECD Pacific, particularly Japan, offset lower consumption in the US and Europe. In the short to medium term, oil consumption is projected to be supported by continued oil-fired electricity generation demand in Japan as a result of the temporary shutdown of many of its nuclear power plants. Over the outlook period 20132018, OECD oil consumption is projected to decrease by 1 per cent a year to total 43.7 million barrels a day in 2018. Oil consumption in OECD-Europe has declined steadily since 2006, due to weak economic growth and on-going efficiency gains in the transport sector and the declining use of oil in electricity generation and heating. The declining demand trend is projected to continue over the outlook period. Short term falls in consumption are expected to be magnified by weak economic growth. In 2012, OECD-European oil consumption averaged 13.8 million barrels a day, down 4 per cent relative to 2011. In 2013, OECD-European oil consumption is forecast to contract further to total 13.6 million barrels a day. Between 2014 and 2018, oil consumption in OECD-Europe is projected to decrease at an average annual rate of 1 per cent, totalling 12.9 million barrels a day by 2018.
March 2013 21
Oil consumption in North America averaged 23.8 million barrels a day in 2012, down by 2 per cent from 2011. Lower oil consumption in the US, in particular, contributed to this decline. In 2013, oil consumption is projected to stay at a similar level, but over the remainder of the outlook period, oil consumption in North America is projected to fall by 1 per cent a year and to average 23 million barrels a day by 2018. Since late 2005, oil demand in the US has been on a structural decline. In 2012, the US oil consumption averaged 18.7 million barrels a day, decreasing by 2 per cent relative to 2011. Oil consumption is forecast to increase slightly in 2013 and 2014 as the result of increases in distillate and liquefied petroleum gas consumption. Between 2015 and 2018, oil consumption in the US is projected to decrease marginally to average 18.6 million barrels a day in 2018. Oil consumption in the Pacific region is projected to increase in the short term and decline over the medium term. Changes in oil consumption are expected as the result of changes in the energy mix in Japan, the largest oil consuming country in the Pacific region. In 2012 Japans oil consumption was 4.7 million barrels a day, which was an increase by 5 per cent from 2011. In 2013, a gradual recovery in the Japanese nuclear capacity is forecast to reduce oil demand by 4 per cent to average 4.5 million barrels a day. Over the period 20142018, Japans oil consumption is projected to decrease at an average annual rate of 2 per cent to total 4.1 million barrels a day by 2018. The factors influencing a decrease in demand in Japan include an improvement in fuel efficiency and the gradual replacement of high cost oil-fired electricity generation by natural gas.
World oil production

World oil production is estimated to have increased by 1 per cent, relative to 2011, to average 85.3 million barrels a day in 2012. Production from non-OPEC countries accounted for nearly 60 per cent of the total world oil production. In 2013, world oil production is forecast to average 86.1 million barrels a day, with non-OPEC countries production averaging 50.7 million barrels a day. Production from OPEC countries is forecast to average 35.4 million barrels a day in 2013, or an increase of 1 per cent relative to 2012. Over the remainder of the outlook period from 2014 to 2018, world oil production is projected to increase at an average annual rate of 1 per cent to reach 90.1 million barrels a day in 2018. The growth in world oil production is supported by projected increases in production from both OPEC and non-OPEC countries during this period, particularly unconventional oil production. In 2018, OPEC production is projected to be around 36.4 million barrels a day, largely supported by capacity increases in Iraq and Libya. Non-OPEC production is projected to grow at an average rate of 1 per cent a year over the outlook period 20142018 to average 53.8 million barrels a day in 2018.
March 2013
Figure 4: World oil supply in OPEC and non-OPEC economies

100 90 80 70 60 50 40 30 20 10 Mb/d 2003 2006 non-OPEC 2009 2012 2015 OPEC crude oil 2018
OPEC natural gas liquids
Sources: BREE; IEA.
Oil production in non-OPEC economies

In 2012, non-OPEC production is estimated to have increased by 1 per cent, relative to 2011, averaging 50.1 million barrels a day. Strong growth in oil shale and oil sand developments in North America supported the production increase and offset output decline in the North Sea fields due to unplanned outages and delayed start-up of several oil fields. In 2013, non-OPECs oil production is forecast to grow at a similar rate to 2012 and total 50.7 million barrels a day. The increase is due to rising unconventional supplies, mainly from the US light tight oil, Canadian oil sands, natural gas liquids, and a surge in deepwater oil production in Brazil. The production gains from the US, Canada and Brazil are forecast to contribute over 60 per cent of the incremental increase in non-OPEC production between 2012 and 2013. Over the outlook period 20142018, non-OPEC oil production is projected to grow at an average rate of 1 per cent per year to reach 53.8 million barrels a day in 2018. The US and Canada are expected to lead non-OPEC production growth in the medium term. From 2014 to 2018, North Americas oil production is projected to increase by 1.6 million barrels a day to total 20.8 million barrels a day in 2018. Latin America is projected to be the fastest growing region in term of oil production over the outlook period. From 2013 to 2018, Latin Americas oil production is projected to increase at an average annual rate of 4 per cent to total 5.4 million barrels a day by 2018. Brazil oil production is projected to contribute most of the growth in the region.
March 2013 23
Oil production in the US averaged 14.9 million barrels a day in 2012, increasing by 2 per cent relative to 2011. High oil prices and new technologies have made the extraction of oil and gas from shale rock commercially viable in recent years and contributed to the rise in production. US Oil production is forecast to continue to increase in 2013, by 2 per cent, relative to 2012, to total 15.1 million barrels a day. Over the remainder of the outlook period, US oil production is projected to grow at an average rate of 2 per cent a year. By 2018, US oil production is projected to be around 16.6 million barrels a day, an increase of 1.7 million barrels a day from the 2012 production level. Higher production volumes are primarily the result of increased onshore oil production, predominantly from tight (very low permeability) formations. Over the longer term, the IEA projects that the US will surpass Saudi Arabia to become the worlds biggest oil producer by 2020. Canadas oil production has grown robustly in recent years. Production growth is supported by a rebound in oil sands production activity, increases in the levels of domestic and foreign investment, and the successful application of horizontal drilling and multi-stage hydraulic fracturing methods. In 2012, oil production in Canada was around 3.6 million barrels a day, with oil sands production accounting for just under half of this amount. In 2013, Canadas oil production is set to rise further to total 3.7 million barrels a day as the result of production from Hibernia, Terra Nova, and White Rose fields. Towards 2018, Canadas oil production is projected to increase at an average rate of 3 per cent a year to total 4.2 million barrels a day in 2018. The Hebron field, scheduled to begin production in 2017, will offset declining production from the Newfoundland and Labrador offshore fields. Brazils oil production is forecast to increase by 7 per cent in 2013, relative to 2012, to reach 2.5 million barrels a day. Crude output growth is supported by the addition of the FPSO Cidade de Anchieta at the Parque das Baleias group of fields and the start of production from Sapinhoa and Roncadors P-55 platform on the assumption that the Frade field will not restart until late 2013. Most of the growth in Brazils oil production is driven by the development of deepwater discoveries in the Campos and Santos basins, located off its southeast coast. In the medium term, Brazil is set to become the fastest-growing oil producer outside the Middle East. Over the outlook period 20142018, Brazils oil production is projected to grow at an average annual rate of 7 per cent, reaching 3.6 million barrels a day in 2018. Production increases will be underpinned by the installation of additional production systems in several offshore oil fields including Baleia Azul, Guara North, Cernambi, Lula Central, Lula High and Maromba. After reaching a record level of production in 2011, Russias oil production fell by 1 per cent to average 10.5 million barrels a day in 2012. In 2013, oil production is forecast to decline further to average 10.4 million barrels a day. In the medium term, production from maturing fields is projected to fall and will more than offset the increases in production from new fields. Although new fields are still being developed, the rate of growth is likely to be slow because these fields are often located in remote areas. Between 2014 and 2018, Russias oil production is projected to fall steadily at a rate of 1 per cent a year to average 10 million barrels a day in 2018.
March 2013
Oil production in OPEC economies

OPEC oil production was 35.2 million barrels a day in 2012, an increase of 1 per cent, relative to 2011, supported by increased output from Saudi Arabia, Angola, Algeria and Libya. These increases offset the decline in Nigerias production because of severe flooding in November 2012 and a fall in Irans production. In 2013, OPEC oil production is forecast to grow at a similar rate to average 35.4 million barrels a day. In the medium term, OPEC member countries continue to invest in refining, transportation, exploration and development activities intended to support oil market stability. Over the outlook period 20142018, OPEC production is projected to grow at an average rate of 1 per cent a year to reach 36.4 million barrels a day in 2018. Nearly half of the production increase is projected to come from natural gas liquids (NGLs), with crude oil and Venezuelan extra-heavy oil accounting for another 30 and 20 per cent, respectively, of the additional supply. The projected growth in OPEC production will primarily come from the Middle East, predominantly Iraq. Iraq production is forecast to grow robustly by 8 per cent, relative to 2012, to total 3.1 million barrels a day in 2013. In the medium term, Iraq is likely to lead the growth in the Middle East production. Between 2014 and 2018, oil production from Iraq is projected to grow at an average annual rate of 8 per cent to be about 4.6 million barrels a day in 2018. The Middle East is projected to dominate oil production of OPEC over the outlook period, accounting for about 75 per cent of total OPEC production by 2018. Outside the Middle East, production is expected to rise in all member countries with the exception of Angola and Ecuador. Oil production in Saudi Arabia is forecast to remain at an average of 11 million barrels a day in 2013, due to lower output from maturing fields. An increase in production in 2014 will be underpinned by the commencement of the Manifa offshore field ahead of schedule in 2014. In the medium term, production growth is assumed to be constrained by resource depletion. Over the remainder of the outlook period, production in Saudi Arabia is projected to decline steadily by 1 per cent a year. By 2018, oil production in Saudi Arabia is projected to average 10.7 million barrels a day. In 2012, Irans oil production dropped well below its 2011 production level of 4.2 million barrels a day as a result of international oil sanctions imposed on Irans oil exports. Latest Irans oil supply is estimated to average 2.7 million barrels a day. In 2013, oil production from Iran is projected to fall further as a result of the USs additional financial sanctions which began in February 2013. Between 2013 and 2018, Irans oil production is projected to decrease by 7 per cent a year to average 1.8 million barrels a day by 2018 on the assumption that sanctions imposed on Iran remain in place during the outlook period.
March 2013 25
Libyas oil production has rapidly recovered after the end of the 2011 civil war although production has still not yet reached the pre-war level. The IEA reported that Libyan oil supply in recent months averaged around 1.4 million barrels a day, and output is expected to reach about 1.6 million barrels a day in 2012, slightly below the 1.7 million barrels a day produced in 2010. During the outlook period 2013 to 2018, Libyas oil production is projected to remain relatively flat at the 2012 production level. Oil production from the United Arab Emirates is expected to remain relatively stable at 3.3 million barrels a day over the outlook period as the government has delayed a plan to increase its crude oil capacity to 3.5 million barrels a day in 2014 to 2018.
Australian production and exports

Australias production of crude oil and condensate is estimated to have decreased by 9 per cent in 201112, relative to 201011, to total 22.4 gigalitres. Lower production is the result of planned maintenance on the North West Shelf, multiple unplanned shut-ins throughout the Carnarvon Basin during cyclone season, and declines in production from maturing fields. Output from the Kitan project in the Bonaparte Basin, which commenced in October 2011, partially offset this decline. In 201213, Australias crude oil and condensate production is forecast to increase by 3 per cent, relative to 201112, as a result of the commencement of crude production from the Montara-Skua project and condensate from the Kipper gas project. Over the period from 201314 to 201516, Australian production of crude oil and condensate is projected to decrease at an average annual rate of 7 per cent. Declining production from maturing fields is projected to more than offset new production from several small fields including Coniston, Fletcher-Finucan, Turrum, Crux and Balnaves in 201415 and 201516. In 201617 and 201718, Australias crude oil and condensate production is projected to rebound to 25.8 and 24.5 gigalitres, underpinned by condensate production associated with the Prelude and Ichthys projects. Beyond 2018, higher Australian oil production maybe supported by production from shale oil resources from the Arckaringa Basin surrounding Coober Pedy, although the start date for production and size of the resources remain unclear.
March 2013
In 201112, Australias exports of crude oil and condensate decreased by 2 per cent to 19.2 gigalitres, relative to 201011 (see Figure 5). Despite the fall in the export volume, the value of Australias crude oil and condensate exports increased by 5 per cent to $13.6 billion (in 201213 dollars) in 201112. Australias exports of crude oil and condensate are forecast to increase by 13 per cent in 201213, with the export value increasing by 5 per cent, relative to 201011. From 201314 onwards to 201516, crude oil and condensate exports are projected to fall by 2 per cent per year to total 19.2 gigalitres in 201516. Australias crude oil and condensate exports are projected to rebound to 23.6 and 22.4 gigalitres in 201617 and 201718. In value terms, Australias crude oil and condensate export earnings were about $13.6 billion (in 201213 prices) in 201112, an increase of 5 per cent relative to 201011. Between 201213 and 201516, the real value of Australian crude oil and condensate exports are projected to decline by an average of 6 per cent a year, as a result of projected lower export volumes (see Figure 5). Export earnings are projected to rebound to total $14.5 billion in 201617 and $13.4 billion in 201718 (in 201213 dollars), supported by exports from the Prelude and Ichthys projects. Figure 5:
25 20 15 10 5 GL 2001-02 2005-06 volume 2009-10 2013-14 value (right axis) 2017-18
Australian crude oil and condensate exports

15 12 9 6 3 2012 13 A$b
Sources: BREE; ABS
March 2013 27
Table 1:
World
Oil outlook
unit 2011 84.5 88.8 95 98 110 114 2010 11 ML ML A$m A$m ML ML ML A$m A$m ML ML ML ML 24 745 19 638 12 245 12 887 32 225 3 907 2 471 1 068 1 124 38 393 760 18 762 52 095 2012 85.3 89.6 93 95 110 112 2011 12 22 408 i 19 212 13 205 13 588 29 495 3 652 2 115 971 1 000 36 081 1 151 22 194 53 797 2013 f 86.1 92.1 94 94 107 107 2012 13 f 22 988 21 770 14 308 14 308 31 164 4 922 2 365 1 113 1 113 35 163 1 104 25 091 55 944 2014 z 86.9 92.8 85 84 107 106 2013 14 z 24 031 20 075 14 790 14 373 27 168 4 117 2 280 1 122 1 090 32 966 1 059 29 569 57 386 2015 z 87.7 93.4 86 85 109 107 2014 15 z 22 022 18 397 13 761 12 996 27 584 3 773 2 090 1 043 985 33 049 1 082 30 581 58 712 2016 z 88.5 94.0 87 85 111 107 2015 16 z 20 940 19 163 13 113 12 036 29 517 3 588 1 987 994 913 33 131 1 084 32 028 60 078 2017 z 89.3 94.7 88 84 112 107 2016 17 z 25 769 23 583 16 293 14 532 29 193 4 415 2 445 1 235 1 102 33 214 1 087 33 631 61 478 2018 z 90.1 95.3 89 84 113 106 2017 18 z 24 481 22 404 15 478 13 417 29 302 4 415 2 445 1 235 1 071 33 214 1 087 35 367 62 929
Production b mbd Consumption mbd West Texas Intermediate crude oil price nominal US$/bbl real c US$/bbl Brent crude oil price nominal US$/bbl real c US$/bbl
Crude oil and condensate Production b Export volume Export value nominal real d Imports LPG Production e Export volume Export value nominal real d Petroleum products Refinery production Exports g Imports Consumption h
Australia
b One megalitre a year equals about 17.2 barrels a day. c In 2013 US dollars. d In 201213 Australian dollars. e Primary products sold as LPG. g Excludes LPG. h Domestic sales of marketable products. i Energy Quest. f BREE forecast. z BREE projection. Sources: BREE; ABARES; Australian Bureau of Statistics; International Energy Agency; Energy Information Administration (US Department of Energy); Energy Quest; Geoscience Australia.
March 2013
Gas
Pam Pham, Nhu Che and Tom Willcock
World gas consumption

Global gas consumption has grown rapidly over the past two decades, increasing at an average annual rate of 2.6 per cent from 2500 billion cubic metres in 2000 to 3400 billion cubic metres in 2011. This growth is projected to continue at an average annual rate of around 1.8 per cent over the medium term, to reach a total level of annual consumption of 3800 billion cubic metres in 2018 (see Figure 1). The attractiveness of gas fired electricity generation has been a key contributing factor to increased global demand. First, improved identification and extraction technologies have dramatically increased and reduced the cost of gas in key markets, such as the US. Second, the faster ramp-up speeds of gas powered plants allows them to respond quickly to peak demand, an increasingly desirable property for electricity grids. Third, gas is a relatively low emission technology relative to other fossil fuels. Future gas demand is expected to be supported by growth in consumption in non-OECD economies that is projected to grow at 2.8 per cent annually to 2018. China underpins a large proportion of the rising demand with 12 per cent gas growth per annum. This will more than double Chinas gas demand from 123 billion cubic metres in 2011 to 275 billion cubic metres in 2018. Gas consumption in India, Africa and the Middle East will grow substantially at about 3 per cent per annum. Demand growth from OECD nations is expected to develop more moderately, or around 0.7 per cent per year, over the same time period. Falling European demand, a result of strong competition from renewables and assumed weak economic growth, will be offset by increased American and OECD-Asian growth, primarily from electricity generation. Figure 1: World gas consumption
2500 2000 1500 1000 500 0 OECD Non-OECD 2010 EU-27 2012 China 2014 United States 2016 Russia 2018 Japan
Source: BREE; IEA.
March 2013 29
Global LNG trade

World gas production is concentrated in the Former Soviet Union, North America and the Middle East. Gas consumption, however, occurs in many regions. Projected increases in global gas consumption, production in a few key locations and associated regional price disparities are projected to underpin an expansion of global gas trade. The current global capacity for LNG trade is around 288 million tonnes per year. Qatar has the largest LNG export capacity of 77 million tonnes per year and accounts for about 27 per cent of the global capacity, followed by Indonesia which has some 13 per cent of the global capacity. Australia is currently ranked third in terms of LNG export capacity. Australias current export capacity of LNG is about 24 million tonnes per year, and represented 8 per cent of global LNG exports. Australian LNG is mainly delivered to Japan, South Korea, China, Chinese Taipei and India. These markets accounted for about 64 per cent of world LNG imports in 2011. Investment in inter- and intra-regional transport capacity will facilitate trade and enable greater gas consumption, particularly in Asia. Greater transport capacity will take the form of additional pipelines and the construction of LNG liquefaction and regasification terminals. In 2011, world LNG trade totalled 241 million tonnes, and represented an increase of about 10 per cent relative to 2010. The Asia-Pacific region, which accounted for about 64 per cent of total world LNG imports, largely contributed to this growth (see Figure 2). In 2011, LNG imports in the Asia-Pacific region increased by 17 per cent, relative to 2010, to total 168 million tonnes. The recent growth of LNG imports to the Asia-Pacific region has, in part, been driven by increased gas demand for power generation in Japan, the largest LNG importer in the world, following the closures of most of its major nuclear facilities after the March 2011 earthquakes. Rapid growth in gas consumption in China has, in part, been met by LNG imports which has also contributed to the growth in the Asia-Pacific region.
March 2013
Figure 2: LNG imports in 2011, by region

Middle East Americas Europe 1% 8% 27%
Asia-Paci c 64%
Source: IEA.
LNG imports in the Asia-Pacific have grown rapidly at an average rate of 7 per cent per year over the period 2000-2011. In 2012, the Asia-Pacifics LNG imports are estimated to have increased by 10 per cent, relative to 2011, and totalled around 185 million tonnes, with the largest increase being LNG imports into India and China (see Figure 3). Over the medium term, LNG trade is expected to comprise an increasing proportion of the global gas trade, as it can be transported over longer distances and allows for a greater diversification of supply compared with gas transported through pipelines. Overall, LNG imports into the Asia-Pacific are forecast to increase by 9 per cent in 2013 and to total 200 million tonnes, underpinned by demand for gas-fired electricity generation and higher industrial and residential consumption in existing and emerging LNG importing economies. Over the medium term, gas is expected to play a greater role in the power generation, as well as the residential and industrial sectors, and to eventually replace high cost fired-oil electricity generation. Between 2014 and 2018, the growth of LNG imports in the AsiaPacific are projected to slow but still grow at a robust average rate of 7 per cent per year to reach 272 million tonnes in 2018.
March 2013 31
Figure 3: LNG imports into the Asia-Pacific

140 120 100 80 60 40 20 Mt 2011 2012 Japan 2013 South Korea 2014 2015 China 2016 India 2017 Chinese Taipei 2018
Source: BREE, IEA, Platts.
Japan is currently the largest LNG importer in the world. In the absence of domestic gas production and international pipelines, Japan is completely reliant on LNG imports to meet domestic consumption requirements. In 2011, Japan remained the largest LNG importer in the world, with a volume of LNG imports of around 86 million tonnes. In 2012 Japans imports of LNG are estimated to be about 87 million tonnes, an increase of 2 per cent relative to 2011. Robust growth in LNG imports has followed the closure of most of Japans nuclear reactors caused by the March 2011 earthquakes and tsunami (as gas is a substitute for power generation). Although two reactors in Fukui Prefecture were restarted in 2012, 48 of Japans nuclear reactors still remain switched off, subject to safety testing. Until the safe start up of its nuclear plants, higher consumption of LNG growth is anticipated to continue. Over the outlook period 2013-18, Japans LNG imports are projected to increase at an average rate of 8 per cent per year to total 122 million tonnes by 2018. The Republic of Korea is the second largest LNG importer in the world and, like Japan, its gas consists entirely of LNG imports. In 2012, its LNG imports are reported to be around 36 million tonnes, down by 1 per cent from 2011. The Republic of Koreas LNG imports are forecast to increase by 6 per cent in 2013 to reach 38 million tonnes. The growth is underpinned by a rise in gas use for electricity generation and growing consumption of residential and commercial gas. Gas is also expected to continue to play a critical role in peak load electricity generation. Between 2014 and 2018, Koreas LNG imports are projected to increase by an average of 5 per cent annually and to total 49 million tonnes in 2018.
March 2013
China only started importing LNG in the past decade, but its LNG imports have grown rapidly. In 2011, China was the worlds fifth largest LNG importer, by volume. Chinas LNG imports are reported to have increased by 30 per cent between 2011 and 2012, reaching 29 million tonnes in 2012. The growth in Chinas LNG imports is expected to moderate as a result of the natural gas pipeline linking Myanmar with China in 2013. The pipeline runs from Kyaukpyu in Myanmar to Yunnan province in China with a capacity of 12 billion cubic metres per year. Despite this, Chinas LNG imports are set to continue rising in 2013, by a robust 10 per cent, to reach 32 million tonnes. The Chinese government is focused on developing domestic its gas supply to meet rising demand for gas consumption in the industrial, residential, and power, gas and water sectors. A large proportion of this demand is likely to be met by increasing imports through an extensive network of national and regional gas pipelines, with the total capacity of the main pipeline network exceeding 100 billion cubic metres per year. Over the remainder of the outlook period (2014 to 2018), Chinas LNG imports are projected to grow at an average annual rate of 6 per cent to total 46 million tonnes in 2018. Indias LNG imports have increased at an average rate of 8 per cent per year over the period 2006-2011, underpinned by rising gas consumption in the electricity, industrial and residential sectors. In 2012, Indias LNG imports were estimated to be about 19 million tonnes. Rising demand for gas use will need to be met by both increased domestic production and imports. While India is expanding pipeline capacity over the medium term, LNG imports are forecast to supplement supply in the short term. In 2013, India is projected to add an additional 7.5 million tonnes to the total volume of LNG imports. Over the outlook period (2014-18), Indias LNG imports are projected to increase at an average rate of 4 per cent per year to reach 31 million tonnes in 2018. Chinese Taipeis LNG imports are reported to be around 13 million tonnes in 2012, up by 7 per cent from about 12 million tonnes in 2011. Demand for LNG in Chinese Taipei is projected to increase over the medium term. Increasing gas-fired electricity generation capacity is assumed to meet most of the expected increase in electricity demand. Uncertainty in the nuclear sector, where the 2.7 GW Lungmen plant has experienced a number of delays and public opposition, will likely support gas imports in the short to medium term. From 2013, Chinese Taipei will be entitled, under contract, to an additional 1.5 million tonnes of LNG a year from Qatar. Total imports into Chinese Taipei in 2013 are projected to increase by 12 per cent, totalling 14 million tonnes. Between 2014 and 2018, additional demand for gas will be supported by increased electricity generation demand. Over the outlook, LNG imports into Chinese Taipei are projected to increase by 4 per cent a year to reach 16 million tonnes in 2018. Imports into the Asia-Pacific region are expected to be further supported by growing demand from Asian economies, particularly LNG projects in Malaysia, Singapore, the Philippines and Indonesia. These projects are expected to add an additional 8 million tonnes per year into the Asia-Pacific region LNG import capacity from 2015.
March 2013 33
World gas and LNG production

Global gas supply typically correlates closely to global demand with some fluctuations due to a change in stocks. The global gas supply increased from 2500 billion cubic metres in 2000 to 3400 billion cubic metres in 2011. Much of this growth has come from the Middle East, the Former Soviet Union, China and the United States. According to the International Energy Agency (IEA) the bulk of future growth in gas supply will come from these areas as well as Australia and Africa. Global gas supply is forecast to be 3800 billion cubic metres in 2018. The largest two producers in 2018, as in 2012, will be the United States and Russia with production of 728 and 686 billion cubic metres, respectively. Countries with the highest growth rates, in terms of production from 2012 to 2018, include Australia, Brazil, China, Iraq, Nigeria, Saudi Arabia, Turkmenistan and Qatar. Global LNG supply is, in part, determined by the cost of liquefying and transporting natural gas. Australia exports more than half of its extracted gas due to relatively low domestic demand and the higher prices available overseas. Countries with larger domestic gas demand, the US for example, have not been an active participant in the LNG market. Other large suppliers with extensive land borders, such as the Russian Federation, have focused their exports via pipelines to consumers and given less emphasis to the LNG trade. Australia is the most important country globally in terms of LNG capacity under construction with around 60 million tonnes of liquefaction capacity to come online by 2017. Other countries with LNG liquefaction projects under construction in 2013 include Algeria, Angola, Papua New Guinea and Indonesia. Over the longer term Australia, Russian Federation, Nigeria, Canada and the US all have a significant number of large LNG projects at the planning stage. Gas supply growth from North America will have a profound effect on global LNG flows. Traditionally a gas importer, the US is currently the worlds largest consumer of gas. However, a trend of decreasing gas imports over the past decade has recently changed because a large number of unconventional gas resources have begun to be exploited. If this supply growth continues over the medium term it could turn North America into a sizeable LNG exporter. Projects once planned for regasification (LNG import) are currently being redesigned for liquefaction (LNG export). The US low gas price as defined by the Henry Hub benchmark, combined with rapid growth in demand from East Asia and relatively high prices are likely to result in considerable LNG exports from North America to the region. The knock-on effect of this additional supply will be increased competition for other Asia-Pacific producers, notably Australia, and lower landed gas prices in the leading LNG importing countries.
March 2013
Figure 4: World gas production

800 700 600 500 400 300 200 100 bcm EU-27 United States 2010 2012 Australia 2014 Middle East 2016 Russia 2018 China
Source: BREE; IEA.
Australian gas production

In 201112, Australian gas production was about 51 billion cubic metres, including production from the newly commenced Bass Gas (Yolla Mid Life Enhancement) in the Bass Strait. In 2013, a number of new projects and expansions are expected including Macedon (WA) and North Rankin (WA). In 201213, Australias gas production is forecast to increase by 20 per cent to 61 billion cubic metres. Increases in production are expected to be underpinned by the commissioning of a number of new fields. In 2014, the major projects expected to commence are the Surat Gas Project and Queensland Curtis LNG in Queensland. These projects are expected to underpin an additional 17 per cent increase in Australian gas production in 201314 to total 71 billion cubic metres. Over the remainder of the outlook period (201415 to 201718), Australias gas production is projected to increase at an average annual rate of 11 per cent and to reach 135 billion cubic metres by 201718. Increased gas production is projected to be facilitated by new LNG capacity as well as demand for gas from the electricity generation, industrial and residential sectors. Between 2015 and 2018, a number of major projects will commence and will contribute significantly to Australian gas production and exports (see Table 2). A substantial portion of Australias investment pipeline is comprised of LNG projects at both the Feasibility and Committed Stages. Development costs for new LNG projects in Australia have increased substantially.
March 2013 35
Australian LNG exports

Australias LNG exports are estimated to be about 19 million tonnes in 201112, or some 4 per cent lower than 201011. This decline is due to maintenance at the North West Shelf LNG plant in the second half of 2011 and at the Darwin LNG plant in the second quarter of 2012. Australian exports of LNG are forecast to increase significantly by 26 per cent in 201213 to total 24 million tonnes. In 201314, Australian exports are forecast to increase by a further 4 per cent to total 25 million tonnes as the result of production at the Pluto facility being scaled up towards capacity. Over the remainder of the outlook period (201415 to 201718), Australian exports of LNG are projected to increase at an average rate of 36 per cent a year to reach 88 million tonnes in 201718 (see Figure 4). Projected increases in export volumes are expected to be underpinned by the commissioning of several LNG projects that are currently under construction, as shown in Table 2. Figure 5: Australias LNG exports
100 80 60 40 20 Mt 2002-03 2005-06 2008-09 exports 2011-12 value (righ axis) 2014-15 2017-18 60 48 36 24 12 2012 13 $b
Source: BREE; ABS
LNG prices under long-term contracts in the Asia-Pacific are generally linked to the price of oil. During the medium term outlook, higher forecast oil prices are expected to support higher LNG prices. Increasing LNG prices, combined with increasing export volumes, are forecast to underpin growth of Australian LNG export earnings significantly during the medium term outlook. In 201213, the value of Australian LNG exports is forecast to total $16.3 billion. Between 201314 and 201718, Australias export earnings are projected to increase by an average of 31 per cent a year to total $52.8 billion (in 201213 dollars) in 201718. Increases in export earnings are the results of projected significant increases in Australian export volumes and projected higher LNG prices over the outlook period from 201213 to 201718.
March 2013
Table 1:
Gas outlook
unit Gm3 Mt A$m A$m 2010 11 53.1 20.0 10 437 10 984 2011 12 50.5 19.3 11 949 12 296 2012 13 f 60.8 24.3 16 199 16 199 2013 14 z 71.3 25.2 17 944 17 438 2014 15 z 96.2 33.1 23 471 22 167 2015 16 z 115.2 62.8 43 592 40 009 2016 17 z 124.5 71.7 49 678 44 310 2017 18 z 134.5 87.9 60 953 52 835
Australia
Production LNG export volume LNG export value nominal real b
b In 201213 Australian dollars. f BREE forecast. z BREE projection. Sources: BREE; ABARES; Geoscience Australia.
Table 2:
Project Australia Pacific LNG
Committed Australian gas and LNG projects

State Qld Location Gladstone Gladstone Barrow Island Carnarvon Basin Type new project new project new project expansion Estimated Start Up 2016 2015 2015 2016 Estimated New Capacity 9 Mt 7.8 Mt 15 Mt n/a Indicative Cost Estimate $m 23000 18000 43000 2300
Gladstone LNG Qld Gorgon LNG Greater Western Flank - Phase 1 Ichthys LNG Julimar Development Project Kipper Gas Project (stage 1) Macedon NWS North Rankin B Prelude Floating LNG Queensland Curtis LNG project Spar Turrum Wheatstone LNG
Source: BREE.
WA WA
NT WA
Darwin 180 km NW of Dampier 42 km offshore Gippsland 100 km W of Onslow 150 km NW of Dampier Browse Basin Gladstone
new project new project
2017 2016
8.4 Mt 1.65 Mt
33000 1200
VIC
new project
2016
30 PJ pa
1700
WA WA WA Qld
new project expansion new project new project
2013 2013 2016 2014
75 PJ pa 967 PJ pa 3.6 Mt 8.5 Mt
1470 5000 12600 19800
WA VIC WA
120 km N of Onslow Bass Strait 145 km NW of Dampier
new project new project new project
2013 2013 2016
18 PJ pa 11 kbpd, 77 PJ pa 8.9 Mt
117 2600 29000
March 2013 37
Thermal coal
Tom Shael and John Barber
Prices
In 2012, increased competition in key Asia-Pacific markets from suppliers in the US and Colombia led to lower coal spot prices. The Newcastle thermal coal price (FOB) averaged US$94 a tonne, a 22 per cent decrease relative to 2011. Prices reached a low of US$78 a tonne in October, but recovered to around US$91 by December 2012 due to Chinese buyers increasing purchases of cheaper foreign coal. The 2012 Japanese Financial Year (JFY, April 2012 to March 2013) benchmark contract price settled at US$115 a tonne, 15 per cent lower than the previous JFY contract. The JFY 2013 benchmark contract price is forecast to settle 14 per cent lower than the JFY 2012 benchmark at around US$99 a tonne. The decline is expected as a result of lower spot prices over the past 6 months and the expectation that spot prices will stay around current levels for the remainder of 2013. Thermal coal consumption demand is forecast to increase in 2013, but competition to supply seaborne trade markets is expected to limit the prospects of higher prices during the 2013. In the medium term, thermal coal prices (in JFY 2013 dollars) are projected to increase slightly in the short term, before decreasing later in the outlook period when large additions to supply are projected to come online. Consumption demand in key markets is projected to grow substantially over the next five years, but strong competition among coal producers is expected to moderate any price growth. In JFY 2013 US dollars, thermal coal contract prices are projected to peak in JFY 2015 at US$102 a tonne, before decreasing to US$90 in JFY 2018. Figure 1: JFY thermal coal prices
140 120 100 80 60 40 20 JFY 2013 US$/t 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Sources BREE.
March 2013
World thermal coal imports

World thermal coal trade is estimated to have increased by 11 per cent in 2012, relative to 2011, to total 958 million tonnes. Increased consumption demand in non-OECD economies, particularly China and India, was the primary driver of the increase in trade. In China, lower thermal coal prices in 2012 made imports more commercially viable than domestic production sourced from some inland areas of the country. Over the outlook period both world thermal coal consumption and trade are projected to increase, underpinned by robust energy demand growth in emerging economies. The low-cost and reliability of coal-fired electricity generation, as well abundance of fuel, will continue to make it appealing to emerging economies looking for cost-effective ways to meet rapid increases in energy demand. The New Policies Scenario in the IEA World Energy Outlook 2012 projects world coal consumption will increase from 4963 million tonnes of coal equivalent in 2010 to around 5831 million tonnes of coal equivalent in 2020. The projected increase in energy consumption from coal is the largest of all fuel sources analysed in the New Policies Scenario, including gas. Figure 2: Major thermal coal importers
1000 900 800 700 600 500 400 300 200 100 Mt 1998 2000 Europe 2002 2004 Japan 2006 2008 2010 2012 2014 India 2016 China 2018 Republic of Korea
Sources: BREE; IEA.
China
In China, sustained growth in electricity demand, infrastructure constraints and the relatively low cost of overseas coal supported substantially higher demand for thermal coal imports in 2012. Chinas thermal coal imports are estimated to have totalled 210 million tonnes in 2012. Thermal coal imports are forecast to increase in 2013, albeit at a lower rate compared with the growth in 2012, to total 228 million tonnes. The growth is forecast as a result of the continued availability of relatively cheap imported coal in the Asia-Pacific market.
March 2013 39
In the medium term, growth in Chinas coal consumption is projected to moderate. Climate change policies, such as the recently proposed carbon price, and energy targets are assessed as having more effect on coal consumption in the later years of the outlook period, but will not reduce Chinas overall coal consumption from current levels. Coal is expected to continue to have a large, but declining, share of Chinas energy mix in 2018, with the share of gas, nuclear and renewables growing over the period. Energy conservation targets announced by the State Council in February 2013 are not expected to cause a decline in coal consumption. The targets, which are based on tonnes of coal equivalent, rather than tonnes of coal by weight, still allow for growth in both total primary energy and also electricity consumption. Energy targets in previous Five-Year Plans have been exceeded by considerable margins and BREE assesses that the most recently announced target would require a substantial, and highly unlikely, decrease in assumed economic growth. China is expected to remain by far the worlds largest producer of coal over the outlook period, but to become more reliant on imports to meet its requirements. Rising domestic production costs associated with increased safety regulations, transport system development and increasing transport distances from new mines to customers are expected to make cheaper imports more appealing to Chinas coal-fired power plants. After the estimated large surge in imports in 2012, growth in Chinas thermal coal imports is projected to moderate to an average annual rate of 3 per cent over 2013 to 2018, and to total 257 million tonnes in 2018.
India
In 2012, Indias thermal coal imports are estimated to have increased by 17 per cent, relative to 2011, to total 101 million tonnes. Indias thermal coal consumption is projected to increase substantially over the outlook period, underpinned by planned expansions to the countrys coal-fired electricity generation capacity. India currently has around 210 gigawatts of coalfired electricity generating capacity which provides around 56 per cent of its electricity requirements. By 2018 this capacity is projected to increase 55 per cent to around 330 gigawatts to meet the increasing electricity demands of Indias growing middle class and manufacturing industries. While India is the worlds third largest producer of coal, growth in domestic production over the outlook period is not projected to be sufficient to meet increasing consumption demand. Recently announced investment plans to unlock substantial coal resources in Odisha, Jharkhand, and Chhattisgarh are not expected to be developed by 2018 given the difficulty associated with acquiring land in India and the lengthy approval process for the development of new mines and infrastructure networks. Accordingly, imports of thermal coal in India are projected to grow at an average annual rate of 11 per cent and to total 185 million tonnes in 2018.
March 2013
Japan
In 2012, Japans imports of thermal coal are estimated to have totalled 133 million tonnes, around 9 per cent higher than in 2011. Japans nuclear power industry remains mostly offline and gas and oil have been the primary substitutes for nuclear in the countrys energy mix. Infrastructure constraints for the importation of coal are expected to continue limiting the prospects for growth in Japans thermal coal consumption and imports. In 2013, imports of thermal coal are forecast to total around 130 million tonnes. Over the outlook period, thermal coal imports are projected to decline by less than 1 per cent a year and to total 127 million tonnes in 2018.
Republic of Korea
In 2012 the Republic of Koreas thermal coal imports are estimated to have totalled 95 million tonnes, a slight decrease from 2011. In 2013, continued expansion of the countrys coal-fired electricity generation capacity is forecast to support thermal coal imports growing by 3 per cent to total 98 million tonnes. Over the medium term, the Republic of Koreas coal-fired electricity generation capacity is expected to increase by a further 2000 megawatts. The new capacity is projected to support thermal coal imports increasing at an average annual growth rate of 4 per cent and to total 117 million tonnes in 2018.
European Union
Imports in to EU in 2012 are estimated to have increased by 5 per cent, relative to 2011, to total 173 million tonnes. The increase is a result of estimated higher imports into the UK, Italy and Spain, compared with 2011. Over the period 2013 to 2018, imports into the EU are projected to remain stable at around 166 million tonnes a year.
World thermal coal exports

Over the outlook period increased world demand for thermal coal is projected to be met by higher exports from countries that already export substantial quantities of thermal coal including Australia, Indonesia, Colombia and South Africa (see Figure 3). Competition between these exporters is expected to increase because all exporters have plans to expand mine and infrastructure capacities.
Australia
Thermal coal exports from Australia are estimated to have increased 16 per cent in 2012 to total 171 million tonnes. Japan remained the principal destination for Australias thermal coal exports and imported 75 million tonnes of Australian coal, 15 per cent higher than its 2011 imports. Exports to China increased by 73 per cent to total 34 million tonnes, and accounted for the largest share of additional export volumes. Exports to the Republic of Korea increased by 2 per cent, relative to 2011, to total 30 million tonnes.
March 2013 41
In 2013, Australias thermal coal exports are forecast to increase by 11 per cent, relative to 2012, to total 189 million tonnes. The increase is forecast to be supported by the start-up of recently completed projects, such as Rio Tinto and Mitsubishis Hunter Valley Operations Expansion, stage two of Whitehaven Coals Narrabri Coal Project and BHP Billitons Mount Arthur project. China is forecast to be the main source of growth in export volumes, but Japan is still expected to remain the principal export market for Australian producers. Figure 3:
1000 900 800 700 600 500 400 300 200 100 Mt 1998 2000 South Africa 2002 2004 Colombia 2006 2008 2010 2012 2014 2016 2018
Major thermal coal exporters
Russian Federation
Australia
Indonesia
Sources: BREE; IEA.
A slowing in new coal mine investment that has occurred over the past 18 months is expected to slow the rate of growth in Australias thermal coal exports between 2013 and 2016. Although there remains a large number of planned coal mining projects in Australia, rising construction and operating costs have reduced the financial viability of many projects. Recently, many Australian coal producers have been targeting efficiency and cost cutting programs in response to lower received prices and deferred decisions on new mines and/or expansion programs. Expected foreign direct investment in greenfield developments in Queenslands Galilee Basin could lead to the opening of a series of new and very large mines later in the outlook period. Such projects could include GVK-Hancocks Alpha mine (annual capacity of 30 million tonnes), Adanis Carmichael mine (60 million tonnes) and Waratah Coals China First coal project (40 million tonnes). Over the outlook period, Australias thermal coal exports are projected to increase to 315 million tonnes by 2018, supported by robust growth in exports to both India and China. By 2018, both India and China are expected to overtake Japan as Australias leading thermal coal export markets.
March 2013
Indonesia
Indonesias exports of thermal coal are estimated to have increased by 2 per cent in 2012, relative to 2011, to total 315 million tonnes. In 2013, Indonesias exports of thermal coal are forecast to increase by a further 6 per cent to total 335 million tonnes, supported by robust world import demand. Over the medium term, Indonesias domestic reservation policy to ensure coal supply to electricity generators, the lower quality of domestic coal compared with other world suppliers and higher transport costs from new mines that will be located further inland are expected to result in Indonesias exports growing at a slower rate than in previous years. Over the outlook period, Indonesias exports are projected to grow at an annual rate of around 2 per cent, and to total 361 million tonnes in 2018.
The US
Exports from the US in 2012 are estimated to have increased by 47 per cent, relative to 2011 and to total 50 million tonnes. The second consecutive year of a marked increase in exports is a result of much lower natural gas prices due to large increases in unconventional gas production. Low gas prices have led to a substitution away from coal in domestic electricity generation, with displaced coal production being exported. However, higher production costs and transportation issues make the large-scale exportation of thermal coal unsustainable beyond the short term. As a result, over the medium term exports from the US are projected to decline to total around 23 million tonnes in 2018, having peaked at 55 million tonnes in 2013.
Colombia
Colombias thermal coal exports are estimated to have not grown in 2012, staying around 76 million tonnes, due to labour disputes and lower demand in North America. In 2013, Colombias thermal coal exports are forecast to return to growth and to total around 79 million tonnes. However, recent strikes at the Cerrejn coal mine in north Colombia and a one month operating suspension at Drummonds coal port near Santa Marta in February 2013 will limit growth. In the medium term, Colombian exporters are assumed to begin exporting larger quantities to the Asia-Pacific market as a result of weak import demand in the EU and the US. Although transportation costs from Colombia to East Asia are relatively high, export growth will be supported by low operating costs and high quality coal (low sulphur content and high calorific value) as well as policies in some Asian countries that promote diverse import supply bases. Scheduled expansions to infrastructure and mines in Colombia will underpin thermal coal exports growing at an average annual rate of 7 per cent to total 112 million tonnes in 2018.
South Africa
In 2012, exports from South Africa are estimated to have increased by 5 per cent, relative to 2011, to total 75 million tonnes. Exports in 2013 are forecast to increase by a further 4 per cent to total 78 million tonnes. Over the medium term, growth in export volumes is expected to be limited by a recently announced government policy that will aim to secure coal supply for stated-owned electricity generator, Eskom. As a result, exports are projected to increase at around 1 per cent a year between 2013 and 2018, to total 80 million tonnes in 2018.
March 2013 43
Australias export volumes and values

Australias thermal coal export volumes are forecast to increase by 18 per cent in 201213, relative to 201112, to total 187 million tonnes. The value of exports in 201213 are forecast to increase by 3 per cent to total $17.6 billion, with the increase in volumes more than offsetting the lower Australian dollar thermal coal price. Over the remainder of the outlook period, Australias thermal coal exports are projected to grow at an annual rate of around 11 per cent to total 304 million tonnes in 201718. Export earnings are projected to grow at around 5 per cent a year to total $23.2 billion dollars (in 201213 dollars). Figure 4: Australias thermal coal exports
350 280 210 140 70 Mt 1997-98 2001-02 2005-06 volume 2009-10 value (right axis) 2013-14 2017-18 25 20 15 10 5 2012-13 A$b
Sources: BREE; ABS.
March 2013
Table 1:
World
Thermal coal outlook

unit 2011 2012 2013 f 2014 z 2015 z 2016 z 2017 z 2018 z
Contract prices b nominal real c Coal trade Imports Asia China Chinese Taipei India Japan Korea, Rep. of Malaysia other Asia Europe European Union d other Europe Exports Australia China Colombia Indonesia Russian Federation South Africa United States
US$/t US$/t Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt
130 134 866 577 146 63 86 122 97 21 42 211 165 46 148 11 75 309 109 72 34 2010 11
115 117 958 665 210 63 101 133 95 21 42 218 173 45 171 10 76 315 110 75 50 2011 12 222.9 158.4 17 118 17 614
99 99 988 696 228 62 113 130 98 22 43 218 167 51 189 10 79 335 110 78 55 2012 13 f 251.7 186.7 17 615 17 615
102 101 1 014 724 243 60 124 129 102 22 44 218 166 52 202 10 87 345 112 78 51 2013 14 z 258.3 193.3 17 660 17 162
104 102 1 040 750 250 59 137 129 106 23 46 220 166 54 223 9 98 352 114 79 47 2014 15 z 278.7 213.6 19 934 18 826
105 101 1 068 774 252 59 153 128 110 24 48 222 166 56 256 9 107 356 116 79 45 2015 16 z 302.5 237.2 22 365 20 527
99 94 1 098 800 255 58 169 128 113 26 51 225 166 59 283 9 110 359 114 80 31 2016 17 z 333.3 268.0 24 876 22 188
96 90 1 125 824 257 57 185 127 117 27 54 227 166 61 315 9 112 361 112 80 23 2017 18 z 369.1 303.8 26 770 23 204
Production Exports Volume Value nominal real e
Australia
Mt Mt A$m A$m
206.1 143.3 13 956 14 686
b Japanese Fiscal Year, starting April 1, fob Australia basis, BREE AustraliaJapan average contract price assessment. For steaming coal with a calorific value of 6700 kcal/kg (gross air dried. c In JFY 2012 US dollars. d Regarded as 27 countries for all years. e In 201213 Australian dollars. f BREE forecast. z BREE projection. Sources: BREE; ABARES; International Energy Agency; Coal Services Pty Ltd; Queensland Department of Mines and Energy.
March 2013 45
Uranium
John Barber
Prices
The uranium spot price averaged around US$48 a pound for 2012, a decrease of 15 per cent from 2011. While the uranium spot price remained relatively stable for the first half of 2012, subdued demand associated with the continued shut-down of Japans nuclear power industry led to a price decline in the second half of the year. Prices fell from around US$52 a pound in the first quarter to around US$42 a pound in the last quarter of 2012. In 2013, the average spot price of uranium is forecast to decline a further 10 per cent, relative to 2012, to around US$45 a pound. Delays in the start-up of new nuclear reactors since the 2011 Fukushima Daiichi reactor incident, the continued shut-down of Japanese nuclear reactors until at least the second half of 2013 and large inventories of uranium are expected to limit the prospects for spot price growth in the first half of 2013. In the second half of 2013 reactor start-ups in several countries, the re-start of some Japanese reactors and opportunistic buying ahead of the expected tightening of supply associated with the end of the current US-Russian Highly Enriched Uranium (HEU) deal are expected to support higher uranium spot prices. The supply situation is projected to tighten substantially over the outlook period to 2018. The combination of an increase in consumption demand due to a substantial rise in the number of operating nuclear reactors, lower supplies from secondary sources and delays in the development of major uranium mining projects around the world, are expected to support uranium prices rising from their current levels. Over the outlook period, the uranium spot price is projected to increase at an average annual rate of around 6 per cent to US$70 a pound (in 2013 dollars) in 2018. Figure 1: Quarterly uranium price
160 140 120 100 80 60 40 20 2013 US$/lb 1998
2000
2002
2004
2006
2008 Real Price
2010
2012
2014
2016
2018
Sources: BREE; The Ux Consulting Company, LLC http://www.uxc.com/
March 2013
Consumption
World uranium consumption for civilian electricity generation purposes is estimated at 75 100 tonnes in 2012, a 1.8 per cent increase from 2011, but 6 per cent lower than 2010. The overall drop in consumption since 2010 is attributable to the shut-down of most of Japans nuclear power industry following the 2011 Fukushima incident and early closure of eight reactors in Germany. These have more than offset the additional uranium requirements associated with the 15 new and refurbished reactors that achieved first power over the same period. In 2013, world uranium consumption is forecast to increase by 9 per cent, relative to 2012, to total 82 100 tonnes. The re-commitment of several countries to expand their nuclear power generating capacities is expected to result in up to 13 new reactors either starting commercial operations or achieving first power in 2013. Some of these nuclear power plants had been delayed pending the outcome of Government energy policy reviews, but are now scheduled to start up in 2013. China accounts for most of this growth with 6 new nuclear reactors that have a combined capacity of around 7 200 megawatts-electric with a potential start-up in 2013. Japans energy policy and regulations will be a key determinant of uranium demand in the short term. As at 1 January 2013, only 2 of Japans 50 nuclear power reactors were operating with the remainder shut down for safety inspections. Their immediate future will be determined by the set of safety regulations to be finalised by the newly established Nuclear Regulatory Authority (NRA). Based on the draft proposal produced by the NRA in January 2013 it is expected that only a small portion of Japans nuclear reactors may re-enter service in 2013. The majority of Japans nuclear reactors are projected to re-start later in the outlook period following further construction works necessary for compliance with the mandated safety requirements. Key factors underpinning a restart of some reactors are the recent rises in Japans carbon emissions, limited availability of electricity to support economic growth and high LNG prices associated with the increase in the use of gas in Japans energy mix while its nuclear industry has been idled. Given the age of some reactors and the potential costs of complying with the new safety regulations, not all of Japans nuclear power generating capacity is likely to be re-started over the outlook period and may, instead, be de-commissioned. The outlook period from 2013 to 2018 is projected to be a period of substantial expansion in nuclear power generating capacity, particularly in emerging economies. The low carbon emissions, reliability as a source of base-load power and comparatively cheap operating cost have made nuclear power an appealing source of power to countries with few energy resource endowments of their own, or with rapidly growing energy demand. Total world uranium consumption is projected to increase at an average annual rate of 5 per cent to total around 100 000 tonnes in 2018. Driving this increase in consumption will be 75 new reactors with a combined capacity of around 80 Gigawatts-electric (GWe) that are projected to start-up by the end of 2018.
March 2013 47
Figure 2: Net additional nuclear power capacity by 2018

50000 40000 30000 20000 10000 MWe China Eastern Europe India North America Asia Middle-East South America
Sources: BREE; WNA.
China will be the largest contributor to the nuclear resurgence over the outlook period. There are currently 28 nuclear reactors under construction in China with plans for an additional 8 reactors that may start-up by 2018, based on current construction rates. Chinas uranium consumption is projected to increase at an annual average rate of over 9 per cent over the outlook period, from around 7 700 tonnes of U3O8 in 2012 to around 13 500 tonnes of U3O8 in 2018. Although robust growth in nuclear power is projected for China, the US will remain the largest producer of nuclear power in the medium term. The availability of cheap shale gas supplies is not expected to substantially displace nuclear energy in the US in the medium term due to the low operating cost of producing nuclear power and the high decommissioning costs associated with shutting down nuclear power plants. The number of reactors in the US is projected to increase over the outlook period with three reactors already under construction. Consumption of U3O8 is projected to increase at an average annual rate of 1.9 per cent to total around 26 000 tonnes in 2018. There are plans to construct additional reactors in the US; however, based on current planning and construction times these are more likely to start up after 2018. Like China, India has energy policies that support substantial increases in nuclear power generating capacity to provide energy to its growing economy and population. Although most of this additional capacity is likely to start-up after the outlook period, six nuclear reactors are already under construction in India with an additional three being planned that could start operating by 2018. These will lead to Indias nuclear power capacity increasing from around 4 300 MWe in 2012 to over 12 000 MWe in 2018. Uranium consumption is projected to increase at an average annual rate of 19 per cent to support this capacity expansion, from 1 100 tonnes in 2012 to around 3 200 tonnes in 2018.
March 2013
In Europe, nuclear power capacity is projected to grow over the outlook period to 2018 with increases in the Russian Federation and eastern European countries more than offsetting the planned reductions in Germany and Belgium. France is expected to remain the largest consumer of uranium in Europe, but with consumption remaining stable at around 11 000 tonnes. The Russian Federation will be the principal driver of growth in terms of European uranium consumption with up to nine additional operating reactors expected to start up by 2018. Uranium consumption in the Russian Federation is projected to increase at an annual average rate of 3 per cent from 2012 to total 7 800 tonnes in 2018. Beyond 2018, the expansion of nuclear power is expected continue, potentially at an even greater rate. While the Fukushima Daiichi incident led a number of countries to review their energy policies, most have re-affirmed their commitment to increasing the role of nuclear power in their energy mix. In addition to the emerging economies driving the current expansion of nuclear power, several other nations appear likely to develop new nuclear power industries after 2020, particularly in the Middle East. The United Arab Emirates has already committed to building its first nuclear reactor and has advanced plans for further reactor approvals. The oil-rich nation of Saudi Arabia also has well-advanced plans to start its own nuclear power industry as a means of reducing its use of oil in its energy mix in the long term. These expansion plans indicate world uranium consumption will continue to grow in the long term.
Production
In 2012, world uranium mine production is estimated to have increased despite weak world demand. Most of this growth is attributable to previously established mines, such as Paladin Energys Langer Heinrich mine in Namibia, ramping up towards full production or mines recovering from production disruptions. Total primary uranium production is estimated to have increased 6.5 per cent in 2012, relative to 2011, to total 67 000 tonnes. Subdued world demand and high levels of existing inventories are expected to limit further production growth in 2013. Primary uranium production is forecast to increase by 0.8 per cent in 2013 to around 68 000 tonnes, underpinned by further production ramp-ups at existing mines in Kazakhstan, Niger and Namibia. Heavy storms in Kazakhstans Sozak region in February 2013 are not expected to have any notable effect on its uranium production. Partially offsetting the production increases in Kazakhstan, Niger and Namibia is forecast lower production in Australia associated with the cessation of ore production at pit 3 of ERAs Ranger mine in December 2012. In the medium term, world primary uranium production is projected to increase at an average annual rate of 5 per cent to total around 92 000 tonnes in 2018. Canada is the main contributor to this projected growth in production with the start-up of Camecos Cigar Lake mine underpinning a 6 300 tonne per year, or 60 per cent, increase in uranium output in 2018, relative to 2012.
March 2013 49
Over the outlook period, Kazakhstan will remain the worlds largest supplier of uranium. Although no new mines in Kazakhstan are viewed as likely to start up before 2018, existing mines are expected to continue expanding production in this period. In 2018, Kazakhstan is projected to produce around 29 000 tonnes of U3O8, a 17 per cent increase relative to 2012. Niger and Namibia are both projected to have substantial increases in their uranium production over the outlook period, underpinned by the assumed opening of the large Imouraren (Niger) and Husab (Namibia) mines after 2015. Uranium production in Namibia is projected to total around 8 800 tonnes in 2018, a 78 per cent increase relative to 2012. Similarly, production in Niger is projected to increase 60 per cent over the outlook period to total 8 100 tonnes. There are additional projects being developed in these regions, such as Bannerman Resources Etango project in Namibia, which may commence operations before 2018 and further increase production.
Box 1: Demand and supply balance

For uranium markets, 2011 was the year of unanticipated demand shocks in the form of energy policy changes in response to the Fukushima Daiichi reactor incident. Japan shutdown almost its entire nuclear power industry, Germany brought forward the closure of several nuclear reactors and a number of countries halted the development of their nuclear energy programs to review safety guidelines. In coming years the supply-side is expected to become the more central issue for the market and principal driver of price changes. The first supply issue facing the uranium market is an expected, sharp drop in sources of secondary supplies at the end of 2013. The US-Russian HEU agreement, which removes highlyenriched uranium from Russian nuclear weapons and down-blends it to levels that are suitable for use in American nuclear power plants, is scheduled to expire at the end of 2013. So far there is little evidence to suggest the agreement will be renewed and, without it, the supply of around 9 000 tonnes of U3O8 equivalent will be removed from the market in 2014. In the short-term, the drop in supply due to the end of the US-Russian HEU agreement can most likely be absorbed by the market as there are currently sufficient inventories to cover the supply dip in 2014. The more significant issue is that over the medium term many of the large uranium mining projects that were scheduled to respond to the growth in the number of nuclear reactors have been delayed. The most significant of these was the cancellation of Arevas $1 billion Trekkopje mine in Namibia. Despite being near completion, the mine, that was to provide around 3000 tonnes a year, was placed under care and maintenance in October 2012 in response to low market prices that had prevailed throughout the year. Arevas Imouraren mine in Niger has also been delayed, but is still expected to commence initial production by 2015.
March 2013
Project delays have not been isolated to those under construction in Africa and a series of uranium mining projects at less advanced stages of development in Australia have also been delayed. Cameco announced the Kintyre mine in Western Australia required a price of around $67 a pound to be feasible and has subsequently slowed the development of the mine. BHP Billitons decision to consider different ways to proceed with the Olympic Dam expansion project in South Australia indicates it is unlikely to increase production of uranium in the outlook period. BHP Billitons sale of its Yeelirrie project to Cameco is also likely to lead to a delayed start up for the mine. The aggregate effect of project delays has been to remove around 10 000 tonnes of primary uranium production that was at one point scheduled to enter the market around 2015. Commensurate delays in developing nuclear power plants in the wake of energy policy reviews and re-starting Japans nuclear power industry are likely to limit the prospect of supply shortfalls in the near term. However, given uranium mine development lead times, particularly in Australia which has the worlds largest identified uranium reserves, the delays to major projects have increased the risk of future market imbalances and price spikes. This risk increases in the long-term as the current uranium price, which has been subdued in 2012, is not sufficient to support the development of the next wave of new projects that will be needed to supply the growing nuclear power industries of China and India after 2018.
Australia
Production
In the past twelve months there have been major policy changes in Australia in relation to uranium production. In October 2012 the Queensland Government announced it would overturn a ban on uranium mining that had been in place since 1989. As uranium exploration was not included in the ban, there are several known sites in the Mt Isa region of Queensland, such as Paladin Energys Valhalla and Laramide Resources Westmoreland deposits, that have the potential to increase Australias production of uranium. Based on current market conditions and the lead time to bring a uranium mine into operation in Australia it is unlikely that production from Queensland will start within the next 5 years. Similarly, the announced introduction of uranium exploration in New South Wales is not expected to result in uranium production before 2018. Western Australia is expected to the be the next state to commence uranium mining with Toro Energys Wiluna mine assumed to start initial production in late 2014. Australias production of uranium in 201112 increased 8 per cent, relative to 201011, to total 7 657 tonnes. The increase in production is attributable to higher production at ERAs Ranger mine in the Northern Territory which was affected by heavy rainfall in the first half of 2011. In 201213 Australias uranium production is forecast to decrease 15 per cent due to Ranger ceasing ore extraction activities in December 2012 and relying on previously mined ore and tailings. The recently approved Four Mile mine in South Australia is not expected to start initial production until 201314 and, like all uranium mines, will need some time to ramp up to full production.
March 2013 51
Between 201112 and 201718 Australias uranium production is projected to increase at an average annual rate of 6 per cent to total 10 100 tonnes. Initial production at ERAs Ranger 3 Deeps is expected to start in late 2015, although full production capacity is estimated to be lower than the Ranger 3 pit it is replacing. New projected production at the Honeymoon, Four Mile and Wiluna mines will be partially offset by the assumed closing of the Beverley mine in South Australia. The expansion of BHP Billitons Olympic Dam mine is not expected to occur in this outlook period and only one of Camecos Kintyre and Yeelirrie projects is assumed to start initial production late in the period.
Exports
Australias energy policy gives a clear indication that there are no plans for a domestic nuclear power industry. Therefore, all uranium produced in Australia is still assumed to be provided to export markets throughout the outlook period. Supported by higher production, Australias uranium export volume is forecast to increase to around 8 500 tonnes in 201213, an increase of 22 per cent compared to 201112. The value of uranium exports from Australia is forecast to increase by 13 per cent in 201213 to total $686 million with the lower price of uranium limiting growth. Over the outlook period, Australias uranium export volumes are projected to increase at an average annual rate of 6.5 per cent to total around 10 100 tonnes in 201718. This increase in export volume and projected increases in uranium prices underpin higher export values which are projected to increase to around $910 million (in 201213 prices) in 201718. Figure 3: Australias uranium export volumes and values
12 10 8 6 4 2 kt 1997-98 2001-02 2005-06 volume 2009-10 value (right axis) 2013-14 2017-18 1200 1000 800 600 400 200 201112 A$m
Sources: BREE, ABS.
March 2013
Table 1:
World
Uranium outlook
unit 2011 63.3 10.4 10.8 22.9 3.5 73.8 4.8 23.4 3.3 5.8 21.7 56.8 58.5 2010 11 t t A$m A$m A$/kg A$/kg 7 069 6 950 610 642 87.7 92.3 2012 67.2 11.9 10.2 24.6 3.3 75.1 7.7 22.6 0.4 6.5 23.3 48.5 49.4 2011 12 7 657 6 917 607 625 87.8 90.3 2013 f 67.9 12.7 10.4 25.1 3.5 82.1 7.5 23.4 3.9 6.7 23.1 44.6 44.6 2012 13 f 8 177 8 492 686 686 80.8 80.8 2014 z 72.1 13.2 11.9 26.0 3.9 87.2 11.4 22.9 8.4 6.3 21.8 54.8 54.2 2013 14 z 6 875 6 975 611 594 87.6 85.2 2015 z 78.2 13.7 14.3 27.3 4.2 89.0 10.7 22.6 10.3 5.8 22.6 64.0 62.7 2014 15 z 7 490 7 490 714 675 95.4 90.1 2016 z 83.5 14.8 16.6 28.6 4.4 89.9 9.7 25.0 9.0 6.9 22.0 60.5 58.5 2015 16 z 8 390 8 390 837 768 99.7 91.5 2017 z 87.9 16.6 16.7 28.8 4.9 94.9 12.5 23.3 8.3 7.7 23.7 66.3 63.2 2016 17 z 9 240 9 240 901 804 97.5 87.0 2018 z 92.1 19.8 16.5 28.8 5.3 100.6 13.5 23.9 7.8 7.8 26.1 73.8 69.4 2017 18 z 10 140 10 140 1 050 910 103.6 89.8
Production Africa b Canada Kazakhstan Russian Federation Consumption China European Union c Japan Russian Federation United States Spot price real d
kt kt kt kt kt kt kt kt kt kt kt US$/lb US$/lb
Production Export volume nominal value real value e Average price real e
Australia
b Includes Niger, Namibia, South Africa, Malawi and Zambia. c Regarded as 27 countries for all years. d In 2013 US dollars. e In 201213 Australian dollars. f BREE forecast. z BREE projection. Sources: BREE; ABARES; Australian Bureau of Statistics; Department of Resources, Energy and Tourism; Ux Consulting.
March 2013 53
Resources outlook
Steel and steel-making raw materials
Tom Shael
World steel consumption

World steel consumption in 2012 is estimated to have increased by 3 per cent, relative to 2011, to around 1.5 billion tonnes. Lower rates of growth are estimated for most major steel consuming economies which can be attributed to lower investment growth in infrastructure and fixed assets as well as uncertainty surrounding economic prospects for key OECD economies. In 2013, world steel consumption is forecast to increase by 3 per cent, relative to 2012, to total 1.6 billion tonnes. Forecast growth will be supported by increased infrastructure construction activity in emerging economies, although potentially lower rates of investment in residential construction in China represent a downside risk to this growth. Over the period 2014 to 2018, world steel consumption is projected to increase at an average annual rate of 3 per cent to total 1.8 billion tonnes in 2018 (see Table 1). Growth in steel consumption in OECD economies is projected to be subdued due to the effects of austerity programs on steel-intensive capital formation and assumed lower economic activity. By contrast, growth in non-OECD steel consumption is projected to be robust, supported by sustained economic growth, higher rates of fixed capital formation and on-going urbanisation. Table 1: World steel consumption and production (Mt)
2011 Crude steel consumption European Union 27 US Brazil Russian Federation China Japan Korea, Rep. of Chinese Taipei India World steel consumption 169 96 28 47 650 70 59 22 74 1485 167 98 28 49 669 73 59 22 78 1527 168 100 30 50 697 75 63 23 84 1584 170 103 31 52 725 77 65 24 89 1641 172 105 32 53 751 78 67 25 95 1688 175 107 33 54 776 80 69 25 101 1737 177 109 34 55 800 81 72 26 106 1792 180 111 35 56 822 83 74 27 112 1846 2012 2013 f 2014 f 2015 z 2016 z 2017 z 2018 z
March 2013
2011 Crude steel production European Union 27 US Brazil Russian Federation China Japan Korea, Rep. of Chinese Taipei India World steel production 176 86 35 69 683 108 68 23 72 1510
2012 167 89 35 71 709 107 69 21 77 1533
2013 f 167 90 37 73 737 109 72 21 82 1583
2014 f 169 92 39 76 765 110 74 22 88 1636
2015 z 172 94 41 79 792 112 77 22 92 1684
2016 z 175 96 42 83 816 113 80 23 98 1738
2017 z 179 98 44 86 840 114 83 23 104 1793
2018 z 182 100 45 89 862 116 86 24 111 1845
Sources: BREE; World Steel Association.
China was the worlds largest consumer of steel in 2012, accounting for around 44 per cent of total global consumption. However, the rate of growth in steel consumption was slower than in 2011 due to the tailing off of Government spending programs initiated in response the global financial crisis. In 2013, Chinas steel consumption is forecast to increase 4 per cent, relative to 2012, to total 697 million tonnes. The announced approval of infrastructure investment packages in late 2012, particularly expansions to rail networks, as well as continued growth in commercial and residential construction are expected to support higher steel consumption. Over the remainder of the outlook period (2014 to 2018), Chinas steel consumption is projected to continue increasing, underpinned by the construction of housing and infrastructure to support Chinas increasing urban population. Although steel demand in China is projected to increase over the outlook period, the rate of growth is expected to be lower. The lower growth rate reflects an expected slowing in housing and property investment brought about by government policies designed to reduce over-investment in the property sector and a gradual shift towards a more consumption, rather than investment, driven economy in China. Between 2014 and 2018 Chinas steel consumption growth is projected to average 3 per cent a year to total 822 million tonnes in 2018. If the Chinese economy were to undergo a structural shift and reduce its rate of fixed asset investment sooner, Chinas steel consumption (and production) could be substantially lower than its projected level by the end of the outlook period.
March 2013 55
In 2013, Indias steel consumption is forecast to increase 7 per cent, compared to 2012, to total 84 million tonnes. Higher consumption is expected as a result of assumed robust economic growth associated with government spending on infrastructure and higher consumption of consumer durables. Over the period 2014 to 2018, consumption growth is projected to increase at an average annual rate of 6 per cent a year to total 112 million tonnes in 2018. Increases in Indias steel consumption are expected to be supported by government efforts to increase the coverage and quality of road networks (including bridges), rail systems, electricity generation and other infrastructure as well as a gradual increase in consumption of consumer durables in response to rising incomes. In Brazil, steel consumption is projected to grow strongly over the outlook period, increasing at a projected average rate of 3 per cent a year to total 35 million tonnes in 2018. The construction of infrastructure that will be required to host the 2014 FIFA World Cup and then the 2016 Olympic Games is expected to provide strong support for steel consumption growth. Over the outlook period, steel consumption growth in OECD economies is projected to be slower than non-OECD economies. Steel consumption in the US and the EU is projected to increase at an average annual rate of 2 per cent and 1 per cent, respectively, to 2018. In Japan, steel consumption is forecast to increase by 2 per cent a year over the outlook period. In Japan, higher steel consumption will be supported by rebuilding activity across its earthquake and tsunami affected regions in the first half of the outlook period. Japans steel consumption growth is projected to moderate in the second half of the outlook period as reconstruction comes to an end. In 2018, Japans consumption is projected to total 83 million tonnes, 10 million tonnes higher than 2012. Steel consumption in the US and the EU is projected to total 111 and 180 million tonnes, respectively. Neither is expected to have rates of fixed asset investment that would support substantially higher growth in steel consumption.
World steel production

World steel production in 2012 is estimated to have been 2 per cent higher than in 2011, at 1.5 billion tonnes. The slower rate of growth compared with 2011 is attributed to uncertainty about world economic growth and the future prospects for world steel industries. In 2013, world steel production is forecast to increase by 3 per cent, relative to 2012, to total 1.6 billion tonnes. Over the outlook period, global steel production is projected to grow at an average rate of 3 per cent a year, to reach 1.8 billion tonnes in 2018. The projected growth reflects primarily strong growth in production in emerging economies, particularly China and India.
March 2013
Figure 1: Quarterly steel production

350 300 250 200 150 100 50 Mt Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Japan
United States India
Russian Federation Germany
Republic of Korea China
Source: World Steel Association.
In 2013, Chinas steel production is forecast to increase by 4 per cent, relative to 2012, to total 737 million tonnes. After growing at an annual average rate of 15 per cent from 2002 to 2012, the rate of growth in Chinas steel production is projected to moderate over the outlook period. Over the period 2014 to 2018, Chinas steel production is projected to grow at 3 per cent a year to total 862 million tonnes in 2018. The moderation in production growth is expected as a result of government measures to curb production overcapacity issues (particularly in some low-value steel products) and to increase the overall efficiency of the domestic steel industry. Over the outlook period, Indias steel production is projected to increase at an average annual rate of 6 per cent, to reach 112 million tonnes in 2018. The increase in steel production is expected to be bolstered by demand from both the public and private sectors. The government-owned corporations Steel Authority of India Limited (SAIL) and Rashtriya Ispat Nigam Limited (RINL) have expansion plans to increase combined production capacity by around 15 million tonnes across a number of states by 2015. Private steel producers also have plans to increase their steel production, including Tata Steel, Essar Steel and Jindal Steel Power Limited (JSPL). In OECD economies, only a moderate increase in steel production is projected to the end of 2018. Steel production in both the US and Japan is projected to grow at an average rate of 2 per cent a year, to reach 100 million tonnes and 116 million tonnes, respectively, in 2018. Capacity utilisation rates at steel mills in the EU are expected to begin increasing in 2014, in line with assumed stronger economic growth in key producing regions following weak economic activity in 2011, 2012 and 2013. Steel production in the EU is expected to increase at an average annual rate of 1 per cent between 2013 and 2018 and to total 182 million tonnes in 2018.
March 2013 57
Iron ore prices

In 2012, iron ore contract prices averaged US$129 a tonne, a decrease of 16 per cent from the historic record of US$153 a tonne for 2011. Spot prices for cargoes of 62 per cent iron content basis, FOB Australia averaged US$122 a tonne in 2012, with higher prices in the first half of 2012 being counterbalanced by a substantial downturn in the September quarter. The sharp drop in spot prices, to a low of around US$81 a tonne FOB Australia, was a result of de-stocking activities by traders in China and negative sentiment surrounding the Chinese steel industry, particularly production overcapacity. Iron ore price volatility has been increasing over the past four years which has coincided with the increased use of shorter term contracts and spot trading. Price swings of 30 per cent, or more, in response to stock cycles and sentiment are becoming regular features of the market. The sharp, yet protracted, recovery in iron ore spot prices in the December 2012 quarter resulted in spot prices finishing 2012 at over US$130 a tonne. The recovery has continued strongly into the March quarter 2013, reaching a high of US$152 a tonne (FOB) in mid-February and are estimated to average around US$145 a tonne for the March quarter. The recovery in prices up to February 2013 can be attributed to improved sentiment surrounding Chinas outlook for steel demand combined with re-stocking of ore at Chinese ports and steel mills. Spot prices, however, have declined in March 2013 due to surging inventories of steel products. For 2013 as a whole, contract and spot prices are forecast to average US$119 a tonne (see Figure 2). Over the remainder of the outlook period, contract and spot prices are both projected to decline year-on-year and to average around US$90 a tonne in 2018 (in 2013 US dollars). The decrease in prices is expected in response to moderating demand, particularly in China, and substantial supply increases from mining projects that are already under construction and scheduled to commence operation over the medium term. Figure 2: Iron ore contract prices, FOB Australia
200 180 160 140 120 100 80 60 40 20 2013 US$/t 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
iron ore benchmark contract
Sources: BREE; Bloomberg.
March 2013
World trade in iron ore

In 2013, the world iron ore trade is forecast to increase by 5 per cent, compared with 2012, to total 1.2 billion tonnes. Over the medium term, the world iron ore trade is projected to increase at an annual average rate of 5 per cent to reach 1.5 billion tonnes in 2018 (see Table 2). Chinas imports are projected to grow strongly, while the majority of additional iron ore exports are expected to come from Australia and Brazil. Table 2: World iron ore trade (Mt)
2011 Iron ore imports European Union 27 Japan China Korea, Rep. of Chinese Taipei Iron ore exports Australia Brazil India (net exports) Canada South Africa Guinea & Mauritania World trade
Sources: BREE; UNCTAD.
2012 128 131 745 66 18 488 327 23 34 47 12 1123
2013 f 130 132 773 68 20 554 333 2 34 49 12 1176
2014 f 131 134 805 70 19 662 366 13 35 51 13 1267
2015 z 133 136 832 73 20 715 391 17 35 54 14 1326
2016 z 135 137 873 76 21 760 395 18 35 56 16 1379
2017 z 138 139 916 79 21 812 405 13 35 58 17 1434
2018 z 140 140 966 82 22 831 411 4 35 60 24 1475
135 128 687 65 20 438 331 48 32 42 11 1083
Iron ore imports

In 2013, Chinas imports of iron ore are forecast to increase 4 per cent, relative to 2012, to total 773 million tonnes. The key factor determining Chinese imports is the cost and quality of domestic production. Chinas iron ore production tends to be of a low quality relative to imports and there are a number of mines with high marginal costs of production. As a result, the proportion of Chinese consumption supplied by imports can fluctuate substantially depending on Chinas domestic swing production, which responds to prevailing iron ore import prices.
March 2013 59
Over the medium term, Chinese steel producers are expected to increase their reliance on imported ore due to declining ore grades of domestic ores, an increasing concentration of steel mills on the eastern coast with easy access to ports and efforts being made to increase the average grade of steel produced in China (which requires higher grade ores, such as those from Australia and Brazil). Although projected to increase its reliance on imports, China aims to have around 40 per cent of its imports supplied by Chinese owned foreign projects by 2015. From 2014 to 2018, Chinas imports are projected to increase at an annual average rate of 5 per cent to reach 966 million tonnes in 2018, accounting for around 65 per cent of global imports. Imports into the Republic of Korea are projected to increase at around 4 per cent a year over the outlook period, supported by robust steel demand by car and ship manufacturers. Imports into the EU and Japan are expected to continue to increase in line with modest growth in steel production. Iron ore imports for both the EU and Japan are projected to increase at an annual average rate of around 1 per cent over 2013 to 2018 to total 140 million tonnes in 2018.
Iron ore exports

In 2013, Australian iron ore exports are forecast to increase by 12 per cent, compared with 2012, to total 554 million tonnes. The increase will be supported by forecast higher production at a number of mines including those operated by Rio Tinto and BHP Billiton as well as the ramp up of production at Fortescues Chichester Hub and Solomon Hub expansion projects. As a result of robust investment at the start of this decade, expansions and new mines in existing regions in Australia are expected to support strong growth in iron ore exports from Australia in the first half of the outlook period. Australias iron ore exports are projected to increase at an average annual rate of 8 per cent a year over the period 2014 to 2018 to total 831 million tonnes in 2018 (see Figure 3). Brazil is the worlds second largest exporter of iron ore and is projected maintain this position over the medium term. In 2013, Brazils iron ore exports are forecast to increase by 2 per cent, relative to 2012, to total 333 million tonnes. Over the remainder of the outlook period, Brazils exports are projected to increase at an annual average rate of 4 per cent and to reach 411 million tonnes in 2018. A substantial proportion of this growth in exports is expected to be sourced from expansions located in the Carajas and South-East iron ore systems that are scheduled for completion over the next five years. The largest of these projects is the 90 million tonnes annual capacity Serra Sul project that is scheduled to commence operation towards the end of the outlook period; however, a mining project of this size and technical complexity has substantial schedule risks.
March 2013
Figure 3: Major iron ore exporters

1600 1400 1200 1000 800 600 400 200 Mt 1998 2000 Australia 2002 Brazil 2004 2006 2008 Canada 2010 2012 2014 2016 2018
India
South Africa
Guinea & Mauritania
Sources: BREE; UNCTAD.
Indias exports of iron ore are projected to decrease over the outlook period due to government policies. In the short term, Indias iron ore exports are forecast to decrease substantially due to Government mandated mining bans in the key iron ore mining states of Odisha and Goa. The ban on mining, as recommended by the Shah Commission, is expected to remain in place in the short term, as measures are taken to eliminate illegal mining of iron and manganese ores. The ban is forecast to result in a substantial decrease in Indias domestic iron ore production, which, in turn, will cause a reduction in exports rather than domestic consumption. Another factor affecting exports in the short term is the continuation of the 30 per cent excise tax on iron ore exports designed to discourage exports. Indian iron ore exports over the remainder of the outlook period will be negatively affected by Indian Government policies that aim to ensure sufficient iron ore supply for domestic steel producers. Combined with projected strong growth in Indias steel production, these policies are expected to result in India becoming a net importer of iron ore during the outlook period. Indias iron ore exports are forecast to total 9 million tonnes in 2013, decreasing from an estimated 26 million tonnes in 2012. Indias exports are projected to remain low for the remainder of the outlook period, with net imports expected to peak at around 18 million tonnes in 2016 before domestic supply begins to ramp up.
March 2013 61
Exports from West Africa (primarily Guinea and Mauritania) are not projected to have a substantial impact on world markets within the medium term. The large amount of required infrastructure and associated investment to enable large-scale exports is not expected to be developed fully within the outlook period. Although BREE projects that there will be some additional exports from this region, sovereign risks and infrastructure delays are expected to limit the development of a substantial iron ore export industry over the outlook period.
Metallurgical coal prices

Contract prices for high quality metallurgical coal for delivery in the March quarter 2013 were settled at around US$165 a tonne, a slight decrease from US$170 a tonne in the December quarter. Contract prices are forecast to increase over the remainder of 2013 and to average US$172 a tonne for 2013 as a whole (see Figure 4). Over the period 2014 to 2018, metallurgical coal prices are projected to increase slightly (in 2013 US dollars) and to average US$177 in 2018, with prices supported by high costs of marginal supply, given a growing demand. Figure 4: Metallurgical coal benchmark prices, FOB Australia
350 300 250 200 150 100 50 2013 US$/t 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
high quality hard coking
semi-soft coking
Source: BREE.
March 2013
World trade in metallurgical coal

In 2013, world metallurgical coal trade is forecast to grow by 4 per cent, relative to 2012, to total 283 million tonnes. Over the remainder of the outlook period, world trade of metallurgical coal is projected to increase at an average annual rate of 5 per cent to reach 357 million tonnes in 2018 (see Table 3). China and India are projected to have the largest growth in imports to 2018 while growth in exports is projected to be primarily sourced from Australia. Table 3: World metallurgical coal trade (Mt)
2011 Metallurgical coal imports European Union 27 Japan China Korea, Rep. of Chinese Taipei India Brazil Metallurgical coal exports Australia Canada US Russian Federation World trade
Sources: BREE; IEA.
2012 42 53 52 33 7 16 13 144 30 63 17 272
2013 f 44 53 61 34 7 22 14 158 31 61 16 283
2014 f 47 54 73 35 7 23 15 176 32 60 17 305
2015 z 47 55 83 37 8 26 16 191 33 57 17 321
2016 z 51 56 93 38 8 28 16 200 34 54 17 338
2017 z 51 56 97 39 8 29 17 208 34 51 18 346
2018 z 51 57 105 41 8 32 17 218 34 48 18 357
47 54 38 32 4 19 12 133 28 63 14 253
Metallurgical coal imports

Between 2013 and 2018, Chinas metallurgical coal imports are projected to increase 12 per cent a year to reach 105 million tonnes by 2018. The growth in Chinas imports is the result of several factors. First, domestically produced coal in China is of lower quality and higher cost than imports. Second, domestic coal reserves are large distances from steel mills in the southern coastal region of China. Third, new steel production capacity will be increasingly located in the western regions of China due to Government plans for shifting future industrialisation and urbanisation further west. While there are some metallurgical coal reserves in Chinas west, the region is relatively close to the Mongolian border and steel mills would likely source imports from Mongolia, which has substantial reserves. Fourth, the Chinese Government has adopted a policy of trying to use imported metallurgical coal before drawing on domestic reserves.
March 2013 63
Indias imports of metallurgical coal are projected to increase at an annual average rate of 12 per cent over the outlook period to reach 32 million tonnes in 2018. Imports into Brazil are projected to increase at an average annual rate of 5 per cent between 2013 and 2018 and to total 17 million tonnes in 2018. Imports into the EU are projected to increase slightly over the outlook period, growing at an average of 3 per cent a year to reach 51 million tonnes in 2018. The strong growth in imports into Brazil and India reflect projected strong growth in steel production. The import growth into the EU is a consequence of moderate growth in steel production combined with lower metallurgical coal production.
Metallurgical coal exports

Metallurgical coal exports from Australia in 2013 are forecast to increase by 9 per cent to total 158 million tonnes, around the level of exports prior to the 2011 Queensland floods. The impact of the 2013 storms and floods in Queensland on exports is forecast to be minimal. Over the period 2014 to 2018, Australias exports of metallurgical coal are projected to increase at an average annual rate of 7 per cent to reach 218 million tonnes in 2018 (see Figure 5). The strong growth will be supported by new and expanded mining projects such as BHP Billiton Mitsubishi Alliances (BMA) Caval Ridge (8 million tonnes a year) and Daunia projects (4.5 million tonnes); Anglo Americans Grosvenor underground mine (5 million tonnes); and the Jellinbah Groups joint venture Lake Vermont expansion (4 million tonnes). Additional mine output will be supported by expansions to port and rail capacity on the Queensland coast, such as developments at the Port of Hay Point. Figure 5: Major metallurgical coal exporters
350 300 250 200 150 100 50 Mt 1998
2000 Australia
2002
2004 Canada
2006
2008
2010
2012
2014
2016
2018
United States
Russian Federation
Sources: BREE; IEA.
March 2013
Exports of metallurgical coal from Canada and the Russian Federation are projected to increase slightly over the medium term and to total, respectively, 34 million tonnes and 18 million tonnes in 2018. Exports from Mongolia are projected to increase at around 3 per cent a year to 2018, reaching around 25 million tonnes. The rate of growth is expected to be lower than in recent years due to a substantial cooling in the investment climate in Mongolia. Exports from the US are forecast to decline in 2013, compared with 2012, and are projected to continue declining year-on-year to total 48 million tonnes in 2018. Infrastructure constraints and associated high freight costs are expected to make US exports less commercially competitive in the medium term.
Australian exports
In 201213, Australias export volumes of iron ore are forecast to increase by 11 per cent, relative to 201112, to total 522 million tonnes, supported by higher production from Fortescue and Rio Tinto. The value of Australias iron ore exports in 201213 is forecast to decrease by 9 per cent, compared with 201112, to total $57.0 billion. The decrease can be attributed entirely to lower forecast prices, despite higher volumes relative to 201112. Over the medium term, projected growth in export volumes from expansions to capacity at a number of mines, such as Fortescues Chichester Hub and Solomon Hub expansions, will underpin higher export earnings in 201718. However, the effect of higher export volumes on total export earnings will be offset by a projected decline in real iron ore prices. Export volumes are projected to increase to 821 million by 2018 tonnes (see Figure 6) or an average growth of 10 per cent a year over the outlook period. Iron ore export values are projected to trend higher over the medium term and to total $61.6 billion (in 201213 dollars) in 201718.
March 2013 65
Figure 6: Australias iron ore exports

1000 800 600 400 200 Mt 1997-98 2001-02 volume 2005-06 2009-10 value (right axis) 2013-14 2017-18 75 60 45 30 15 2012-13 A$b
Sources: BREE; ABS.
Australias metallurgical coal export volumes in 201213 are forecast to increase by 8 per cent to total 153 million tonnes. Despite the higher export volumes, lower forecast prices are expected to result in export earnings for metallurgical coal declining to $23.0 billion, down from $31.6 billion (in 201213 dollars) in 201112. Over the remainder of the outlook period export volumes of metallurgical coal are forecast to increase by 7 per cent a year and to total 214 million tonnes in 201718. Higher export volumes and relatively stable year-on-year projected prices are expected to result in Australias export earnings from metallurgical coal increasing to around $30 billion (in 201213 dollars) in 201718 (see Figure 7). Figure 7: Australias metallurgical coal exports
250 200 150 100 50 Mt 1997-98 2001-02 2005-06 volume 2009-10 2013-14 2017-18 value (right axis) 50 40 30 20 10 2012-13 A$b
Sources: BREE; ABS.
March 2013
Table 6:
World
Steel, iron ore and metallurgical coal outlook

unit 2011 2012 2013 f 2014 z 2015 z 2016 z 2017 z 2018 z
Contract prices b Iron ore c nominal real d Metallurgical coal e nominal real d
US$/t US$/t US$/t US$/t
153 158 289 298 2010 11
128 131 210 214 2011 12
119 119 172 172 2012 13 f
114 113 179 177 2013 14 z
105 103 180 176 2014 15 z
99 96 180 174 2015 16 z
97 93 184 175 2016 17 z
96 90 188 177 2017 18 z
Production Iron and steel gs Iron ore Metallurgical coal Exports Iron and steel gs Nominal value Real value h Iron ore Nominal value Real value h Metallurgical coal Nominal value Real value h
Australia
Mt Mt Mt Mt A$m A$m Mt A$m A$m Mt A$m A$m
7.31 447 147 1.78 1 303 1 371 407 58 387 61 444 140 29 793 31 353
5.39 504 147 1.19 983 1 012 470 62 695 64 513 142 30 700 31 590
4.80 538 157 1.00 835 835 522 56 971 56 971 153 22 976 22 976
4.71 617 169 0.89 806 783 604 64 005 62 202 165 26 177 25 439
4.65 708 188 0.85 774 731 698 69 371 65 516 184 29 297 27 669
4.59 745 200 0.83 757 695 735 66 395 60 938 196 30 882 28 344
4.54 798 207 0.82 746 666 788 69 691 62 161 203 32 217 28 736
4.48 831 218 0.80 729 632 821 71 054 61 590 214 34 692 30 071
b fob Australian basis, BREE AustraliaJapan average contract price assessment. c Fines contract, 62% iron content basis. d In 2013 US dollars. e High-quality hard coking coal. For example, Goonyella export coal. g Includes all steel items in ABS, Australian Harmonized Export Commodity Classification, chapter 72, Iron and steel, excluding ferrous waste and scrap and ferroalloys. h In 201213 Australian dollars. f BREE forecast. s BREE estimate. z BREE projection. Sources: BREE; ABARES; International Iron and Steel Institute; Coal Services Australia; Queensland Coal Board; United Nations Conference on Trade and Development.
March 2013 67
Gold
Adam Bialowas
Gold prices
In 2012 the gold price averaged US$1699 per ounce (in 2013 dollars), a 5 per cent increase relative to 2011. By the end of 2012 the average price of gold had increased for eleven consecutive years; however, 2012 was the lowest average annual increase in the gold price over this period. Over the course of 2012, the gold price displayed a lower degree of volatility than in 2011, with the standard deviation in average daily prices in 2012 less than half that of 2011. Figure 1: Quarterly gold price
2000 1800 1600 1400 1200 1000 800 600 400 200 2013 US$/oz 1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Sources: BREE, LBMA.
In 2012, the increase in the gold price was supported primarily by the official sector which increased their net purchases of gold relative to 2011. This increase was able to more than offset the effects on the gold price of lower jewellery and flat investment demand for gold. The decline in jewellery demand for gold was largely the result of a high domestic price of gold in India. Investment demand had a neutral effect on gold prices with a decrease in the demand for bars and bullion being counterbalanced by increased demand for gold backed exchange traded funds (ETFs). In 2013, the gold price is forecast to decline by 4 per cent per cent relative to 2012 to average around US$1638 an ounce. Prices are expected to fall in response to a decrease in the investment demand for gold expected to decline further if instability in global financial markets diminishes, reducing the appeal of gold as a safe haven investment. The magnitude of the decline in the gold prices is expected to be moderated by net purchases of gold by the official sectors, which are forecast to increase relative to 2012.
March 2013
Over the remainder of the outlook period (2014 to 2018), the price of gold is projected to continue to decline and average around US$1315 in 2018. The investment demand for gold is expected to decrease in response to an assumed improvement in macroeconomic conditions over the outlook period. First, stability in global financial markets is projected to reduce investment demand for gold based upon its properties as a safe haven investment. Second, improving economic conditions will lead to a willingness among investors to hold a greater share of their wealth in assets other than gold, such as equities and property. Concerns that expansionary monetary programs will lead to high inflation are not expected to be realised over the outlook period, reducing the demand for gold as a hedge against inflation.
Fabrication demand
Gold fabrication demand comprises gold used in the manufacture of jewellery, electronics, dentistry, medals, coins and other industrial applications. In 2012 gold fabrication is estimated to have declined by 5 per cent relative to 2011 to 2614 tonnes. Jewellery, which represents the largest component of gold fabrication demand, declined by 4 per cent relative to 2011 to total 1885 tonnes. The majority of this decline is attributed to India where a combination of a higher domestic price for gold and government policies designed to reduce imports of gold led to an 11 per cent decrease in fabrication demand for gold. Demand for gold in other industrial and decorative uses also declined in 2012. Economic conditions in the Eurozone reduced demand for gold by the electronics sector which declined by 5 per cent to 304 tonnes. High prices resulted in a reduction in the demand for gold for decorative purposes, such as gold thread and gold plating, decreasing by 4 per cent to 86 tonnes. Total world fabrication demand for gold in 2013 is forecast to decrease by 1 per cent, relative to 2012, to total 2580 tonnes. Fabrication demand for gold in 2013 will be heavily influenced by India which is the worlds largest single consumer of fabricated gold. Indian authorities concerns about the negative impacts of gold purchases on the economy have led to the implementation of a range of policies aimed at reducing domestic gold demand. Policies already implemented include an increase in the import duty on gold from 4 per cent to 6 per cent, a ban on jewellery imports from Thailand and restrictions upon the ability of banks to make loans for the purpose of purchasing jewellery. A range of financial products designed to make gold less attractive as a store of wealth have also been proposed. These are expected to have a negative impact on Indian jewellery demand in 2013 overriding the effects of a lower gold price. In China, rising income levels are expected to contribute to increased jewellery demand. However, the speculative component of jewellery demand, which has been a characteristic of Chinese jewellery demand over the past five years, is expected to be reduced.
March 2013 69
Over the remainder of the outlook period (2014 to 2018) gold fabrication consumption is forecast to increase at an average annual rate of 3 per cent to total 2978 tonnes in 2018. This projected increase is due to a forecast increase in the demand for jewellery, underpinned by a declining price of gold and a growing middle class. In particular, Indian demand for jewellery is projected to recover in 2014 after recovering from policies introduced in 2013. While Indian consumers may temporarily respond negatively to exogenous shocks in the short term, Indias cultural affinity with gold should help demand return to longer term consumption trends. Chinese demand for jewellery is projected to increase over the outlook period due to weaker gold prices and rising incomes that makes jewellery and other fabricated gold products more affordable for an increasing numbers of consumers.
Official sector purchases

Central banks expanded their gold holdings in 2012 with net purchases increasing by 17 per cent, relative in 2011, to total 536 tonnes. Purchases of gold were underpinned by central banks in emerging economies that have used gold as a means of diversifying their reserve asset portfolios away from traditional reserve assets such as the US dollar, the euro and the Yen. Central banks that purchased large quantities of gold in 2012 included Russia (55 tonnes), the Philippines (35 tonnes) and Brazil (34 tonnes). A forecast reduction in both investment and fabrication demand for gold in 2013 is expected to provide scope for central banks to increase their purchases of gold without distorting the market. In 2013, official sector gold purchases are expected to increase to 550 tonnes as central banks continue to diversify their asset portfolios. Central banks in emerging economies are expected to continue as the main buyers. Over the outlook period, the official sector is expected to remain a net purchaser of gold. Increasing levels of foreign exchange reserves among developing nations suggest that the official sector will remain a net purchaser, assuming central banks maintain the existing ratios of gold in their portfolios. The size of the gold market relative to global reserve holdings implies official sector purchases need to be distributed over an extended period of time to avoid distorting the gold market. The magnitude of these net purchases, however, are expected to decline over the outlook period as improving economic conditions make other forms of assets held by central banks more attractive. As official sector purchases of gold depend on a variety of special domestic circumstances, there is still considerable uncertainty over central bank gold purchases over the outlook period.
March 2013
Scrap sales
In 2012, the supply of gold from secondary sources, such as the recycling of gold jewellery and electronics, declined by 2 per cent, relative to 2011, to total 1642 tonnes. This occurred despite an increase in the price of gold. The only major market to record an increase in scrap sales was India where the domestic price of gold increased by 24 per cent, providing an indication of the price increase necessary to encourage increased sales from remaining stocks. In 2013, the quantity of gold sourced from scrap is forecast to decrease 5 per cent, relative to 2012, to total 1560 tonnes in response to lower forecast gold prices. More stable economic conditions in in key gold markets are also expected to reduce financial distress as an incentive for selling gold. Over the remainder of the outlook period the supply of scrap gold is expected to follow changes in the price of gold and to decline to a low of around 1000 tonnes in 2018.
Gold mine production

In 2012, world gold mine production increased by less than one per cent, relative to 2011, to total 2836 tonnes. This result can be attributed to underperformance at existing mines through either mine sequencing or other delays and production interruptions. These offset production from new mines that either commenced production or ramped up towards full production in 2012. In particular, labour disputes in South Africa are estimated to have reduced South African gold production by approximately 20 tonnes in 2012. World gold mine production in 2013 is forecast to grow by 4 per cent, relative to 2012, to total 2956 tonnes. This increase will be supported by a number of large operations commencing production around the world including Barrick Gold and Goldcorps joint venture Pueblo Veijo mine in the Dominican Republic (30 tonnes), Detour Golds Detour Lake operation in Canada (20 tonnes), Rio Tinto and Turquoise Hills Oyu Tolgoi in Mongolia (13.5 tonnes). The growth from new mines will be augmented by existing operations increasing production levels after abnormally low production in 2012 including Freport McMorans Grasberg mine in Indonesia and Centara Golds Kumtor mine in Kyrgyzstan. Over the remainder of the outlook period, global gold mine production is projected to increase at an annual average rate of 3 per cent to total 3345 tonnes in 2018. China is expected to remain the worlds largest gold producer; however, the outlook period is expected to see a reordering of the rankings amongst other major gold producing nations. Gold mine production in the Russian Federation is projected to increase at an annual average rate of 6 per cent to total 307 tonnes by 2018. This will result in Russia overtaking both Australia and the US to become the worlds second largest gold producer. Supporting this increase will be new production from a number of new operations which are due for completion in the outlook period. These include Kinross Dvoinoye mine (7 tonnes), Polyus Golds Natalka mine (15 tonnes) and Norlisk Nickels Bystrinskoye mine (6 tonnes) which are due to be completed in 2017.
March 2013 71
Canada has a number of gold mines, either under construction or committed, that will support production growing at an annual average rate of 9 per cent to total 193 tonnes in 2018. This will result in Canada surpassing South Africa and Peru to become the worlds fourth largest gold producer. Increased production will be supported by Detour Gold Detour Lakes mine (20 tonnes), Goldcorps Elanore mine (18 tonnes) and Newgolds Blackwater mine (17 tonnes).
Australias gold production

Australian gold mine production is expected to increase by 1 per cent, relative to 201112, to total 255 tonnes in 201213. This marginal increase in supply is a reversal of the previous year which recorded a decline in Australian gold production. New production is expected to come from Regis Resources Garden Wells mine (6 tonnes), Millennium Golds Nullagine mine (2 tonnes annual production) and Reed Resources Meekatharra mine (4.5 tonne annual production). Increased production from Newcrest Minings Cadia East and Citigolds Charters Towers gold mines are also projected. Both of these mines are underground operations and are not scheduled to achieve full production levels until the second half of the outlook period. These production increases will be offset by a number of mines that will be reducing production in 201213 including St Barbaras Southern Cross, Rand Minings Raleigh, Ramelius Resources Wattle Dam and Polymetals White Dam. In 201314 Australian gold mine production is forecast to increase a further 6 per cent, relative to 201213, to total 270 tonnes. Increased production is expected from a number of new mines which are scheduled to commence operations in 201314. These include Alkane Resources Tommingly mine (1.5 tonnes), Doray Minerals Andy Well mine (2 tonnes), Mutiny Golds Deflector mine (2 tonnes) and Southern Cross Resources Marda mine (1 tonne). The largest new mine scheduled to commence production in 201314 is the Tropicana joint venture project by AngloGold Ashanti and Independence Group (14 tonnes) which is expected to be the largest gold mine to be constructed in Australia over the outlook period. Over the remainder of the outlook period (201415 to 201718) Australian gold mine production is projected to continue increasing until 201617 when it will peak at 299 tonnes. Production increases over this period will be supported by Newcrest Minings Cadia East (additional 8 tonnes) and Citigolds Chaters Towers (10 tonnes) operations reaching full production levels. In 201718, Australian gold mine production is forecast to decline to 291 tonnes from its 201617 peak due to a scheduled decline in output from AngloGold Ashanti and Independence Groups Tropicana mine.
March 2013
Australias gold exports

Australian exports of refined gold are produced from ore from domestic mine production as well as imports of gold dore (impure gold) and scrap which are imported before being refined into gold bullion and re-exported. In 201213 the volume of Australian gold exports is forecast to increase by 6 per cent, relative to 201112, to total 320 tonnes. This reflects a combination of increased mine production over the period and above average levels of internationally sourced gold. In aggregate, the projected volume should support a 10 per cent increase in the value of Australian exports of gold in 201213, relative to 201112, to total $17 billion. In 201314, an increase in Australian mine production is forecast to result in a 8 per cent increase in the volume of Australian gold exports, relative to 201213, to total 347 tonnes. The value of gold exports is forecast to increase by 7 per cent, relative to 201213, to total $17.7 billion (in 201213 dollars). Over the remainder of the outlook period, the volume of Australias gold exports is expected to peak in 201516 at 371 tonnes and then decline to 362 tonnes in 201718. This decline reflects lower Australian mine production towards the end of the outlook period and lower volumes of gold sourced from overseas in response to a fall in the gold price over the outlook period. By 201718 the value of Australias gold exports is projected to be around $13 billion (in 201213 dollars). Figure 2: Australian gold exports
500 400 300 200 100 tonnes 1997-98 2001-02 2005-06 volume 2009-10 value (right axis) 2013-14 2017-18 20 16 12 8 4 2012-12 A$b
Sources: BREE, LBMA.
March 2013 73
Table 1:
World
Gold outlook
unit 2011 2012 2013 f 2014 z 2015 z 2016 z 2017 z 2018 z
Fabrication t consumption Mine production t Scrap sales t Residual net stock t t official sector t private sector producer hedging t Price b nominal US$/oz real c US$/oz
2 760 2 833 1 661 (1734) (457) (1283) 6 1 569 1 618 2010 11
2 614 2 836 1 642 (1864) (536) (1308) (20) 1 668 1 699 2011 12 253 304 15 462 15 910 1 621 1 668
2 580 2 956 1 560 (1936) (550) (1396) 10 1 638 1 638 2012 13 f 255 320 16 971 16 971 1 605 1 605
2 642 3 099 1 400 (1858) (525) (1358) 25 1 574 1 558 2013 14 z 270 347 18 230 17 717 1 633 1 587
2 741 3 217 1 300 (1776) (450) (1351) 25 1 440 1 411 2014 15 z 291 369 17 631 16 651 1 485 1 402
2 848 3 304 1 200 (1655) (425) (1280) 50 1 375 1 330 2015 16 z 299 371 16 266 14 929 1 365 1 253
2 917 3 338 1 100 (1521) (400) (1171) 50 1 351 1 289 2016 17 z 299 364 15 695 13 999 1 342 1 197
2 978 3 345 1 000 (1367) (400) (1017) 50 1 315 1 237 2017 18 z 291 362 15 028 13 027 1 292 1 120
Australia
Mine production Export volume Export value nominal real d Price nominal real d t t A$m A$m A$/oz A$/oz
264 301 13 016 13 697 1 389 1 462
b London Bullion Market Association AM price. c In 2013 US dollars. d In 201213 Australian dollars. f BREE forecast. z BREE projection. Note: Net purchasing and dehedging shown in brackets. Sources: BREE; ABARES; Gold Fields Mineral Services; Australian Bureau of Statistics; London Bullion Market Association.
March 2013
Aluminium
Simon Cowling
Prices
The spot price for aluminium averaged US$2055 a tonne in 2012, a decrease of 17 per cent compared to 2011. Prices peaked in February 2012 at around US$2260 a tonne before decreasing to around US$1750 a tonne by August 2012 and finishing 2012 at US$2031 per tonne. In 2013, the average spot price of aluminium is forecast to increase to around US$2075 a tonne, a rise of around 1 per cent relative to 2012. Forecast consumption growth in emerging economies and lower production growth due to plant closures in Europe and North America are expected to reduce stock holdings and support higher prices in 2013. Scheduled start-ups of new smelters in the second half of 2013 in Asia and the Middle East region are expected to offset some of the production curtailments and limit the prospects of higher price growth in the latter half of 2013. Over the outlook period (2013 to 2018), the aluminium spot price is projected to increase at an average annual rate of 1 per cent to total US$2178 in 2018. Projected growth in aluminium prices are a result of higher supply costs and demand rising at a faster rate than supply over the medium term. The growing incomes and size of the middle classes in China and India are expected to result in higher demand for automobiles and other aluminium-intensive consumer products over the outlook period and support higher consumption. New smelters are scheduled to start up in response to this growing demand, but curtailments and closures of aluminium smelters in OECD economies are likely to offset this additional production. Figure 1: Annual aluminium prices and stocks
3000 2500 2000 1500 1000 500 2013 US$/t 12 10 8 6 4 2 weeks of consumption 1998 2000 2002 2004 2006 2008 2010 2012 price 2014 2016 2018 stocks (right axis)
Sources: BREE; LME.
March 2013 75
Consumption
In 2012, world aluminium consumption is estimated to have increased around 4.5 per cent, relative to 2011, to total 44.3 million tonnes. Robust growth in Asian emerging economies more than offset decreases in consumption in Europe attributed to the sovereign debt crisis and onset of austerity measures. Total consumption in Asia is estimated to have increased 10 per cent to 29 million tonnes, underpinned by growth of 13 per cent in China (20 million tonnes in total) and 8.2 per cent in India (1.7 million tonnes in total). Total European consumption decreased 10 per cent to total 7.5 million tonnes, underpinned by substantial drops in demand in Italy (36 per cent compared to 2011) and Belgium (20 per cent). Consumption in the US increased 12.7 per cent to total 4.5 million tonnes as a result of on-going recovery in its automotive and construction industries. World aluminium consumption is forecast to increase to around 46.2 million tonnes in 2013, an increase of 4.1 per cent relative to 2012. This will be driven by further growth in Asia and an expected rebound of economic growth in Europe. China is forecast to be the principal driver of growth in consumption demand, increasing by around 8 per cent, compared to 2012, to total 21.5 million tonnes. China will remain the largest consumer of aluminium, accounting for 46 per cent of total world consumption in 2013. The US is forecast to increase its demand by around 0.5 per cent to total 4.6 million tonnes, underpinned by moderate growth in consumer spending, construction and automobile manufacturing. Over the outlook period (2013 to 2018), world aluminium consumption is projected to increase at an average annual rate of 5.0 per cent to total around 59.2 million tonnes in 2018. Robust growth in emerging economies will be the main drivers of consumption growth. Consumption in OECD countries is projected to increase, but at much lower rates than non-OECD countries. Aluminium consumption in China is projected to increase at an average annual rate of 7.7 per to around 31 million tonnes over the outlook period (2013 to 2018). The projected increase will be underpinned by substantial growth in construction as well as demand for cars and other aluminium-intensive consumer products. Unlike consumers in western economies, demand for larger luxury car models is projected to grow in China as per capita incomes continue to increase. Over the outlook period, consumption demand in the US is projected to be supported by growth in the construction and automotive sectors. Production and sales of vehicles are expected to increase in response to improving economic conditions; however, policies limiting carbon emissions and preferences for smaller, more fuel efficient cars are expected to result in less aluminium used per vehicle. Consumption demand is expected to increase at an average annual rate of 3.3 per cent to total around 5.6 million tonnes in 2018.
March 2013
A decrease in consumption demand is forecast in Europe in the short term, with a recovery projected to occur later in the outlook period. Estimated consumption demand in Europe fell around 10 per cent in 2012, relative to 2011. Consumption is forecast to decrease a further 1.2 per cent in 2013 to total 7.5 million tonnes due to the expected impacts of austerity measures in several key economies. Over the entire outlook period however, aluminium consumption in Europe is projected to grow, increasing at an average annual rate of 1.1 per cent to around 8 million tonnes in 2018. This growth is principally due to higher consumption in Germany and an assumed improvement in economic conditions.
Production
Global aluminium production is estimated to have increased to around 45.8 million tonnes in 2012, an increase of 2.4 per cent from 2011. Higher production in Asia and the Middle East offset declines in Europe where higher energy costs and subdued demand have led to production curtailments and smelter closures. European aluminium production is estimated to have decreased around 3.5 per cent, relative to 2011, to total 8.7 million tonnes. Cost issues also led to production curtailments in both Canada and Australia in 2012. In 2013, world aluminium production is forecast to increase to around 46.3 million tonnes, 1.2 per cent higher than 2012. Growth in production will be supported by increased output from China, India and the Middle East which is expected to offset further production decreases in OECD economies. Over the outlook period, world production is projected to increase at an average annual rate of around 4.4 per cent to total 59.2 million tonnes. Production is projected to continue growing in China, India and the Middle-East and lead to an eventual shift in shares of world production. In 2018 China is likely to remain the worlds largest aluminium producer; however projected robust growth in India, supported by the scheduled start-up of several new smelters will see it surpass Canada, the US and Australia to become the worlds third largest aluminium producer. Chinas aluminium production is projected to increase at an average annual rate of around 4.6 per cent over the outlook period to total 26 million tonnes in 2018. The increase is due to vertical integration of the production process through investments in power suppliers, and change in the central Government policy on new aluminium projects. In India, production is projected to increase at an average annual rate of around 14.4 per cent to total 3.8 million tonnes in 2018. The increase over the outlook period is supported by new smelters with large production capacities coming online to reach full capacity around 2016.
March 2013 77
Aluminium production is expected to increase in North America at an average annual rate of around 3.7 per cent over the outlook period to total 6 million tonnes. Projected lower energy costs associated with the emergence of abundant shale gas supplies are expected to improve the commercial viability of the US aluminium industry and support growth in production. Production of aluminium in the US is projected to increase at average annual rate of 2.6 per cent to total 2.5 million tonnes in 2018. Production in Canada is projected to increase at an average annual rate of 4.6 per cent to total 3.6 million tonnes in 2018, underpinned by new project start-ups. The Middle East is projected to increase production to 7.2 million tonnes over the outlook period at an average annual rate of around 8.9 per cent. Large scale capital investment in production facilities over the outlook period and access to cheap energy are expected to be the substantial drivers of the production increase. The Middle East region is projected to account for around 16 per cent of global primary production by 2018.
Australia
Production
In 201213, production in Australia is forecast to decrease by 6.5 per cent, relative to 201112, to total 1.8 million tonnes. The decrease is due to the closure of the Kurri Kurri smelter in New South Wales that removed around 177 000 tonnes of aluminium production from Australias production capacity. Alcoa is currently undertaking a review of their Point Henry smelter in Victoria. Operations are expected to continue to at least mid-2014 as a result of a Government industry assistance package by the Federal and Victorian Governments. In June 2012, the Victorian and Federal Government provided assistance to the Point Henry smelter in Victoria in the form of capital expenditure for repairs and maintenance of the smelter, investment in workplace skills and training, and additional undisclosed activities to improve competitiveness. These assistance measures are expected to remain in place until at least mid-2014. During 2012, Pacific Aluminium and the Tasmanian State Government were able to secure a power deal which provided for lower energy costs from Hydro Tasmania and resulted in a reduction in production costs for the Bell bay smelter. The deal provides for reduced energy costs to 2025. Due to the Government assistance provided (for the operations in Tasmania and Victoria) allowing on-going operations in these states to continue, no further smelter closures are forecast in the short term. However, higher production costs due to rising energy prices may result in minor production curtailments in 201213.
March 2013
Over the outlook period (201213 to 201718), Australias aluminium production is projected to decrease at an average annual rate of around 2.8 per cent to total 1.6 million tonnes in 201718. Government assistance, in the form of lower energy costs and capital injections, is assumed to continue over the outlook period. Nevertheless, an expected drop in total primary production is projected with no new aluminium smelters assessed as likely to start-up over the outlook period.
Exports
Forecast lower production in 201213 is expected to cause the volume of Australias aluminium exports to decrease 3 per cent, relative to 201112, to total 1.5 million tonnes. Export earnings are forecast to decrease 14 per cent to $3.3 billion (201213 dollars) due to a combination of lower export volumes and a lower Australian dollar aluminium price. Over the outlook period, Australian aluminium export volumes are projected to decrease at an average annual rate of around 2.1 per cent, from 201213, to around 1.5 million tonnes in 201718. The value of Australian aluminium exports is projected to decrease to $2.9 billion (in 201213 dollars) with lower export volumes offsetting projected price increases over the outlook period. Figure 2: Australias aluminium exports
2000 1750 1500 1250 1000 750 500 250 kt 1997-98 2001-02 volume 2005-06 2009-10 2013-14 2017-18 value (right axis) 8 7 6 5 4 3 2 1 2012 13 A$b
Sources: BREE; ABS.
March 2013 79
Alumina
Prices
Alumina spot prices decreased by around 16 per cent in 2012, relative to 2011, to reach US$325 a tonne (in 2013 dollars). In 2013 alumina spot prices are forecast to increase to around US$342 a tonne, a 5 per cent increase relative to 2012. The forecast increase is a result of growth in demand as higher global aluminium production translates into an increased requirement for alumina as an input into production. Over the outlook period the spot alumina price is projected to increase at an average annual rate of 2.5 per cent to around US$381 a tonne in 2018.
Australias alumina production

In 201213 Australias alumina production is forecast to increase by around 19 per cent, relative to 201112, to total 22.9 million tonnes. The commissioning of Rio Tinto Alcans Yarwun refinery near Gladstone is the principal driver of the increase and will add around 2 million tonnes of additional Australian alumina production capacity. Production at BHP Billitons Worsley refinery in Western Australia is expected to reach full capacity by the end of 201213 after completion of the 1.1 million tonne a year expansion. Pacific Aluminiums Gove refinery near Nhulunbuy will continue to operate after the Northern Territory Government agreed to release supplies of gas to power the refinery. The use of heavy oil as a fuel source was a major cost driver affecting the commercial viability of the Gove refinery which is now expected to remain open through the outlook period. Australias alumina production is forecast to increase by 3 per cent in 201314 to total 23.6 million tonnes. The ramping up of recent expansions to full capacity will be the principal source of this growth. Over the remainder of the outlook period from 201415 to 201718, no additional expansion projects are expected to start up and alumina production is forecast to remain stable at 23.6 million tonnes.
Australias alumina exports

Projected decreases in Australian aluminium production are expected to result in additional surplus alumina production being exported to growing Asian markets. Alumina export volumes are forecast to increase by 19 per cent in 201213, relative to 201112, to total 19.7 million tonnes. Over the outlook period (2013 to 2018), alumina export volumes are projected to increase to around 20.4 million tonnes based on an average annual rate of around 3.5 per cent.
March 2013
The value of Australias alumina exports is forecast to increase by around 14 per cent in 2012 13, relative to 201112, to total $6.1 billion dollars. Forecast higher export volumes and prices will both support this increase. Alumina export values are projected to increase to around $6.7 billion (in 201213 dollars) over the outlook period (201213 to 201718), with an average annual growth rate of 4.1 per cent.
Bauxite exports
Australian bauxite exports are projected to increase over the outlook period, underpinned by the expected start-up of new mines such as Cape Alumina Pisolite Hills mine (7 million tonnes per annum) and Rio Tintos South of Embley mine (22.5 million tonnes per annum). Bauxite export volumes are forecast to increase by around 6 per cent in 201213, to total 11.1 million tonnes. Exports volumes are projected to increase at an average annual rate of 9 per cent over the outlook period, to around 17.9 million tonnes in 201718. In 201213, Australias bauxite export earnings are forecast to increase by around 3 per cent, relative to 201112, to total $314 million dollars, supported by higher production. The increase in export values is projected to continue over the outlook period (2013 to 2018), with the value of bauxite exports increasing at an average annual rate of 6.0 per cent to around $434 million (in 201213 dollars). Figure 3: Australias alumina exports
25 20 15 10 5 Mt 1997-98 2001-02 2005-06 volume 2009-10 2013-14 2017-18 value (right axis) 10 8 6 4 2 2012 13 A$b
Sources: BREE; ABS.
March 2013 81
Table 1:
World
Aluminium and alumina outlook

unit 2011 2012 2013 f 2014 z 2015 z 2016 z 2017 z 2018 z
Production Primary aluminium Consumption Primary aluminium Closing stocks Primary aluminium b weeks consumption Prices World aluminium c nominal real d Alumina nominal spot real spot d
kt kt kt wks
44 568 42 398 6 999 8.6
45 782 44 327 7 860 9.2
46 340 46 162 8 037 9.1
49 533 49 216 8 355 8.8
52 571 52 259 8 667 8.6
55 149 54 947 8 868 8.4
57 744 57 636 8 976 8.1
59 254 59 262 8 968 7.9
US$/t USc/lb US$/t USc/lb US$/t US$/t
2 402 109 2 476 112 374 386 2010 11
2 017 91 2 055 93 319 325 2011 12
2 075 94 2 075 94 342 342 2012 13 f
2 137 97 2 116 96 385 381 2013 14 z
2 187 99 2 142 97 390 382 2014 15 z
2 255 102 2 181 99 389 376 2015 16 z
2 289 104 2 183 99 399 380 2016 17 z
2 315 105 2 178 99 405 381 2017 18 z
Production Primary aluminium Alumina Bauxite Consumption Primary aluminium Exports Primary aluminium Nominal value Real value e Alumina Nominal value Real value e Bauxite Nominal value Real value e Total value nominal Real value e
Australia
kt kt Mt kt kt A$m A$m kt A$m A$m kt A$m A$m A$m A$m
1 938 19 041 69 252 1 686 4 178 4 397 16 227 5 218 5 491 8 595 229 241 9 625 10 129
1 938 19 283 73 235 1 693 3 797 3 907 16 592 5 146 5 295 10 518 296 305 9 239 9 507
1 812 22 881 79 164 1 646 3 344 3 344 19 737 6 050 6 050 11 127 314 314 9 708 9 708
1 800 23 580 81 162 1 638 3 446 3 349 20 070 7 179 6 976 13 134 368 358 10 993 10 683
1 773 23 580 83 160 1 613 3 456 3 263 20 123 7 326 6 919 14 254 400 377 11 182 10 560
1 736 23 580 84 156 1 579 3 448 3 164 20 195 7 494 6 878 15 483 434 398 11 375 10 440
1 644 23 580 85 148 1 496 3 326 2 967 20 374 7 701 6 869 17 403 488 435 11 515 10 271
1 635 23 580 85 147 1 488 3 336 2 892 20 392 7 774 6 738 17 874 501 434 11 611 10 065
b Producer and LME stocks. c LME cash prices for primary aluminium. d In 2013 US dollars. e In 201213 Australian dollars. f BREE forecast. z BREE projection. Sources: BREE; ABARES; London Metal Exchange; World Bureau of Metal Statistics.
March 2013
Copper
Oliver Hough
Prices
In 2012 copper prices averaged US$8098 per tonne (in 2013 dollars), an 11 per cent decrease from the 2011 average price. In 2012 prices peaked at US$8650 before finishing 2012 at US$8046. Reported copper stocks at the end of 2012 remained at a similar level to the end of 2011 at 2.7 weeks of consumption. Copper prices are forecast to average around $US7778 a tonne in 2013, a decrease of 4 per cent compared to 2012. This forecast decrease in prices is the result of copper supply growing faster than copper consumption. The increase in supply will come from a number of large recently commissioned mines in Indonesia, Peru and Mongolia ramping up to full production in 2013. Copper consumption is forecast to grow, primarily in emerging economies, but by a lower amount than the increase in production. As a result, copper stocks are forecast to increase to 3.2 weeks of consumption in 2013. Figure 1: Quarterly copper prices
12000 10000 8000 6000 4000 2000 2013 US$/t 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Sources: BREE; LME.
For the outlook period (2013 to 2018), copper prices (in 2013 dollars) are projected to decrease to around US$6900 per tonne in 2016, as a result of increased production, and then recover to around US$7100 per tonne in 2018 due to projected higher demand growth. Stocks are projected to peak at 3.9 weeks of consumption in 2015 before declining to around 1.5 weeks of consumption in 2018.
March 2013 83
Figure 2: Annual Prices and Stocks

12000 10000 8000 6000 4000 2000 2013 US$/t 9.0 7.5 6.0 4.5 3.0 1.5 weeks of consumption
2002
2004
2006
2008
2010
2012 price
2014
2016
2018
stocks (right axis)
Sources: BREE, LME, WBMS
Consumption
In 2012, world copper consumption is estimated to have increased by over 5.5 per cent, compared with 2011, to total 20.5 million tonnes. Higher consumption was driven mainly by China which increased its consumption by 12 per cent to 8.8 million tonnes and accounted for around 43 per cent of world copper consumption in 2012. Copper consumption in other emerging economies also continued to grow in 2012. In particular, consumption increased by 13 per cent in India (454 thousand tonnes), 9 per cent in Brazil (457 thousand tonnes) and 73 per cent in Mexico (402 thousand tonnes). In the European Union, copper consumption decreased 7 per cent in 2012, relative to 2011, to total around 3.1 million tonnes, mainly due to lower consumption in Germany. Consumption in Japan and the Republic of Korea also decreased by 2 per cent and 3 per cent, respectively. In the US, consumption was 3 per cent higher in 2012, relative to 2011, to total 1.8 million tonnes. World consumption in 2013 is forecast to increase 4 per cent, relative to 2012, to around 21.4 million tonnes. Growth will continue to be supported by higher consumption in China and other emerging economies. Consumption in Europe, the US and other OECD countries is forecast to grow moderately and in some cases, decline. Over the outlook period (2013 to 2018) world copper consumption is forecast to grow at an average annual rate of 4.6 per cent to total around 26.6 million tonnes in 2018. Growth in copper consumption is expected to come primarily from emerging economies such as China and India. Consumption in some OECD countries is expected to recover as general economic conditions improve, but growth rates are projected to remain low over the outlook period.
March 2013
Copper consumption in China is projected to increase at an annual average rate of 6.7 per cent over the outlook period to total around 13 million tonnes in 2018. Robust growth in residential construction and electricity transmission networks will be the principal drivers of the increase in Chinas copper consumption. Based on projected growth rates, Chinas share of world copper consumption will increase from 43 per cent in 2012 to 49 per cent in 2018. Chinas 12th Five-Year Plan outlined targets and policies for 2011 to 2015 and included a planned urbanisation rate of 51.5 per cent and the building of an additional 36 million apartments for low income earners. Preparation for this rapid rate of shift and population increase in urban and industrial areas include plans to expand infrastructure by improving and increasing the size of electricity networks, transit systems and housing. Planned infrastructure improvements in China demand significant copper usage which is the underlying reason behind the large growth in demand for copper in China. This anticipated growth and demand is expected to continue for the outlook period and beyond. This demand is complemented by higher demand for electronic goods, and other durable goods that require copper and are supported by an emerging larger middle class. Over the outlook period, increased copper consumption is projected for other emerging economies such as India, Brazil, and Turkey. Consumption for these emerging economies, as in China, is projected to grow at average rates between 7 and 9 per cent out to 2018. This growth will be a result of increased demand for consumer durables, improvements to infrastructure and increased development of housing. India, in particular, is expected to implement large infrastructure upgrades over the outlook period to improve the reliability and extent of its electricity transmission networks. Copper consumption in Europe in 2013 is forecast to increase 0.7 per cent to total around 3.8 million tonnes; although higher than 2012, this is still below total consumption in 2011. Improved economic activity in Germany and the Russian Federation will underpin moderate growth in European consumption in 2013; however this will be mostly offset by decreased consumption in other European countries that are expected to have lower investment rates as a result of assumed low or negative growth.. For the remainder of the outlook period, copper consumption in Europe is projected to increase at an average annual growth rate of 1.5 per cent a year to total 4.2 million tonnes in 2018. Although projected to increase, copper consumption in Europe will remain lower than the high levels of the previous decade due to lower levels of housing construction and infrastructure investment, particularly in countries that currently have substantial sovereign debt issues to manage. Germany is projected to be the principal contributor to growth in Europes copper consumption in the medium term, supported by sustained growth in its export-focused manufacturing industries. In the US, copper consumption is projected to rise at an average annual rate of around 0.5 per cent over the outlook period to total 1.9 million tonnes in 2018. Eventual improvements in economic activity, particularly residential construction, manufacturing and fixed asset investment, will support moderate increases in copper consumption. As with Europe, copper consumption in the US is not projected to return to the high levels of the previous decade over the 2013 to 2018 outlook period.
March 2013 85
Production
Mine Production
In 2012, estimated global copper mine production increased by 4.7 per cent relative to 2011, to total 17 million tonnes. This increase is attributable primarily to mines in South America resuming production following the resolution of labour disputes. In addition, production from China and the Democratic Republic of Congo increased more than 25 per cent due to the commissioning of new mines, capacity expansions at existing mines and higher utilisation rates. In 2013 world copper mine production is forecast to have its largest increase since 2004 as a result of new mines starting or ramping up to full production across Asia, Africa, Oceania and Latin America. These include the Grasburg mine in Indonesia (750 000 tonnes capacity per year), Konkola copper mines in Zambia (380 000 tonnes capacity per year) and the Antapaccay mine in Peru (160 000 tonnes capacity per year). Turquoise Hill Resources Oyu Tolgoi mine (400 000 tonnes capacity per year) in Mongolia is expected to started commercial production in June 2013 after experiencing projects cost increases and disputes with the Government of Mongolia over the distribution of the mines earnings. These have also led to delays in feasibility studies for the second stage of development. World copper mine production is projected to increase at an average annual rate of 6 per cent to total around 24.4 million tonnes in 2018. This output growth will be driven by additional, large copper mines opening in Peru, Chile and Indonesia over the outlook period. Peru has the projected fastest average growth rate of mined copper between 2013 and 2018. Production is projected to increase at an average annual rate of 14 per cent to total 3 million tonnes by 2018. New mines scheduled to commence production during this period include Xstratas Las Bambas mine (up to 400 000 tonnes capacity per year), Monterrico Metals Rio Blanco mine (190 000 tonnes capacity per year), and Chinalcos Toromocho mine (250 000 tonnes capacity per year). Chile produced around 5.4 million tonnes of mined copper in 2012 and accounted for 32 per cent of total world production. Chiles copper production is projected to grow at an average annual rate of 1.5 per cent to total around 5.9 million tonnes by 2018. A number of large copper mines are also scheduled to start production within the outlook period including Codelcos Mina Minestro Hales mine (170 000 tonnes capacity per year), Pan Pacific Coppers Caserones mine (180 000 tonnes capacity per year), Tecks Quebrada Blanca Phase 2 expansion (200 000 tonnes capacity per year), and the KGHM-Sumitomo Sierra Gorda mine (227 000 tonnes capacity per year).
March 2013
Refined Production
World production of refined copper in 2013 is forecast to increase 5.6 per cent, relative to 2012, to 21.6 million tonnes. This increase is driven primarily by China, which accounts for almost half of the additional production in 2013. Chinas production of refined copper is forecast to increase 9 per cent, to total 6.4 million tonnes. This expansion is primarily due to 3 refineries increasing their capacity, Shandong Fangyuan (additional 100 000 tonnes per year), Guangxi Wuzhou (additional 100 000 tonnes per year) and Daye/Hubei (additional 200 000 tonnes per year). A number of small solvent extraction-electrowinning (SX-EW) - a process that involves leeching of copper from the soil into solvents and then depositing the copper onto cathodes through an electrolyte process - refineries in Africa (Zambia and Democratic Republic of Congo) and Mexico are also expected to start-up and support higher refined copper production in 2013. Over the remainder of the outlook period, world refined copper production is projected to increase at an average annual rate of about 3 per cent, to total 26 million tonnes in 2018. China is expected to be the main contributor to growth in world refined copper production with its share of total world production increasing from 29 per cent in 2012 to 32 per cent in 2018. Indias production of refined copper is also projected to increase substantially over the period, growing at an average annual rate of 10 per cent to total 1.2 million tonnes in 2018. Previously anticipated growth in SX-EW technology within Chile has slowed, however, there is still growth anticipated in other Latin American countries (Mexico and Peru) and Africa (Zambia and Democratic Republic of Congo).
Australia
Production
Australian copper mine production in 201213 is forecast to increase 8 per cent, relative to 201112, to total around 1 million tonnes. Forecast higher production is expected to come mainly from Western Australia as the recently commissioned Sandfire Resources DeGrussa mine (77 000 tonnes capacity per year) ramps up to full production. Copper mine production in Australia for 201314 is forecast to increase by 14 per cent, relative to 201213, to total 1.1 million tonnes. Additional production is forecast to come from various mines across Australia increasing their production rates. This includes MMG Limiteds Golden Grove mine focussing on copper, Sandfire Resources DeGrussa mine ramp up to full capacity, Ernst Henry underground expansion ramp up (50 000 tonnes capacity per year) and Newcrests Cadia Valley mine which includes the old Cadia Hill, Cadia East and Ridgeway mines increasing production.
March 2013 87
In the medium term, Australian copper mine production is projected to increase at an average annual rate of 4.4 per cent to total around 1.2 million tonnes in 201718. Average annual growth out to 201516 is projected to average 4.5 per cent to total 1.2 million supported by anticipated production from Pilbara VMS. Production is projected to decline after 201516 due to a change of focus from copper to magnetite at IMX Resources Cairn Hill mine and scheduled scale down of Sandfire Resources DeGrussa mine. Unlike other major copper producing countries, Australias does not currently have large copper projects (capacity of over 100 000 tonnes per year) under development that are likely to start-up during the outlook period. BHP Billitons Olympic Dam expansion project was postponed in 2012 to consider more cost effective development options. The project may still proceed in a different form, but production from the expansion is not expected to start until after 2018. Australian production of refined copper in 201213 is expected to decrease relative to 201112 by 5.5 per cent, to total to 459 000 tonnes. This decrease is due power outages disrupting output at Olympic Dam and also at the Port Pirie refinery. Production at Xstratas Townsville refinery has also been lower than expected due to lower concentrate production at the Ernest Henry mine and lower planned processing of oxide ores at the Tintaya mine which is approaching the end of its mine life. In 201314, Australian production of refined copper is forecast to increase by 9 per cent, to total 500 000 tonnes. This will be supported by Olympic Dam returning to full production following power outages in 201213, and the Townsville refinery forecast production returning to capacity. Over the outlook period, Australias refined copper production is projected to decrease to 221 000 tonnes in 201718 as a result of the Townsville copper refinery closing at the end of 2016. Higher than expected development costs for Ivanhoe Australias Mt Dore SX-EW operation has delayed the only new planned SX-EW refining capacity in Australia.
Exports
In 201213, the volume of Australian copper exports (in metallic content) are forecast to increase 3 per cent, relative to 201112, to total 951 000 tonnes. This increase will be supported by higher exports of copper ores and concentrates, but will be partly offset by lower levels of refined exports. Australias copper export earnings are forecast to decrease 3 per cent in 201213 to around $8.6 billion. Forecast lower copper prices received by Australian producers are expected to offset the projected increase in copper export volumes. The value of Australias copper exports are forecast to rebound 11 per cent in 201314 to total $9.5 billion (in 201213 dollars). This will be the result of a forecast 10 per cent increase in the volume of Australias copper exports (by metallic content). Over the remainder of the outlook period, the volume of Australias copper exports is projected to increase at an annual average rate of 2.3 per cent to total 1.3 million tonnes in 201718. In 201718, the value of Australias copper exports is projected to remain broadly consistent with 201314, in real terms, with higher export volumes offsetting lower real prices.
March 2013
Figure 3:
1800 1500 1200 900 600 300 kt 1997-98
Australias copper exports

12 10 8 6 4 2 2012 13 A$b 2001-02 2005-06 volume 2009-10 2013-14 2017-18 value (right axis)
Source: BREE, ABS
Table 1:
World
Copper outlook
unit 2011 16 245 19 791 19 481 985 2.6 8 852 401.5 9 126 413.9 2010 11 kt kt kt kt A$m A$m 952 485 1 750 375 8 422 8 863 2012 17 019 20 424 20 549 1 078 2.7 7 948 360.5 8 098 367.3 2011 12 926 486 1 814 395 8 501 8 748 2013 f 18 053 21 571 21 396 1 252 3.0 7 788 353.2 7 788 353.2 2012 13 f 1 001 459 2 146 372 8 562 8 562 2014 z 19 011 22 355 22 279 1 328 3.1 7 575 343.6 7 498 340.1 2013 14 z 1 144 500 2 383 404 9 734 9 460 2015 z 21 259 23 674 23 273 1 729 3.9 7 075 320.9 6 931 314.4 2014 15 z 1 186 501 2 536 405 9 738 9 197 2016 z 22 859 24 082 24 340 1 471 3.1 7 225 327.7 6 988 317.0 2015 16 z 1 204 491 2 640 396 9 434 8 659 2017 z 23 701 25 316 25 452 1 335 2.7 7 475 339.1 7 131 323.5 2016 17 z 1 195 311 3 273 251 10 391 9 269 2018 z 24 386 26 044 26 631 748 1.5 7 625 345.9 7 175 325.5 2017 18 z 1 197 221 3 614 178 11 027 9 558
Production mine refined Consumption Closing stocks weeks consumption Price LME nominal real b
kt kt kt kt wks US$/t USc/lb US$/t USc/lb
Australia
Mine output Refined output Exports ores and conc. c refined Nominal value Real value d
b In 2013 US dollars. c Quantities refer to gross weight of all ores and concentrates. d In 201213 Australian dollars. f BREE forecast. z BREE projection. Sources: BREE; ABARES; Australian Bureau of Statistics; International Copper Study Group; World Bureau of Metal Statistics.
March 2013 89
Nickel
Simon Cowling
Prices
Nickel spot prices averaged US$17 835 a tonne in 2012 (in 2013 dollars), 23 per cent lower than 2011 (see Figure 1). Lower prices through the year were underpinned by higher production of refined nickel and rising nickel stocks. Prices peaked in February at around US$21 393 a tonne before gradually decreasing to around US$14 734 a tonne in August 2012 and finishing the year at US$17 085 a tonne. Figure 1: Quarterly nickel prices
60000 50000 40000 30000 20000 10000 2013 US$/t 1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Sources: BREE; LME.
The average spot price of nickel is forecast to decrease around 2.3 per cent in 2013 to US$17 586 a tonne. Weak business sentiment is expected to keep nickel prices low, although the volatility that has characterised nickel prices in recent years may at times push prices to higher levels for short periods of time. Nickel stocks which are forecast to increase to 7.8 weeks of consumption in 2013 (see Figure 2). The nickel spot price is projected to increase over the outlook period (2013 to 2018) at an average annual rate of 2.5 per cent to around US$20,728 (in 2013 dollars) in 2018. Projected demand growth, underpinned by increased construction activity in China and India, and rising industry supply costs will support higher prices over the medium term. Global stocks are projected to decrease marginally over the outlook period (2013 to 2018) as the increase in nickel consumption outpaces increases in refined production, supporting slightly higher prices (see Figure 2). New nickel refineries in Asia, Africa and South America (including full production at Ona Puma) are scheduled to start up over the outlook period to provide for the growing demand.
March 2013
Figure 2: Annual nickel prices and stocks

50000 40000 30000 20000 10000 2013 US$/t 15 12 9 6 3 weeks of consumption
1998
2000
2002
2004
2006
2008
2010
2012 price
2014
2016
2018
stocks (right axis)
Sources: BREE; INSG; LME.
Consumption
In 2012, world nickel consumption is estimated to have increased around 3 per cent, relative to 2011, to total 1.7 million tonnes. Consumption decreases in the European Union associated with the onset of Government austerity measures were offset by growth in emerging Asian economies, particularly China and India. Consumption in China increased 9 per cent (770 000 tonnes in total) and in India increased 24 per cent (43 000 tonnes in total), supporting a total demand increase in Asia of around 5 per cent to 1.1 million tonnes. Total European Union consumption decreased by 1 per cent relative to 2011, to total 331 000 tonnes in 2012, underpinned by a 5 per cent fall in demand by the European Unions largest consumer, Germany. Consumption in the US increased by around 2 per cent to total 136 000 tonnes in response to higher steel production. World nickel consumption is forecast to increase to around 1.7 million tonnes in 2013, an increase of 3 per cent relative to 2012. Growth in nickel demand will be underpinned by growing world steel production, particularly in emerging economies such as China, with a forecast 5 per cent increase in demand to 810 000 tonnes, and India, with a forecast 12 per cent increase to 48 000 tonnes. Consumption in Japan is forecast to increase by around 8 per cent compared to 2012 to total 145 000 tonnes in 2013. The US is forecast to increase consumption by 2 per cent to total 138 000 tonnes. In the Republic of Korea, consumption is forecast to increase to 83 000 tonnes, an increase of around 3 per cent relative to 2012. However, consumption in the European Union is forecast to decrease by 3 per cent in 2013, relative to 2012, and to total 320 000 tonnes.
March 2013 91
Over the outlook period (2013 to 2018), world nickel consumption is projected to increase at an average annual rate of 3 per cent to around 1.9 million tonnes in 2018. Consumption in emerging economies is projected to continue growing at a faster rate than developed economies as a result of substantially higher rates of fixed capital investment and growth in steel production. Over the outlook period (2013 to 2018), nickel consumption in China is projected to increase at an average annual rate of around 3 per cent to total around 905 000 tonnes. Projected robust growth in steel consumption to support infrastructure construction and housing investment will lead to higher consumption of nickel. The use of nickel pig iron (NPI) is projected to make up a proportion of the nickel consumed in China. NPI is a ferronickel pig iron produced by smelting low grade nickel ores (often nickel laterite) as a substitute for conventional refined ferronickel (2540 per cent nickel). Estimates of the amount of NPI projected to be used are uncertain, and will be affected by global nickel supply and price swings. Indias nickel consumption is projected to increase over the period to support its projected growth in steel production. Nickel consumption is projected to grow over the outlook period at an average annual rate of 7 per cent, the fastest demand growth of any economy, to total 65 000 tonnes by 2018. Projected growth in the US construction and steel sectors associated with assumed improvements economic conditions, will support higher nickel consumption in the US. Over the outlook period, consumption in the US is projected to increase at an average annual rate of 1 per cent to total 142 000 tonnes in 2018. Consumption demand in Europe is forecast to increase over the outlook period at an average annual rate of 2 per cent to total 405 000 tonnes by 2018. The main contributor to growth in Europe will be Germany where nickel consumption is projected to increase at an average annual rate of 3 per cent to around 103 000 tonnes. Consumption in the United Kingdom is projected to increase to 26 000 tonnes in 2018, at an average annual rate of around 2 per cent. Ongoing sovereign debt challenges and austerity programs are key downside risks to increased European consumption.
Mine production
Mined nickel production increased to around 2 million tonnes in 2012, an increase of 5 per cent compared to 2011. Curtailment of production in the European Union due to increased production costs and depressed demand were offset by increased production in Indonesia and the Philippines. Indonesia increased production by 13 per cent to total 335 000 tonnes, with the Philippines increasing its output by 11 per cent to total 305 000 tonnes. In both countries, higher production has supported increased exports of laterite ore to China.
March 2013
Production in the European Union decreased around 24 per cent, relative to 2011, to total 44 000 tonnes with the principal driver reduced production at the Talvivaara mine in Finland due to natural weather occurrences and then environmental concerns. Increased production costs and lower prices also led to mine closures and suspensions in Canada where mine production decreased 7 per cent to total 203 000 in 2012. In 2013, world nickel production is forecast to increase to around 2.1 million tonnes, 0.6 per cent higher than 2012. A ramp up in production at Skerritt Internationals joint venture Ambotovy mine in Madagascar (60 000 tonnes), restart of full production at the Talvivaara mine in Finland and start-up of First Quantums Kevista project (10 000 tonnes), also in Finland, are expected to offset forecast lower production in Australia. Over the outlook period, world nickel production is projected to increase at an average annual rate of around 2 per cent to 2.3 million tonnes. New mines in Canada, and the Philippines, underpin the growth in production. Ramp up at Skerritt Internationals joint venture Ambotovy mine in Madagascar is projected to underpin the increased production from Africa over the outlook period. Production in Asia is projected to increase at an average annual rate of 2 per cent between 2013 and 2018 to total 812 000 tonnes. Increased production in Indonesia and the Philippines, generated from laterite reserves, are projected to underpin the increase in production. Supporting higher production in Asia will be PT Vale Indonesias Sulawesi mine expansion in Indonesia (47 000 tonnes), and the CTP Construction and Mining Corporations Adlay Cagdianao Tandawa mine (30 000 tonnes) in the Philippines. A large percentage of the mine production from these emerging economies is projected to be exported to China for refinement. Production in Europe is projected to increase at an average annual rate of around 1 per cent in the medium term to total 367 000 tonnes in 2018. Finland will be the main driver of growth due to the ramp-up of production at the First Quantum Kevista mine (initial capacity 10 000 tonnes with a view to increase to 15 000 tonnes).
Refined production
Production of refined nickel increased to around 1.7 million tonnes in 2012, 9 per cent higher than 2012 as a result of higher production in Brazil, Colombia, China and Australia. These increases offset lower refined production in Europe which decreased by 2 per cent, relative to 2011, to total 516 000 tonnes. Production in China increased by 19 per cent, relative to 2011, to total 520 000 tonnes. This made China the largest refined nickel producer in the world with a market share of 30 per cent. World refined nickel production is forecast to be more or less unchanged compared to 2012, and to total 1.7 million tonnes in 2013. A production ramp up at the Skerritt Internationals joint venture Ambatovy (60 000 tonnes) refinery in Madagascar, increased demand for nickel in China as a production input for stainless steel and expansion of the Niihama plant in Japan (30 000 tonnes) are forecast to be the main drivers behind the increase. The on-going shut down of the Vale Ona Puma refinery in Brazil due to smelter problems, and curtailments in Australian production are forecast to offset these production increases.
March 2013 93
Over the outlook period, refined production is projected to increase at an average annual rate of 2 per cent to total 1.9 million tonnes in 2018. The restart of the Ona Puma mine and continued production from the Ambatovy refinery, in addition to start-up of the second POSCO plant in the Republic of Korea (24 000 tonnes), are projected to support these higher volumes. China is projected to remain the largest contributor to global refined production in the medium term. Its refined nickel production is projected to increase to 555 000 tonnes in 2018 at an average annual rate of around 1 per cent. The start-up of the Jinchuan Fangchengang smelter and refinery (30 000 tonnes) is assumed to be a main driver of this growth. Supply of refined production materials for China is projected to come from laterite deposits in Indonesia and the Philippines. The use of nickel pig iron within China for stainless steel production is projected to continue over the outlook period. Production in South America is projected to increase at an average annual rate of 2 per cent over the outlook period to total 90 000 tonnes in 2018. The increase is driven by the assumed restart of Vales Ona Puma nickel project in Par, Brazil following the shutdown of operations in June 2012. Production of nickel is not projected to restart until the first half of 2014. Production in Europe is projected to decrease between 2012 and 2018 at an average annual rate of 0.2 per cent and to total 509 000 tonnes. No new refineries are projected to start-up over the outlook period due to limited demand growth and rising production costs. Some production ramp ups at European refineries are projected over the outlook period, but these will not be enough to offset projected production curtailments in other European countries.
Australia
Production
Mined nickel production in Australia during 201213 is estimated to decrease 3 per cent, relative to 201112, to total 229 000 tonnes. The decrease is due to a 30 per cent reduction in output at Nickel Wests Mt Keith mine and Xstrata Nickel Australia placing its Cosmos mine on care and maintenance. In 201314, mined nickel production in Australia is forecast to decrease by a further 6 per cent, compared to 201213, to total 216 000 tonnes. This decrease is forecast to be underpinned by an ongoing 30 per cent reduction at Nickel Wests Mt Keith mine. In the medium term, from 201314 to 201718, Australian mine production is projected to increase at an average annual rate of 2 per cent to around 265 000 tonnes. The projected opening of Norlisks Honeymoon Well mine later in the outlook period is projected to offset production decreases within Australia due to increased production costs and depleted ore bodies. The Honeymoon Well mine is projected to provide around 24 000 tonnes of nickel ore when opened and operating at full production.
March 2013
Refined production
Refined production in Australia during 201213 is forecast to increase 2 per cent, relative to 201112, to total 124 000 tonnes. Higher production from Minara Resources Murrin Murrin refinery in Western Australia following technological and engineering improvements will be the main source of this growth. Output at First Quantums Ravensthorpe mine in Western Australia is forecast to increase in 201213 as a result of a ramp-up in production. Refined nickel production at Nickel Wests Kwinana refinery is forecast to remain around 201112 levels. Production of intermediate product from Nickel Wests Kalgoorlie smelter is expected to decrease by around 65 per cent compared to 201112, to total 17 000 tonnes. This decrease will be underpinned by an estimated on-going shift by Nickel West to concentrate production operations on the higher added value refined nickel. Over the outlook period (201213 to 201718), refined nickel production is projected to remain relatively stable and to total 125 000 tonnes in 201718. The projected increase is a result of increasing efficiencies and no new refineries are anticipated to start up during the period. Higher energy, labour and operating costs are a downside risk, and could result in production curtailments across the outlook period.
Exports
Forecast higher production of refined nickel in 201213 is expected to support higher volumes of Australian nickel exports which are forecast to increase 2 per cent, relative to 201112, to around 246 000 tonnes (see Figure 3). The growth over 201112 is underpinned by increased production in 201213 of refined nickel at Minara Resources Murrin Murrin refinery in Western Australia. Export earnings are forecast to decrease 12 per cent to $3.3 billion (201213 dollars) due to a lower forecasted Australian dollar nickel price in 201213. Australian nickel export volumes are projected to increase at an average annual rate of around 2 per cent to total 276 000 tonnes in 201718. The increase will be supported by the Ravensthorpe project ramping up to full production and the projected start-up of the Honeymoon Well mine late in the outlook period. The value of Australian nickel exports is projected to increase at an average annual rate of 2 per cent to $4.7 billion (in 201213 dollars) in 201718, supported by increased mine production and a higher real Australian nickel price over the outlook period.
March 2013 95
Figure 3: Australian nickel exports

300 250 200 150 100 50 kt 1997-98 2001-02 2005-06 volume 2009-10 value (right axis) 2013-14 2017-18 12 10 8 6 4 2 2012 13 A$b
Sources: BREE; ABS.
Table 1: Nickel outlook

unit Production mine kt refined kt Consumption kt Stocks kt weeks consumption Price LME nominal US$/t Usc/lb real b US$/t Usc/lb 2011 1 932 1 613 1 607 172 5.6 22 854 1 037 23 560 1 069 2010 11 Production mine cs refined intermediate Export volume ds Export value nominal s real es 2012 2 034 1 750 1 661 217 6.8 17 505 794 17 835 809 2011 12 2013 f 2 048 1 754 1 715 256 7.8 17 586 798 17 586 798 2012 13 f 2014 z 2 110 1 782 1 784 254 7.4 18 932 859 18 741 850 2013 14 z 2015 z 2 160 1 821 1 833 242 6.9 20 282 920 19 870 901 2014 15 z 2016 z 2 219 1 873 1 872 243 6.8 20 925 949 20 240 918 2015 16 z 2017 z 2 273 1 907 1 903 247 6.7 21 436 972 20 450 928 2016 17 z 2018 z 2 295 1 917 1 938 226 6.1 22 028 999 20 728 940 2017 18 z
World
Australia
kt kt kt kt A$m A$m
195 101 60 210 4 096 4 311
236 122 70 240 4 056 4 174
229 124 51 246 3 321 3 321
216 122 48 238 3 883 3 774
233 126 48 251 4 419 4 173
238 126 47 252 4 617 4 238
251 127 54 263 4 949 4 415
265 125 64 276 5 381 4 665
b In 2013 US dollars. c Nickel content of domestic mine production. d Includes metal content of ores and concentrates, intermediate products and nickel metal. e In 201213 Australian dollars. f BREE forecast. s BREE estimate. z BREE projection. Sources: BREE; ABARES; Australian Bureau of Statistics; International Nickel Study Group; London Metal Exchange; World Bureau of Metal Statistics.
March 2013
Zinc
Adam Bialowas
Prices and stocks

In 2012, zinc prices decreased by 12 per cent relative to 2011, to average US$1984 a tonne (in 2013 dollars (see Figure 1). Downward pressure was placed on prices throughout the year by on-going economic uncertainty in the Eurozone and an easing of economic growth in China. These factors reduced global zinc demand in 2012, and led to an increase in global stocks. Zinc stocks, already at high levels, rose to an equivalent of 9 weeks of global consumption at the end of 2012. Figure 1: Quarterly zinc prices
5000 4500 4000 3500 3000 2500 2000 1500 1000 500 2013 US$/t 1992 1992 1992 1992 1992 1992 1992 1992 1992 1992 2012
Sources: BREE; LME.
The price of zinc is forecast to average around US$1983 in 2013, more or less unchanged from 2012. This result is underpinned by forecast higher consumption in China and OECD nations as a result of an assumed improvement in economic conditions. Forecast growth in global refined zinc production in 2013 is expected to result in stocks increasing to 10.3 weeks of consumption.
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Over the remainder of the outlook period, the price of zinc is projected to increase at an average annual rate of 5 per cent to average US$2588 (in 2013 dollars) in 2018. The price of zinc is projected to rise in response to an emerging imbalance in the underlying fundamentals of the zinc market. Global zinc consumption is projected to increase at an average annual rate of 5 per cent between 2014 and 2018. Over the same period refined zinc production is projected to grow at an average annual rate of 3 per cent. At these rates of growth the zinc market is expected approach balance by 2015 before moving into deficit from 2016. Over the second half of the outlook period, it is assumed that the global demand for zinc will be met by the drawing down stocks which are projected to decrease to 4 weeks of consumption, down from a peak of 11 weeks of consumption in 2014. Figure 2:
4000
Annual zinc prices and stocks

16
3000
12
2000
1000
2013 US$/t
2002
2004
2006
2008
2010
2012
2014 price
2016
2018
weeks of consumption
stocks (right axis)
Sources: BREE; LME.
Consumption
In 2012, world zinc consumption is estimated to have decreased by 3 per cent relative to 2011 to total 12.4 million tonnes. This decrease was evenly distributed between OECD European countries and China. European demand for zinc in 2012 declined 7 per cent, relative to 2011, to total 2.4 million tonnes as on-going sovereign debt issues and austerity measures limited investment and manufacturing activity that supports zinc consumption. In China, a slowdown in economic growth in 2012 led to zinc consumption decreasing by 3 per cent in 2012, relative to 2011, to total 5.3 million as a result of lower Chinese production of refined zinc.
March 2013
World zinc consumption is expected to return to growth in 2013, with demand forecast to increase by 6 per cent relative to 2012 and to total 13.1 million tonnes. China is expected to generate much of this growth. Announced spending on infrastructure projects and higher demand for consumer goods are forecast to support a 7.5 per cent increase in zinc consumption, relative to 2012, and to total 5.7 million tonnes. At this level of consumption, China alone will account for around 43 per cent of global zinc demand, almost doubling its share of the market relative to 2003 (see Figure 3). In OECD economies, increased consumption in 2013 is forecast to come from the Republic of Korea as improving economic conditions in export markets, such as the US, increase the demand for zinc-intensive exports such as automobiles. In the US, a recovering economy and an improving housing market are forecast to result in a 2 per cent increase in zinc demand, relative to 2012, to total 918 000 tonnes. Over the remainder of the outlook period (20142018) refined zinc consumption is projected to increase at an average annual rate of 5 per cent a year to total 16.8 million tonnes in 2018. Increased consumption of refined zinc is expected to be driven primarily by higher zinc demand in emerging economies. Within these economies, the building of infrastructure needed to support expansion of the industrial base requires zinc intensive materials. Around half of all world zinc consumption occurs through galvanising, an anticorrosive coating for steel. Galvanised steel is extensively used in structural applications such as telecommunications and electricity infrastructure, housing, railways, and bridges. Zinc based alloys are also widely used in the manufacturing industry for the production of household appliances, electronics, and automobiles. Chinas consumption of refined zinc is projected to increase at an average annual rate of 8 per cent over the outlook period to total 8.2 million tonnes in 2018. Underpinning this growth are the central Governments policy commitments in the 12th Five-Year plan (20112015) that include the expansion of its electricity and telecommunication distribution infrastructure, large scale construction of accommodation for low-income households in urban and rural areas, and initiatives to increase rail capacity by up to 30 000 kilometres by 2020.
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Figure 3: Shares of world zinc consumption

2003
China 22% Asia ex-China 25% Europe 28% United States 12% Other America 8% Oceania 3% Africa 2%
2013
China 43% Asia ex-China 22% Europe 18% United States 7% Other America 7% Oceania 2% Africa 1%
Sources: BREE; ILZSG.
Indias consumption of refined zinc is projected to increase at an annual average rate of 6 per cent and to total 880 000 tonnes by 2018. Starting from a low base, this growth path will have India emerge as the worlds third largest consumer of zinc behind China and the US by 2018. Supporting this growth are expected expansions in Indias road and rail networks as well as investment to increase and modernise power generation and transmission infrastructure. Additionally, an emerging middle class in India will increase demand for other zinc intensive products such as automobiles and other consumer durables. Zinc consumption in OECD economies is expected to grow at an annual average rate of around 3 per cent to total 5.3 million tonnes by 2018. In the US, zinc consumption is forecast to grow at an average annual rate of 3 per to total 1.1 million tonnes by 2018. This growth will be supported by assumed improved economic conditions that will increase the purchases of consumer durables as well as a recovery in the housing market. In the Republic of Korea, demand for zinc is forecast to increase at an average rate of 4 per cent per year to total 725 000 tonnes by 2018. In general, however, demand for zinc in OECD nations will increase at a lower rate than for emerging economies due to the already high existing level of zinc intensive infrastructure in developed economies.
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Mine production
In 2012, world zinc mine production is estimated to have increased by 5 per cent, relative to 2011, to total 13.6 million tonnes. Much of this growth occurred in China where its mine production increased 14 per cent in 2012, relative to 2011, to total 4.9 million tonnes. In Canada, new mines commissioned in 2012, such as Hudbay Minerals Lalor mine (35 000 tonnes), Nyrstars Langlois mine (35 000 tonnes) and Trevali Minings Halfmile Lake (55 000 tonnes) offset declining production from existing mines. In 2013, world zinc mine production is forecast to increase by 3 per cent relative to 2012 to total 14 million tonnes. The largest mines expected to commence operations in 2013 are Xstratas Bracemac-McLeod mine (90 000 tonnes) and Blackthorn Resources and Glencores Perkoa mine (95 000 tonnes) in Burkina Faso. There are a number of additional mines scheduled to start-up in 2013, although most are substantially smaller with production capacities of less than 50 000 tonnes per annum. Production will also be supported by mines which commenced in 2012 as they ramp up towards full capacity. Partially offsetting this growth will be the closure of Xstratas Brunswick and Perseverance mines in Canada which are both scheduled to cease operations in early 2013. Over the remainder of the outlook period world zinc mine production is expected to increase at an average annual rate of 2.5 per cent to total 15.8 million tonnes by 2018. Higher production will be supported by new operations in a range of countries. In the Russian Federation, zinc mine production is expected to increase as a result of the development of East Siberian Metals Ozernoye mine (350 000 tonnes). This is the largest project which is expected to be completed over the outlook period. After declining in response to the closure of two large mines in 2013, Canada zinc production is expected to increase with the commissioning of new projects, including Xstratas Hackett River mine (250 000 tonnes), Canadian Zincs Prarie Creek mine (50 000 tonnes) and Chieftain Metals Tulsequah Chief mine (40 000 tonnes). In Australia, new production from MMGs Dugald River (230 000 tonnes) and Xstratas McArthur River expansion (200 000 tonnes) are expected to offset the closure of MMGs Century mine. Offsetting the increased production from new mines are a number of closures of large zinc mines. Major zinc mines scheduled to close over the outlook period as their reserves are economically exhausted include MMGs Century mine (500 000 tonnes) in Australia, Vedanta Resources Lisheen mine (170 000 tonnes) in Ireland and the Skorpion (170 000) mine in Namibia.
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Refined production
In 2012 world refined zinc production is estimated to have fallen by 4 per cent, relative to 2011, and to total 12.7 million tonnes. Production was lower primarily as a result of a decrease in Chinese refined zinc production where smelters reduced production in response to weaker global demand for refined zinc. This is the first decrease in Chinese refined zinc production in over 20 years. Refined zinc production is forecast to recover in 2013, increasing by 6 per cent to total 13.5 million tonnes. This will be supported by an expected increased utilisation rate in China as well as increased capacity due to the commissioning of new smelters. While much of the additional smelting capacity has occurred in China in recent years, in 2013 increased refined zinc production is expected in the US (160 000 tonnes), the Republic of Korea (180 000 tonnes) and Peru (80 000 tonnes). Over the outlook period, world refined zinc production is projected to increase at an average annual rate of 3 per cent to total 15.9 million tonnes. The majority of this increased production is from new capacity that is expected to come from China which currently has over ten zinc smelter projects either currently committed or under consideration. Over the outlook period Chinas share of world refined zinc production will increase from 38 per cent in 2012 to 41 per cent by 2013. Outside of China, increases in refinery capacity will tend to be the result of expansions to existing operations rather than from new smelters.
Australia
Australian zinc mine production in 201213 is forecast to decrease by 3 per cent relative to 201112 to total 1.5 million tonnes. This decrease can be attributed to recent zinc mine closures including Bass Metals Hellyer mine (25 000 tonnes) and Kagaras Mt Garnet (40 000 tonnes) and Thalanga (15 000) mines. Reduced production from MMGs Century mine due to a major scheduled maintenance outage will also contribute to lower domestic zinc production. These decreases are expected to outweigh production from new mines expected to ramp up production in 201213. These include CBH Resources Rasp mine (34 000 tonnes) as well as Xstratas Lady Loretta (126 000 tonnes) and George Fisher mines (64 000 tonnes). Consequently, Australias refined zinc production is forecast to remain virtually unchanged in 201213 at 504 000 tonnes. In 201314, Australian zinc mine production is forecast to increase by 10 per cent to 1.7 million tonnes. New production is expected to come from the expansion of Xstratas McArthur River operation (200 000 tonnes) and additional production at Xstratas George Fisher and Lady Loretta mines. Over the outlook period Australian zinc mine production is projected to peak in 201415 at 1.8 million tonnes. This level of production will be supported by new mines including TriAusMins Woodlawn operation (22 000 tonnes), YTC Resources Hera mine (10 000 tonnes) and by Xstratas McArthur River Phase 3 expansion when they reach full production levels. Australian zinc mine production is projected to decrease over the remainder of the outlook period due
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to MMGs Century mine (500 000 tonnes) winding down production before ceasing operations in 201617. This decrease will be partially offset by new production by MMGs Dugald River mine (200 000 tonnes) which is due to commence production in 2016. By 201718 Australian zinc mine production is forecast to be 1.6 million tonnes. Australian refined zinc production is projected to remain at around 504 000 tonnes as no major expansion or new refineries are scheduled to commence over the outlook period. In 201213, Australian zinc exports (total metallic content) are forecast to decline by 7 per cent compared with 201112, to total 1.5 million tonnes, as the result of recent mine closures. Over the remainder of the outlook period, export volumes are projected to peak in 201415 at 1.8 million tonnes. By 201718 Australian exports of zinc are projected to total 1.6 million tonnes. In 201213, Australian export earnings from zinc are expected to decrease by around 6 per cent, relative to 201112, to total $2.1 billion, as a result of lower domestic production. In 201718, Australian export earnings are projected to total $2.6 billion (in 201213 dollars) with projected substantially higher zinc prices sufficient to offset the effect of lower export volumes. Figure 4: Australias zinc exports
2000 6.0
1500
4.5
1000
3.0
500
1.5 2012-13 A$b 2017-18
kt 1997-98 2001-02 2005-06 volume 2009-10 value (right axis) 2013-14
Sources: BREE, LME
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Table 1: Zinc outlook

unit World Production mine kt refined kt Consumption kt Closing stocks kt wks weeks consumption Price nominal US$/t USc/lb real b US$/t USc/lb 2011 12 948 13 120 12 769 1 769 7.2 2 191 99 2 258 102 2010 11 1 479 499 2 317 410 1 494 2 373 2 497 2012 13 604 12 660 12 394 2 195 9.2 1 947 88 1 984 90 2011 12 1 567 505 2 382 456 1 572 2 292 2 358 2013 f 13 959 13 479 13 090 2 584 10.3 1 983 90 1 983 90 2012 13 f 1 522 504 2 242 431 1 480 2 071 2 071 2014 z 14 284 14 065 13 674 2 975 11.3 2 031 92 2 011 91 2013 14 z 1 677 504 2 571 437 1 643 2 400 2 332 2015 z 14 820 14 512 14 389 3 098 11.2 2 156 98 2 112 96 2014 15 z 1 845 504 2 929 438 1 812 2 738 2 586 2016 z 15 107 14 894 15 153 2 839 9.7 2 388 108 2 309 105 2015 16 z 1 769 504 2 769 438 1 736 2 847 2 613 2017 z 15 438 15 411 15 967 2 282 7.4 2 488 113 2 373 108 2016 17 z 1 711 504 2 642 436 1 675 2 941 2 623 2018 z 15 776 15 905 16 825 1 362 4.2 2 750 125 2 588 117 2017 18 z 1 622 504 2 453 436 1 586 2 967 2 572
Australia Mine output kt Refined output kt Exports ore and conc. c kt refined kt total metallic content kt Total value nominal A$m real d A$m
b In 2013 US dollars. c Quantities refer to gross weight of all ores and concentrates. d In 201213 Australian dollars. f BREE forecast. z BREE projection. Sources: BREE; ABARES; Australian Bureau of Statistics; International Lead Zinc Study group.
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Reviews
March 2013 105
An introduction to thermal coal markets

Ian Cronshaw *
International trade in coal is embedded in global energy markets and industrial demand for products such as steel and cement. Globally, coal use is growing rapidly, and accounted for nearly half of incremental energy use in the last decade. Coal use has grown by 4.3 per cent per year since 2000, and provides about 28 per cent of the global energy supply, second only to oil. Globally, thermal coal use in 2011 accounted for three-quarters of total coal demand.
Thermal coal and power markets are closely linked

By far the most important use of thermal coal is power generation: in 2010, some 83 per cent of thermal coal use in OECD countries was in power production. In the US, around 90 per cent of coal use is in power production, accounting for just under half of power output in 2010. In non OECD countries, coal provides a similar proportion of power output, but is increasing. A key to understanding thermal coal markets is that coal can be substituted by gas directly, and indirectly by alternative power sources such as nuclear and renewables. The short term dynamics of gas and coal competition are especially important because most other sources of power generation have relatively low variable costs, and are likely to be dispatched first, such as renewables, nuclear, and some hydro-electric power.
Most coal is used in countries outside the OECD, especially China

The second important factor in understanding global coal use is the importance of non OECD consumption. While in in terms of oil and gas, non OECD countries account for roughly half of energy use, for thermal coal the ratio is closer to three quarters, having grown from about half in the mid-1990s. Paramount in this growth in coal has been increases in both China and India. In absolute tonnage terms, Chinese thermal coal use was more than half global thermal coal consumption in 2011, having more than doubled since 2000, while India accounted for 10 per cent, having doubled since 2000 (see Figure 1). By comparison, the US, the largest OECD coal consumer, used some 15 per cent of global thermal coal output, its share having peaked at more than 21 per cent around 2005.
The views expressed in this review are those of the author alone and are not necessarily those of the Bureau of Resources and Energy Economics, the Department of Resources, Energy and Tourism nor the International Energy Agency.
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In the US, in the last two years, gas has increased its market share over coal in the power sector, to the point where for a few months in 2012, gas and coal supplied about equal amounts of power. By contrast, as recently as 2005, coal had provided over half US power needs, with gas at around 18 per cent. This is also true in most OECD countries, where new generation has been dominated by gas over the last 15 years or so, with renewables also growing rapidly. However, the power sectors of India, and to a far greater extent China, have been dominated by massive building of new coal fired plant. Plants built over the last 1015 years, or under construction, are likely to total some 800 GW even allowing for decommissioning of older, less efficient plant. By comparison, Australias coal capacity is 30 GW. Figure 1: Coal consumption
6000 5000 4000 3000 2000 1000 Mt 1980 China 1985 US 1990 Other 1995 India 2000 2005 OECD Europe 2010 Japan
Source: IEA.
Trade is a small part of global thermal coal use

Historically, seaborne and other international coal trade has made a relatively small contribution to total coal use. Nevertheless, seaborne thermal coal trade more than doubled between 2000 and 2011, reaching an estimated 791 million tonnes, or around 14 per cent of world thermal coal use in 2011 (see Figure 2). Three quarters of global coal trade is in thermal coal. In 2011, the largest thermal coal exporters were Indonesia (310 million tonnes), Australia (144 million tonnes) and the Russian Federation (110 million tonnes) (see Figure 3). Of particular interest is the rapid growth of thermal coal exports from the US; 2012 shipments are estimated at some 50 million tonnes, more than double 2010 levels.
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Figure 2: Seaborne thermal coal trade
1000 800 600 400 200 Mt 1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2011
Source: IEA.
Figure 3: Thermal coal exporters 2011

Indonesia Australia Other Russian Federation Colombia South Africa US
Source: IEA.
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First Japan, then Korea entered the market as buyers; China and India have followed
On the import side, Japan has historically dominated both coking and later thermal coal imports. Japanese imports were the foundation of seaborne thermal coal trade, especially as its power sector rapidly diversified away from oil following the oil shocks of the 1970s. Thermal coal imports trebled from 1990 to 128 million tonnes in 2010. Korea has also doubled its thermal coal imports to 97 million tonnes over the period 20002011. Beginning in early 2009, China has rapidly ramped up its thermal coal imports, to an estimated net 200 million tonnes in 2012, making it the worlds largest thermal coal importer. China had been a major exporter as recently as 2003 (see Figure 4). More than half of its thermal coal imports come from Indonesia. India also rapidly increased its imports, from 28 million tonnes in 2007 to 86 million tonnes in 2011, which look set to rise to around 101 million tonnes in the year ending March 2013. The speed and size of these changes in China and India have been a powerful dynamic in traded coal markets. Coupled with the sheer size of their total demand, both China and India are central to any analysis of global thermal coal markets. At current import levels they are respectively number 1 and 3 thermal coal buyers globally. Nevertheless, imports represent a relatively small part of total coal use, around 4 per cent and 14 per cent respectively in 2010. Consequently, even quite small changes in demand or supply, can have a large effect on import levels. As an illustration, a 1 per cent drop in coal demand in China, if met completely by reduced imports, would see imports decline by one fifth, or around 40 million tonnes, equivalent to more than half South Africas total exports. Given Chinas efforts to slow its coal demand growth, China is by far the most significant source of uncertainty in any global coal trade projections. Figure 4: China net thermal coal imports
250 200 150 100 50 Mt -50 -100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: IEA.
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Climate change policies

A key factor affecting future coal use and trade will be the effects of policies designed to reduce energy related carbon dioxide emissions. Effective policies aimed to mitigate anthropogenic greenhouse gas emissions must address energy based CO2 emissions from fossil fuel combustion, namely oil, gas and coal. In practice, oil use is increasingly concentrated in the transport sector, where, for the moment, substitution is difficult. In the case of gas, owing to its generally higher efficiency in use, plus lower emissions, most energy projections continue to see greater gas use, based around cheaper unconventional supplies. Stable or growing oil demand, plus higher gas use, require reductions in coal based emissions to achieve international emissions targets. In the absence of technologies that actually reduce CO2 emissions from coal combustion, notably carbon capture and storage technologies, actual coal use will need to decline from projected levels, and in some forecasts declining in absolute terms. Indeed, most models show effective greenhouse gas control from the energy sector based on a combination of measures, including energy efficiency (especially targeted at power production and use), plus decarbonisation of the power sector through zero or low carbon power sources such as hydro, advanced renewables, nuclear, and greater use of high efficiency combined cycle gas, generally replacing older less efficient coal fired power plant.
So where is thermal trade headed?

While a number of global energy forecasts exist, including from the US Energy Information Administration (EIA), and large hydrocarbon companies such as BP, Shell and Exxon Mobil, those of the International Energy Agency (IEA) are amongst the most complete and respected globally. The IEA produces two coal forecasts annually, one covering the short to medium term outlook, extending out five years into the future, and its longer term outlook, the World Energy Outlook (WEO), to 2035. In the short term, both reports highlight the on-going growth in thermal coal use in all major markets, with the exception of the US, where cheap gas, currently priced at around one sixth the price of oil on an energy equivalent basis, is displacing coal in the power sector in a number of regions. Low US gas prices are also depressing world coal prices as US net coal exports have risen sharply.
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Coal use continues to grow, but not as fast as in the last decade
In the IEAs most recent medium term forecast (IEA 2012a), global coal use grows by around one sixth by 2017, driven by non OECD growth, with Chinese demand expected to grow by 25 per cent over that period, dominated by a near one third increase in coal demand from the power sector, largely based on increases in coal fired plant already under construction. This would take total coal use in China to around 4.6 billion tonnes. Nonetheless, this is a marked slowdown from the average 10 per cent per year growth over the first decade of the century, reflecting a consensus view amongst forecasters that the Chinese economy will slow somewhat over the next five years, and become less energy intensive. Energy efficiency and energy diversification policies, especially in the power sector, (nuclear, renewables and gas) can be expected to moderate thermal coal demand, the latter group of policies by around 500 million tonnes compared to a business as usual approach. Coal demand from the Chinese power sector is expected to grow at only around 5 per cent per annum, as power demand in general slows from the breakneck speed of 63 per cent (around 1800 Twh) observed between 2005 and 2011. Non-power coal demand in China, which until recently was half of total coal demand (steel, coke, but also cement and chemicals and even household use) is also likely to moderate, as more modern energy sources such as gas increase penetration, and cement output slows. Indian thermal coal demand is projected to grow by some 36 per cent to 2017, based on rapid expansion of the coal fired fleet and increases in non-power use, especially cement. Coupled with on-going declines in US coal use, India should overtake the US to become the second largest coal user globally by 2017.
But coal trade still grows strongly.

The IEA projects that global seaborne coal trade will grow by around one quarter over 201117, with thermal coal accounting for three quarters of this trade throughout the forecast period. Growth in thermal coal export shipments at 4 per cent per annum, is a little slower than in the previous decade, when growth was nearer to 5 per cent. Before 2017, India is expected to overtake China as the biggest thermal coal importer, as its own mines will not be able to supply its increasing demand. According to the IEA, thermal coal imports are projected to more than double, and India accounts for more than half of incremental steam coal trade. India, China, Southeast Asia (Malaysia, Thailand, Philippines) and Chinese Taipei account for almost all the net growth in thermal coal import demand. In absolute terms, Indonesia and Australia each meet about one third of incremental thermal coal demand. Colombia will see a 30 per cent increase in thermal coal exports, with the US playing an increasing role as a thermal coal exporter. Depending on the evolution of freight rates, both Colombia and the US may become more prominent in Pacific markets.
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but is very sensitive to Chinese developments

The IEA evaluates the impact of Chinese coal demand on world markets by analysing a second scenario, based on slower Chinese economic growth of around 5 per cent per annum, compared to current levels nearer 8 per cent, and its current targeted levels of 7.5 per cent. Unsurprisingly, given Chinas heavy reliance on coal and coal based power, this has a marked impact on coal use and import levels. Chinese coal demand growth is halved, with the power sector taking a major part of reduced demand, so that imports would fall to only around one-third of current levels. Global thermal coal trade growth is expected to be some 30 per cent lower over the period to 2017 compared with the base case, highlighting the sensitivity of global coal markets to the evolution of Chinas energy sector. In general, low cost producers close to Asia (Indonesia and Australia) can expect to maintain strong shares of thermal coal export markets, while higher production and shipping cost suppliers will see their exports reduced.
Longer term is much more uncertain

The IEA produces annually longer term global energy projections in its World Energy Outlook (WEO) (IEA 2012b). The IEA bases its projections around three levels of Government policy intervention. The Current Policies Scenario (CPS) assumes no implementation of policies beyond those adopted by mid-2012. It corresponds loosely to the Reference Case of the EIA and the Business as Usual case adopted by private sector forecasters (eg BP and Shell). The IEAs second and central policy case, the New Policies Scenario (NPS), takes into account existing policy commitments and announcements, cautiously implemented, in particular a more widespread carbon price after 2020. The third scenario, the 450 scenario, assumes policy action designed to limit global temperature increases to 2 degrees C, based on ultimate stabilisation of greenhouse gases in the atmosphere at 450 ppm CO2 equivalent. In all scenarios, world energy demand grows over the forecast period, 201035, for CPS, NPS and 450 scenarios respectively, by 47 per cent, 35 per cent, and 16 per cent, with a generally increasing trend, although with obviously different growth rates. The corresponding growth rates for coal are respectively 59 per cent, 21 per cent, and for 450, a decline of 33 per cent from 2010 levels, back to levels last seen globally in the early 1990s. The trajectories of coal demand growth differ markedly across the three scenarios. All cases show a roughly 15 per cent growth from 2010 to 2015-16, due to the inertia of existing and under construction power generation infrastructure. Thereafter, the three scenarios diverge. CPS, with the fastest coal demand growth, shows a moderation from 200010 growth rates after 2015, in keeping with the anticipated slowing of Chinese coal demand growth, so that compound annual average growth rate is less than half that observed over the last 11 years. In NPS, annual global coal demand growth averages only 0.9 per cent, with almost all growth concentrated in the period up to 2015. In the 450 scenario, coal use begins to decline soon after 2015, so that by 2035, coal use is below half that projected in CPS, a difference almost equal to total 2010 global coal use. In all three scenarios China, India and the US account for more than two thirds of global coal use, making policies in these countries pivotal in understanding coal markets and pricing, and coal based emissions.
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Unsurprisingly, the impact on global coal trade in each of the three scenarios differs markedly. Thermal coal trade over the decade to 2020 is projected to grow by 65 per cent, 44 per cent, and 10 per cent in the CPS, NPS, and 450 scenarios respectively. For thermal coal trade post 2020, the differences become much greater. Australia, in the NPS, is projected to retain its dominance of non-thermal coal markets, although market share may fall somewhat from 2010 levels of 60per cent, even as tonnage actually increases. For thermal coal, tonnages to 2020 can be expected to rise by around 75 per cent, and Australia is anticipated to grow its share of global thermal coal markets from the current 20 per cent to nearer 30 per cent over the forecast period.
Conclusion
Coal use has grown rapidly since 2000, at a rate of 4.3 per cent per annum. The astonishing growth in the Chinese economy, the worlds largest energy user, and by far the biggest coal user, equal to half global coal demand, has been the major factor in this rise. Seaborne thermal coal trade has grown even faster than global coal use, more than doubling between 2000 and 2011, with only some signs of slowing in 2012. Despite this recent growth in coal use, there is considerable uncertainty about future coal use and trade. These uncertainties include the possibility of a more marked slowing and also maturing in the Chinese economy. Equally important are climate change policies. If climate change mitigation policies are strongly implemented in line with the pledges made by developed and developing countries alike, this will have a larger and more negative impact on coal than on other fossil fuels, in the absence of carbon capture and storage type technologies.
References
International Energy Agency (IEA) 2012a. Coal Medium Term Market Report 2012 International Energy Agency (IEA) 2012b. World Energy Outlook 2012
March 2013 113
Nickel: a short history

Simon Cowling*
Nickel, through its various uses, plays a large part in the development of capital infrastructure in economies worldwide. Due to its resistance to corrosion, nickel is primarily used in the production of stainless steel and alloys which are an integral ingredient for many infrastructure projects. To a lesser extent, nickel is also used in the production of nickel-metal hydride rechargeable batteries and electroplating other metals, such as steel for uses in construction and automotive purposes. Australia is one of the largest nickel suppliers to the world market. The establishment of Australias nickel industry, however, has not been straight-forward and the industry has faced numerous challenges. The nickel market is characterised by extreme volatility evidenced by large and rapid swings in demand, production and, ultimately, prices. This review provides an overview of how key events in nickel markets since the 1960s have affected the development of Australias nickel industry.
The early dayspre-1965

The Australian nickel industry first emerged at the start of the 20th century with mining starting at the Zeehan field in western Tasmania in 1910. This followed the development of technologies that employed nickel as an alloying agent in steel towards the end of the 19th century (Mudd 2010) Between 1910 and 1938, approximately 568 tonnes of Nickel was intermittently produced from nickel copper sulphide ore extracted from the Five Mile group of mines in Tasmania (Mudd 2007). The small and scattered nature of the deposits made the mining and extraction of nickel challenging at Zeehan. Production at Zeehan field eventually became uneconomic and although world demand for steel alloys and nickel continued to grow, nickel operations ceased in 1938 (Mudd 2007). World consumption grew by more than 130 per cent between 1953 and 1965 as the result of the increased use of steel in western economies (see Figure 1). As a result, the price of nickel trended upwards from the late 1940s to the mid 1970s (see Figure 2).
The views expressed in this review are those of the author alone and are not necessarily those of the Bureau of Resources and Energy Economics nor the Department of Resources, Energy and Tourism.
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Figure 1: World refined consumption1950 to 2012

1800 1600 1400 1200 1000 800 600 400 200 kt 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Re ned consumption
Sources: BREE; INSG.
Figure 2: Nickel price and major nickel events1950 to 1990

50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 2013 US$/t
Australian nickel boom 1966-73
Nickel mining at Zeehan led starts, TAS Nickel mining at Zeehan eld ends, TAS
World supply shortage 1987-89 Discovery of Kambalda deposit, WA
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990
Sources: BREE; LME; USGS; Hoatson et al, 2006; Mudd, 2007.
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Boom time1966 to mid-1970s

Demand for nickel during the 1960s and early-1970s was driven by the steel consumption demand associated with robust economic growth and investment in fixed capital in Japan, Europe and the US. For example, Japans Gross Domestic Product grew by around 10 per cent each year during the 1960s. Consumption of steel in the US was also driven by the manufacturing of steel-intensive military equipment used in the Vietnam War. Increased global demand for nickel supported Australias nickel industry which established itself after a number of years of exploration. The first major event of this period was the discovery by the Western Mining Company (WMC) of a substantial nickel sulphide ore deposit at Kambalda, near Kalgoorlie in Western Australia in 1966. The discovery signalled the start of a period of rapid growth in Australias nickel industry that coincided with a rapid increase in the price of nickel (see Figure 2). Between 1967 and 1973 Australian nickel production increased more than 1 400 per cent, from 2 600 tonnes in 1967 to over 40 000 tonnes in 1973. Although global production also increased over this period, strong growth in demand and rising production costs caused the price to rise (in 2013 dollars) from US$13 500 at the end of 1966 to a peak of US$17 600 in 1974. Figure 3:
300 250 200 150 100 50 kt 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 Mined Production Re ned Production
Australias refined and mine production1967 to 2012
Sources: BREE; INSG.
The discovery at Kambalda by WMC initiated a rush in base metal and nickel exploration in Australia, primarily focussed within Western Australia. Expenditure on nickel exploration prior to the Kambalda discovery was 2 per cent of total base metals exploration expenditure, or 1.5 per cent of total minerals exploration. This increased to more than 55 per cent of total base metals exploration and over 30 per cent of total expenditure on minerals exploration in 1970 (Jacques et al. 2005). This equates to approximately $485 million worth of exploration expenditure in 2013 dollars (Jacques et al. 2005).
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A number of large deposits in Australia that would contribute to nickel production in the coming decades were discovered during this first nickel boom. Of the known global resources of nickel sulphide, more than 90 per cent were discovered during the period of 1966 to 1973 (Hoatson et al. 2006). Significant deposits in Australia that were discovered during this period included: Mt Keith; Perseverance; Yakabindie; and Honeymoon Well. All of these deposits are located in Western Australia. In 1966, Canada was one of the major producers of nickel in the world. The rapid development of the nickel industry in Australia during the boom of the 1960s coincided with protracted labour strikes in Canada between 1966 and 1969. Due to the labour strikes, WMC was able to establish itself in the global nickel market with the Kambalda mine and ensure it became a successful and profitable operation (Mudd 2007). Profits were boosted by an increase in nickel prices and over this period Australian production of nickel ore increased by 400 per cent, to total 11 200 tonnes in 1969 (see Figure 3). World mine production during this period grew by 23 per cent (see Figure 4).
The rocky yearsmid-1970s to early 1990s

Following the first oil shock in 1973 there was a global slowdown in the nickel market that lasted for about two decades covering the period 1975 to 1987. During this time depressed global prices, for nearly all metals, led to a substantial decline in exploration activity. The higher levels of world economic growth during the 1960s had, for the most part, come to an end. Economic growth and investment in the US, Japan, Europe and Australia all slowed during the 1970s. The end of the Vietnam War also led to a downturn in steel used in manufacturing military materiel and contributed to a drop in the demand for nickel. Between 1975 and 1987, Australia produced between 75 000 to 85 000 tonnes of contained nickel per year. In 1987, global stocks of nickel fell to 92 000 tonnes (5.3 weeks consumption), less than half the level of world stocks of 202 000 tonnes at the end of 1982 (14.5 weeks consumption) (see Figure 5). A reduction in nickel production capacity, caused by closures of high energy consuming operations started in the early 1970s (Ashok et al. 2004). Prices increased from US$9900 per tonne (2013 dollars) in 1987 to US$27 800 per tonne in 1988. As a result, the value of Australian nickel exports over the five years starting in 1988 increased despite a decline in the production of Australian nickel.
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Figure 4: World refined and mine production1950 to 2012

2500 2000 1500 1000 500 kt 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 Mined Production Re ned Production
Sources: BREE; INSG
Figure 5: World nickel stocks1975 to 2012

50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 2013 US$/t 1991
Sources: BREE; INSG; LME.
Eurozone sovereign debt crisis Nickel price peak 2007 Global nancial crisis
1996
2001
2006
2011
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An abrupt decline in the discovery of new nickel deposits during the rocky years affected the available global nickel supply. Very few major deposits were discovered in Australia between 1975 and 1987, although previously identified resources within Australia were able to sustain Australian production during this period. Technological advancements in processing nickel laterite ore, such as high pressure acid leaching (HPAL) and electric furnaces, were able to contribute to an increase in production capacity. These advances made the complex process of production of nickel from laterite ore more economically viable. The processing of nickel laterites has historically been more expensive compared to nickel sulphides, although mining nickel sulphide ores can be more capital intensive due to deposit depths. Australias nickel focus has predominantly been on the production and export of nickel derived from nickel sulphides due to the greater abundance of nickel sulphide resources. These technological advancements meant that some previously discovered, but uneconomic, resources could be extracted profitably.
Bigger, higher, longerearly 1990s to 2008

Beginning in the early 1990s the nickel industry in Australia underwent an expansion that could be characterised as the second nickel boom. This was driven by a number of global factors. The emergence of China as an economic superpower in the 1990s and 2000s coincided with a surge in fixed asset investment on steel-intensive infrastructure projects and resulted in higher demand for nickel. Refined nickel consumption in China grew by more than 900 per cent between 1990 and 2008. This increase in consumption encouraged investment and the opening of new mines, both in Australia and globally. World nickel prices began to rise steadily from the late 1990s and continued into the 2000s (see Figure 6), with global production reaching more than 1.5 million tonnes by the end of 2006. As a consequence of both higher prices and production, Australian nickel export values peaked in 2007 at a value of $8.1 billion (2013 dollars), with 211 000 tonnes exported (see Figure 7).
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Figure 6: Nickel prices and major Nickel events1991 to 2012

90 75 60 45 30 15 2012-13 A$b 60 50 40 30 20 10 % 1989-90 1992-93 1995-96 1998-99 2001-02 2004-05 2007-08 2010-11
private new capital expenditure
share of total industries (right axis)
Sources: BREE; LME; Hoatson et al, 2006; Mudd, 2007.
Figure 7: Australias export volumes and values1990 to 2012

300 8
225
150
75
2 2012-13 A$b 1990 1994 1998 volume 2002 2006 2010 value (right axis)
kt
Sources: BREE; ABS.
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The second nickel boom, in part, was supported by further development of high pressure acid leaching (HPAL) technology in the early 1990s. High pressure acid leaching is associated with lower grade nickel laterite ores that were historically more difficult and expensive to process. The outcome of this leaching process is an intermediate product for further refining which is rich in nickel. During the first nickel boom, initial nickel ore discoveries were of a high grade and contained approximately 4 per cent nickel (Mudd 2007). Ore grades have been gradually, but steadily, in decline since this time. One of the drivers influencing this decline is the increasing extraction of nickel from lateritic ores. In the late 1990s, three new laterite projects were developed in Western Australia based on HPAL technology. Base metal exploration expenditure also increased during the second nickel boom to levels comparable to the first nickel boom of the late 1960s. For instance, exploration expenditure in Australia increased 400 per cent from FY1992 to FY2008 (in 2013 dollars). This was driven by increased global prices for nickel and the expectation of strong consumption demand continuing into the future. Large amounts of capital were injected into nickel mine developments in Australia. One of the largest of these was at Nickel Wests Ravensthorpe mine in Western Australia. This investment included a nickel and cobalt processing plant worth more than US$1.3 billion in 2013 dollars. A number of mines started or increased production following the upswing in prices in the 2000s. The mines, all located in Western Australia, included Murrin Murrin, Mt Keith, Silver Swan, Cosmos, Emily Ann, and the re-opening of Kambalda. The conversion of previously sub-economic resources to economic resources was a direct result of the upturn in the Australian nickel market. In addition, the on-going development of HPAL technology was a contributing factor as it made previously discovered, but uneconomic deposits, such as Murrin Murrin, economically viable. World nickel price and production reached an historical high in 2007 and peaked at US$61 300 per tonne in 2013 dollars on 16 May 2007. World nickel production in that year also reached, a then record high, of 1.6 million tonnes. The peak of the boom in 2007 was largely driven by demand growth underpinned by robust economic growth in China, and moderate growth in the US and Europe. Emerging economies, especially China, experienced substantial increases in economic growth that increased the need for infrastructure and stainless steel. Another key factor explaining the historically high prices of 2007 was the existence of supply constraints. In particular, world stocks were below 150 000 tonnes from 1999 through to 2008. In response to these higher prices and reduced stocks, China responded by increasing its use of nickel pig iron.
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Nickel pig iron (NPI) I is a form of pig iron that is produced by smelting iron-rich, low grade nickel ores, often from nickel laterite. NPI is commonly produced in two varieties, a low nickel variety with between 46 per cent nickel and a high nickel variety containing 813 per cent nickel. This compares to conventionally produced ferronickel which is between 2540 per cent nickel. The use of laterite ore provides a cheaper alternative to using the more expensive ferronickel and refined nickel inputs. The rise of the NPI industry in China has allowed some exporting countries to sell nickel ore without the need to build capital intensive refining facilities and has boosted exports from Indonesia, the Philippines and New Caledonia. The increase in the use of NPI has had a substantial impact on the Australian nickel industry. With the emergence of NPI as a substitute for ferronickel and refined nickel in stainless steel making in China, demand for Australian refined nickel reduced.
Peak nickel2008 and 2009

The price and production prices of early 2000s were driven by a relative shortage of global nickel supply. By 2007 global mine production peaked at 1.6 million tonnes and the nickel price peaked at around $62 000 per tonne (2013 US dollars) in May of that year. As a result of the global financial crisis (GFC), economic growth declined was and became negative in key industrialised countries. Demand for stainless steel and nickel fell and resulted in nickel prices decreasing by more than 40 per cent from 2007 to 2008, with a further decline of over 30 per cent from 2008 to 2009. Numerous mine closures occurred, such as Cawse and Black Swan within Australia, as a direct result of the fall in nickel prices. In 2009, Nickel West announced that production at the Ravensthorpe mine would be suspended indefinitely and the site would be placed on care and maintenance. Similarly, Norlisk suspended operations at its four mines in 2009 due to very low nickel prices. In 2011, Norlisk restarted production at the Maggie Hays mine near Lake Johnson in Western Australia.
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Nickel, back to stay?Post 2009

The price trough for nickel continued through most of 2009, with prices averaging around $16 000 a tonne for the year, in 2013 US dollars (see Figure 5). The price falls led to the total value of Australias nickel exports falling by 6.5 per cent in 2009 compared with 2008 (see Figure 7), despite increased export volumes. At the start of 2010, global stocks of nickel were at a 10-year high of 234 000 tonnes, or around 10 weeks of consumption. Since 2009 the nickel market has experienced a steady increase in prices and world refined nickel consumption grew 19 per cent and 8 per cent in 2010 and 2011, respectively. The effects of the euro zone crisis in 2012 reversed the steady increases in prices since late 2009. In 2012, refined nickel consumption increased by 3 per cent, although the average price was 26 per cent lower than in 2011 at $17,200 (2013 dollars). Both global and Australian nickel production increased in 2012, with nickel sulphide ores accounting for around 40 per cent of known nickel resources worldwide, with laterite ores accounting for the remaining 60 per cent (USGS, 2013). Projected growth in emerging economies should support higher world consumption of nickel. However, fluctuating demand and price volatility are likely to continue characterising the nickel market in the future.
References
Dalvi, A. D., Bacon, W. G., & Osborne, R. C. (2004). The Past and Future of Nickel Laterites. PDAC 2004 International Convention (p. 27). Toronto, Ontario, Canada: Prospectors and Developers Association of Canada. Hoatson, D. M., Jaireth, S., & Jaques, A. L. (2006). Nickel sulfide deposits in Australia: characteristics, resources, and potential. Ore Geology Reviews, 29, 177-241. Mudd, G. M. (2007). An analysis of historic production trends in Australian base metal mining. Ore Geology Reviews, 32, 227-261. Mudd, G. M. (2010). Global trends and environmental issues in nickel mining: Sulfides versus laterites. Ore Geology Reviews, 38, 9-26. U.S. Geological Survey. (2013). Mineral Commodity Summaries, January 2013. U.S. Geological Survey.
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Biofuels: An overview
Alan Bartmanovich*
Background
Biofuels are liquid fuels, such as ethanol, that are derived from biomass. In 1826, Samuel Morey used ethanol in the first American internal combustion engine prototype. In 1896, Henry Ford designed his first car, the Quadricycle to run on pure ethanol. In 1908, the revolutionary Model T Ford was capable of running on ethanol, gasoline or any combination of those fuels. Rudolf Diesel, who designed the original diesel engine, had it run on peanut oil and was quoted as saying at the time; The diesel engine would help considerably in the development of agriculture of the countries which use it (Kovarik). Due to the low cost of petroleum at the time, however, the diesel engine was modified to run on petroleum derived fuel. Power ethanol was used in Australia from 1927 until after the end of World War 2. The Australian National Power Alcohol Company, built in Sarina, Queensland, started with a capacity of two million gallons per year and produced ethanol from molasses, along with cassava (manioc) and sweet potatoes grown in rotation with sugarcane. The use of power alcohol was mostly confined to Queensland, but the Motor Spirits Vendors Act of 1933, mandated that ethanol be blended with petrol. Shell Oil Co. marketed Shellkol fuel which was a 15-35 per cent blend in petrol during this time (Kovarik).
Australian overview
Australia has developed a growing reliance on petroleum fuels that are increasingly imported, either as crude oil for local refining or as finished fuel products. In terms of biofuels, Australia has a number of natural advantages for increased biofuel production including: substantial agricultural and forestry biomass resources; marginal land suitable for energy crops; a high number of sunshine days; and a relatively well developed rural infrastructure that could support new industries. The availability of adequate water resources to support biomass crops, however, is a limiting factor in some geographic areas. The potential benefits to Australia from growing biofuel production include increased domestic supply security for fuels, enhanced regional development opportunities and the potential for the reduction of Australias carbon footprint with the direct reduction of fossil fuel consumption. Commercial production of Australian biofuels in 2012 was limited to fuel ethanol fermented from wheat, sorghum and c-grade molasses and biodiesel from processed waste materials such as used cooking oil and tallow. Fuel ethanol is supplied as a 10 per cent ethanol blend in petrol (E10), with some limited volumes of E85 (i.e. blend of 85 per cent ethanol by volume in petrol), while biodiesel is sold as a maximum 5 per cent blend in diesel fuel (i.e. B5).
* The views expressed in this review are those of the author alone and are not necessarily those of the Bureau of Resources and Energy Economics nor the Department of Resources, Energy and Tourism.
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Overseas developments
Brazil
Brazil is a pioneer in the commercial production of biofuels. Fuel ethanol, for example, has been mandated for inclusion in Brazilian motor gasoline at the rate of 5 per cent by volume as far back as 1931. After the oil price shocks of the 1970s, Brazil launched its National Alcohol Program which focussed on increasing the production of ethanol from sugar cane. Fuel ethanol is now a major component of the Brazilian liquid fuel mix, with 440 ethanol production facilities in operation. All motor gasoline sold in the country since 1993 has been blended with 1825 per cent ethanol. In 2011, Brazilian consumption of fuel ethanol was over 19 billion litres which accounted for some 35 per cent of the total national gasoline demand of 55 billion litres (Giles & Barros, 2012). Car manufacturers in Brazil have developed flexible fuel (flex-fuel) capability for vehicles to accept any blend of ethanol and gasoline up to 100 per cent ethanol, which is sold as a fuel option in most retail petrol stations. In 2011, over half of the Brazilian light vehicle fleet was flex-fuel capable and this is expected to grow to 80 per cent by 2019 (Giles & Barros, 2012), with 90 per cent of Brazils new passenger vehicles sold having flex-fuel capability. Brazil has also developed commercial production of biodiesel, over 80 per cent of which is based on soybeans (Aziz Elbehri; Anna Segerstedt; Pascal Liu, 2013). Brazilian biodiesel production in 2012 was 2.6 billion litres and accounted for about 5 per cent of the total national diesel fuel demand. Figure 1: Biofuels 2011 market shares in selected countries
40 35 30 25 20 15 10 5 % 1.7% bioethanol in mogas Australia Brazil 9.6% 4.8% 0.3% biodiesel USA 1.5% 35.2%
Source: BREE.
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Figure 1 shows that Brazil is the world leader in terms of the adoption of biofuels as a substitute for conventional petroleum based fuels. By comparison to both Brazil and the USA, Australia has an underdeveloped biofuels industry.
The US
The US Environmental Protection Agency (EPA) is responsible for developing and implementing regulations to ensure that transportation fuels sold in the US contains a minimum volume of renewable fuel. The Energy Policy Act (EPAct) of 2005 established the Renewable Fuel Standard (RFS) program and required that 7.5 billion gallons (28 billion litres) of renewable fuel be blended into gasoline by 2012. In 2007 the Energy Independence and Security Act (EISA) further expanded the RFS program to: include diesel fuel, in addition to gasoline; increase the volume of renewable fuel required to be blended into transportation fuel from 9 billion gallons (34 billion litres) in 2008 to 36 billion gallons (136 billion litres) by 2022; establish new categories of renewable fuel, and set separate volume requirements for each one; require the EPA to apply lifecycle greenhouse gas performance threshold standards to ensure that each category of renewable fuel emits fewer greenhouse gases than the petroleum fuel it replaces.
In 2010, 98 per cent of the biofuel consumption of 48 billion litres in the USA was bioethanol (EIA, 2013), with corn derived ethanol comprising the vast majority. This will change over time, however, because the RFS requires that a growing proportion of renewable fuels will need to be advanced biofuel feedstock and technologies Most US cars are able to run on a 10 per cent ethanol blend in motor gasoline (E10) and in 2011 there were up to 10 million flex-fuel vehicles in America (Motavalli, 2012) capable of running on much higher ethanol blended fuels such as E85.
The EU
Under Directive 2003/30/EC on the promotion of the use of biofuels or other renewable fuels for transport, the EU established the goal of reaching a 5.75 per cent share of renewable energy in the transport sector by 2010. Under Directive 2009/28/EC on the promotion of the use of energy from renewable sources this share rises to a minimum 10 per cent in every Member State in 2020. This directive aims to ensure the use of sustainable biofuels only, which generates a clear and net GHG saving without a negative impact on biodiversity and land use (European Commission).
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In its biofuels implementation strategy, the European Commission has a threefold objective: (1) further promotion of biofuels in the EU and in developing countries; (2) preparedness for large-scale use of biofuels, and (3) heightened cooperation with developing countries in the sustainable production of biofuels. These three objectives comprise seven policy areas, as follows: to stimulate demand for biofuels, stressing the importance of national targets, biofuel use obligations and ensuring sustainable production of biofuels. The European Commission will also pay particular attention to the tax benefits and the possible establishment of a regulatory framework for incentives linked to the environmental performance of individual fuels, will encourage the use of biofuels in public and private vehicle fleets and is proposing to formally promote the use of clean vehicles for road transport. ensuring environmental benefits in terms of reducing emissions of greenhouse gases, guarantee that feedstock for biofuels is produced in a sustainable manner, both in the EU and in third countries, particularly with regard to the protection of biodiversity, water pollution, soil degradation and the protection of habitats and species and ensure the compatibility of technical and environmental regulations. developing the production and distribution of biofuels, considering the opportunities offered by biofuels in terms of economic activity and job creation within the context of the cohesion policy and rural development policy. Industries are to justify their use of practices that act as barriers to the introduction of biofuels to ensure that there is no discrimination against biofuels. expand feedstock supplies to ensure sustainable production of biofuels, by including sugar production for the manufacture of bioethanol aid schemes. In addition, the European Commission will study the possibility of processing cereals from existing stocks into biofuels, finance a campaign to inform farmers and forest operators, bring forward a Forestry Action Plan and examine the possibility of using animal by-products and waste as energy sources. enhance the trade opportunities of biofuels, by establishing separate customs codes for biofuels and pursuing a balanced approach to trade negotiations with ethanol-producing countries in order to ensure sustainable development of European production and imports of biofuels, and to amend the standard for biodiesel as required. support developing countries with potential in terms of biofuels, particularly by means of accompanying measures for countries affected by EU sugar reform, a specific aid program for biofuels, and a framework for effective cooperation that would include, among other developments, the establishment of national biofuel platforms and regional biofuel action plans. support research and innovation, particularly in order to improve production processes and to lower costs. The principal measures will focus on continuing support for Research and Development, the full use of second generation biomass and biofuels (i.e. originating from the processing of lignocellulosic feedstock such as straw and forest residues).
Source: Europa.
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Biofuels issues, technologies and feedstocks

The Food versus Fuel debate
The increased production of biofuels has been recognised as carrying some risk to world food supply security if the feedstocks that are used to produce it are diverted from food supplies or if they are grown on land, or utilise labour or water (Aziz Elbehri; Anna Segerstedt; Pascal Liu, 2013) that could otherwise be used for food production. Traditional feedstock for fuel ethanol in Brazil, for example, is sugar. Producers are able to readily switch between sugar production and ethanol, depending on market economics. In the USA, however, a majority of fuel ethanol is produced from corn. Increasingly, the focus is on developing second and next generation technologies to produce advanced biofuels that do not rely on food related feedstock, and can be grown on otherwise marginal land and not adversely impact the supply of potable water where it is a scarce resource.
Biofuels feedstocks
Biofuels technologies that rely on food related biomass such as sugar, corn, wheat or other edible crops have traditionally been referred to as first generation technologies. Traditional biodiesel feedstocks that include used cooking oil and animal derived tallow are considered to be conventional feedstocks even though their use in producing biofuels has minimal or no direct impact on food resources as they are essentially industrial by-products. Advanced biofuels are those that do not compete with food stocks for their production and these include lignocellulosic short rotation crops, agricultural or forestry residues, non-edible seed oils, purpose grown algae and municipal waste materials. Biofuel technologies do not always produce fuel-ready products, but often produce an intermediate product that is best described as biocrude oil, which is analogous to petroleum crude oil. In some cases, this biocrude can be a drop-in replacement for petroleum crude and, therefore, is suitable for direct injection into traditional petroleum reefing processes. Some biocrudes, however, may need to be pre-processed to make them suitable as crude oil replacements, thus adding to their cost of production. A number of biocrude oils may actually be more valuable than their petroleum counterparts in the sense that they could yield higher value products such as valuable by-products or, depending on their physical composition, they could potentially produce higher yields of valuable transport fuels than petroleum.
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Some promising biofuel technologies that are especially relevant to Australian conditions include: Super critical catalysed water processing for production of high energy drop-in biocrude; Pyrolysisfor processing of forestry and agriculture residues; Efficient yeast based conversion of lignocellulosic materials to ethanol, with animal and/or fish feed by-products; Bio-fermentation for conversion of waste industrial gases; and Biocrude conversion processes to fuels through purpose built bio-refineries
Australian second generation biofuels research and development

In 2009, the Australian Government announced the Second Generation Research and Development (Gen 2) Program which provided financial support of $15 million for seven individual projects ranging from $1.24 to $2.724 million each to develop a number of potential second generation biofuel technologies. The projects selected for Gen 2 program funding were: Algal Fuels Consortium / South Australian Research and Development Corporation A pilot-scale second-generation biorefinery for sustainable microalgal biofuels and value add products. Bureau of Sugar Research Stations (BSES) Limited Cane2Fuel: Developing an optimised and sustainable sugarcane biomass input system for the production of second generation biofuels. Curtin University of Technology Sustainable production of high-quality second generation transport fuels from mallee biomass by pyrolysis and biorefinery. Licella Pty Ltd Commercial demonstration of lignocellulosics to (unique) stable biocrude oil Microbiogen Pty Ltd Second Generation Biorefinery Conversion of sugarcane into fuel and feed project Monash University / Renewable Oil Corporation A second generation pyrolysis biorefinery University of Melbourne Biofuel from Microalgae: Efficient separation, processing and utilisation of algal biomass.
Five of the seven Gen 2 projects proceeded to successful completion by mid-2012, significantly increasing the Australian knowledge base in this industry and providing important foundations for future work and in some cases, pre-commercial project developments.
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Australian advanced biofuels research projects

In the 201112 Budget, the Australian Government committed $20 million to undertake research into advanced biofuels in Australia. The stated goal is to progress the deployment of pre-commercial demonstration projects for the production of high energy, drop-in advanced biofuels in Australia. Three projects have been funded to date, including: James Cook University received a $5 million Foundation Grant for its $11 million High Energy Algal Fuels project, which is being undertaken in partnership the Advanced Manufacturing CRC Ltd (AMCRC) and MBD Energy Ltd. The project is expected to develop and demonstrate the innovative and effective use of macroalgal biomass for the generation of high energy biocrude that can form a future base for the production of fuels for use in the aviation, mining and marine industries. Licella Pty Ltd, which opened its Australian Government supported Commercial Demonstration Plant in 2011 under the Gen 2 Program, was granted $5.4 million in funding to undertake a $8.2 million feasibility study into the construction of its first pre-commercial biofuels plant. If constructed, it is estimated that the plant could produce 125,000 barrels of bio-crude oil per annum, which could be used to produce a drop in fuel for the aviation industry. Muradel Pty Ltd plans to use $4.4 million of funding toward a $10.7 million project up scaling its marine algal production and harvesting technology from pilot to demonstration size near Whyalla, South Australia. The technology has the potential to become sustainable green crude for the existing petroleum industry and to provide fuel for aviation.
Conclusion
Biofuels production is growing worldwide as part of a global push towards renewable forms of energy. Advanced biofuels technologies are being developed both internationally and in Australia, which will likely increase the production of biofuels. Countries such as Brazil and USA and also in Europe are already driving their vehicles on locally produced biofuels while at the same time developing new, more efficient and economically sustainable technologies. Australia could grow an increasing portion of its own liquid transport fuel. Fermentation of fuel ethanol from the sugarcane and starch yielding crops is a proven and successful technology. Oil producing seed crops can easily be converted into biofuel. A sophisticated Australian agricultural sector exists that has the potential to grow new and innovative energy crops for fuel ethanol or drop-in high energy biofuels. Forestry residues and purpose grown vegetation such as salinity controlling mallee trees in wheat fields, could also be harvested for biofuel production. Finally, Algae has the technical potential to convert abundant Australian sunshine, brackish water resources and carbon dioxide into a diesel or jet fuel substitute, often yielding high value by-products in the process.
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References
Aziz Elbehri; Anna Segerstedt; Pascal Liu. (2013). Biofuel and the Sustainability Challenge. Food and Agriculture Orgainisation of the United Nations, Trade and Markets Division. Rome: Food and Agriculture Orgainisation of the United Nations. EIA, U. (2013). Alternative energy data . Retrieved March 7, 2013, from US Energy Information Administration: http://www.eia.gov/renewable/data.cfm#alternative Europa . (n.d.). Europa Legislation Summaries. Retrieved March 8, 2013, from Europa: http://europa. eu/legislation_summaries/energy/renewable_energy/l28175_en.htm European Commission. (n.d.). European Commission Renewable Energy. Retrieved March 8, 2013, from European Commission: http://ec.europa.eu/energy/renewables/biofuels/biofuels_en.htm Giles, F., & Barros, S. (2012). Global Agricultural Information Network Annual Report. Sao Paulo: USDA Foreign Agricultural Service. Kovarik, B. (n.d.). http://www.environmentalhistory.org/brilliant/bioenergy/international/. Retrieved March 4, 2013, from Brilliant - Exploring the history of sutainable energy. LEK Consulting. (2011). Advanced Biofuels Study . Canberra : Department of Resources, Energy and Tourism. Motavalli, J. (2012, march 1). Flex-Fuel Amendment Makes for Strange Bedfellows. The New York Times. US-EPA. (n.d.). Renewable fuels. Retrieved March 7, 2013, from US Environmental Protection Agency: http://www.epa.gov/otaq/fuels/renewablefuels/index.htm
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Statistics
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Contribution to GDP
Australia 200102 $1073.6b
Agriculture, forestry and shing Mining Manufacturing Building and construction Services 3% 10% 10% 6% 73%
201112 $1451.7b
Agriculture, forestry 3% and shing Mining Manufacturing Building and construction Services 10% 7% 7% 73%
Principal markets for Australian imports in 201112 dollars

200102 Resources & Energy $18.0b
Indonesia Malaysia Singapore Viet nam Other Asia Middle East New Zealand Other 18% 6% 8% 11% 19% 13% 4% 21%
201112 $52.7b
Indonesia Malaysia Singapore Viet nam Other Asia Middle East New Zealand Other 6% 9% 18% 2% 17% 7% 4% 36%
Total
$160.0b
Japan China Korea, Rep. of United States New Zealand India European Union 27 Other
19% 6% 8% 10% 6% 2% 12% 36%
$264.0b
Japan China Korea, Rep. of United States New Zealand India European Union 27 Other
19% 29% 8% 4% 3% 5% 8% 24%
134
Resources and Energy Quarterly March 2013
Principal markets for Australian exports in 201112 dollars

200102 Total $158.0b 201112 $239.6b
United States Japan China Germany Malaysia Singapore New Zealand Other
18% 13% 9% 6% 3% 3% 4% 44%
United States Japan China Germany Malaysia Singapore New Zealand Other
11% 8% 18% 5% 4% 6% 3% 44%
Resources $41.9b
China Thailand India Japan Korea, Rep. of Other Asia European Union 27 Other 7% 2% 2% 15% 9% 17% 10% 37%
$113.0b
China Thailand India Japan Korea, Rep. of Other Asia European Union 27 Other 47% 2% 4% 13% 9% 7% 6% 11%
Energy
$32.8b
Japan Korea, Rep. of China India Other Asia European Union 27 Other 39% 13% 2% 4% 15% 9% 17%
$75.3b
Japan Korea, Rep. of China India Other Asia European Union 27 Other 38% 11% 13% 9% 14% 6% 9%
Resources and Energy Quarterly March 2013 135
Resources and energy sector indicators, Australia

Australia
Resources and energy sector indicators
Mine production
base: 199798 = 100 160 150 140 130 120 110 100 index 2001-02 Energy minerals 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Metals and other minerals
Mineral resources exports

50 000 40 000 30 000 20 000 value 10 000 $m Dec 2008 Mar 2009 Jun 2009 Sep 2009 Dec 2009 Mar 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012 Dec 2012 quarterly Share of total goods and services exports 65 60 55 50 45 40 35 30 %
Export unit returns

550 500 450 400 350 300 250 200 150 index Dec 2008 Mar 2009 Jun 2009 Sep 2009 Dec 2009 Mar 2010 Jun 2010 Sep 2010 Dec 2010 Mar 2011 Jun 2011 Sep 2011 Dec 2011 Mar 2012 Jun 2012 Sep 2012 Dec 2012 Metals and other minerals quarterly, base: 199495 = 100 Total mineral resources Energy minerals
136
Principal markets for resources and energy exports

in 201112 dollars, A$m
200102
201112
Iron ore
China Japan Korea, Rep. of Chinese Taipei France United Kingdom 0
Metallurgical coal
Japan India Korea, Rep. of China Chinese Taipei Netherlands Brazil
5000 10000 15000 20000 25000 30000 35000 40000 45000 50000
1000
2000
3000
4000
5000
6000
7000
8000
9000 10000
Thermal coal
Japan Korea, Rep. of China Chinese Taipei Mexico Malaysia 0 1000 2000 3000 4000 5000 6000 7000 8000
Oil and gas

Japan China Singapore Korea, Rep. of Thailand India
9000
2000
4000
6000
8000
10000
12000
14000
Gold
India China United Kingdom Thailand Singapore Hong Kong 0 1000 2000 3000 4000 5000
Copper
China Japan India Korea, Rep. of Malaysia Chinese Taipei 0 500 1000 1500 2000 2500
Aluminium
Japan Korea, Rep. of Chinese Taipei Thailand Indonesia Malaysia 0 200 400 600 800 1000 1200 1400 1600 1800 2000
Resources and energy ended quarter December Resources and energy prices, prices, ended December 2012 quarter 2012
Alumina
500 400 300 200 100 0 A$/t Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 3500 3000 2500 2000 1500 1000 500 0 US$/t Dec-98
Aluminium
Dec-00
Dec-02
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
Gold
2000 1500 1000 500 0 US$/oz Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 160 120 80 40 0 A$/t Dec-98 Dec-00 Dec-02 Dec-04
Iron ore
Dec-06
Dec-08
Dec-10
Dec-12
Thermal coal
180 150 120 90 60 30 0 A$/t Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 500 400 300 200 100 0 A$/t Dec-98 Dec-00 Dec-02
Metallurgical coal
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
Crude oil (WTI)

140 120 100 80 60 40 20 US$/bbl Dec-98 150 125 100 75 50 25 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 0 US$/lb Dec-98 Dec-00 Dec-02
Uranium
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
138
Resources and energy prices, ended December quarter 2012
Copper
12000 10000 8000 6000 4000 2000 0 US$/t Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12 3500 3000 2500 2000 1500 1000 500 0 US$/t Dec-98 Dec-00 Dec-02
Lead
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
5000 4000 3000 2000 1000 0 US$/t Dec-98 Dec-00 Dec-02
Zinc
5000 4000 3000 2000 1000
Silver
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
USc/oz 0 Dec-98
Dec-00
Dec-02
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
Nickel
50000 40000 30000 20000 10000 US$/t Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12
175 150 125 100 75 50 25 A$/t Dec-98 Dec-00 Dec-02
Ilmenite
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
1500 1250 1000 750 500 250
Rutile
1500 1250 1000 750 500 250 A$/t A Dec-98 Dec-00 Dec-02
Zircon
A$/t Dec-98 Dec-00 Dec-02 Dec-04 Dec-06 Dec-08 Dec-10 Dec-12
Dec-04
Dec-06
Dec-08
Dec-10
Dec-12
Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange; London Bullion Market Association; The Ux Consulting Company; US Department of Energy, Energy Information Administration.
Annual export summary, balance of payments basis

Australia
200708 $m 24 603 18 889 41 930 12 272 18 211 115 904 145 875 37 047 182 922 50 891 233 813 200809 $m 54 954 20 706 52 725 17 508 14 358 160 251 194 168 37 447 231 615 52 283 283 898 200910 $m 36 787 18 984 54 081 14 300 14 031 138 183 168 656 33 121 201 777 51 359 253 136 201011 $m 44 101 23 594 79 814 14 256 15 963 177 729 212 095 34 884 246 979 50 343 297 322 201112 $m 48 216 25 719 85 897 16 650 14 568 191 051 228 263 36 959 265 222 50 552 315 774
At current prices Resources and energy Coal, coke and briquettes Other fuels Metalliferous ores and other minerals as Gold Other metals bs Total s Total commodities sector s Other merchandise s Total merchandise s Services Total goods and services Chain volume measures c Resources and energy Coal, coke and briquettes Other fuels Metalliferous ores and other minerals as Gold Other metals bs Total s Total commodities sector s Other merchandise s Total merchandise s Services Total goods and services
37 311 19 196 68 059 18 541 13 907 157 014 187 727 34 828 222 555 54 726 277 537
39 032 20 303 67 509 20 618 14 358 161 820 195 015 32 038 227 053 54 430 281 596
46 390 21 997 77 745 16 070 13 668 175 870 209 200 34 539 243 739 52 412 296 556
44 101 23 593 79 780 14 256 14 356 176 085 210 740 36 239 246 979 50 344 297 322
46 023 21 414 90 301 14 195 15 216 187 150 na na 261 624 49 315 310 941
a Includes diamonds, which are not included in the balance of payments item by the ABS. b Includes BREE estimates for steel and nickel, which are retained as confidential by the ABS. c For a description of chain volume measures, see ABS, Introduction of chain volume measures, in the Australian National Accounts, cat. no. 5248.0, Canberra. Reference year is 200910. s BREE estimate. f BREE forecast. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Balance of Payments and International Investment Position, Australia, cat. no. 5302.0, Canberra.
Unit export returns

Australia
200607 201.5 206.6 204.3 200708 199.8 235.8 214.3 200809 225.8 398.3 290.6 200910 210.3 258.9 229.3 201011 281.2 319.1 296.3 201112 270.9 343.7 298.7 201213 f 239.2 294.7 260.6
Annual indexes a Metals and other minerals Energy Total resources and energy
a In Australian dollars. Base: 198990 = 100. s BREE estimate. f BREE forecast. Sources: BREE; ABARES.
140
Contribution to exports by sector, balance of payments basis

Australia Proportion of merchandise exports
rural 14.0%
Proportion of exports of goods and services

services 16.0% other merchandise 11.8% rurala 11.7% mineral resources 60.5%
201112
other merchandise 14.1%
mineral resources 72.0%
201011
rural a 13.9%
services 17.1% other merchandise 11.7%
rural a 11.5% mineral resources 59.7%
200910
rural a 15.1%
rural a 12% mineral resources 54.4%
200809
other merchandise 16.2% mineral resources 69.2% rural a 14.6%
200708
other merchandise 20.2% mineral resources 63.4%
rural a 16.4%
a Includes farm, forest and sheries products. Sources: BREE; ABS.
4
Mining Total
Industry gross value added a, b

Australia
unit $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m 200708 26 030 111 957 8 073 119 661 23 294 10 486 7 486 5 161 19 190 5 212 22 965 20 352 113 034 94 317 31 036 92 543 0 1 320 746 200809 30 622 115 515 8 215 123 310 22 556 9 386 6 909 4 319 17 259 5 172 22 660 19 579 107 250 98 381 32 335 91 632 0 1 342 514 200910 30 055 125 365 7 974 133 015 24 205 7 331 7 191 4 133 17 903 5 073 21 296 20 731 107 760 98 639 33 200 91 197 0 1 370 539 201011 32 155 122 548 8 560 131 109 24 085 6 855 7 092 4 125 17 913 4 971 22 203 20 566 107 808 103 338 33 811 93 525 1 1 403 889 201112 34 541 128 448 10 170 138 618 22 886 6 707 7 000 3 839 18 036 4 621 22 354 21 207 106 651 108 043 33 357 93 925 4 599 1 451 679
Agriculture, forestry and fishing Mining (excludes services to mining) Exploration and mining support services Manufacturing Food, beverage and tobacco product Textile, clothing and other manufacturing Wood and paper products Printing and recorded media Petroleum, coal, chemical, etc, product Non-metallic mineral products Metal products Machinery and equipment Total Construction Electricity, gas, water and waste services Taxes less subsidies on products Statistical discrepancy Gross domestic product
a Chain volume measures, reference year is 201011. b ANZSIC 2006. Source: Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product, cat. no. 5206.0, Canberra.
Volume of production indexes

Australia
200708 116.9 124.1 120.4 200809 122.6 119.6 121.1 200910 127.2 123.2 125.3 201011 121.9 138.9 130.5 201112 121.2 140.9 130.9 201213 f 137.3 143.7 140.4
Mine a Energy Metals and other minerals Total resources and energy
a Uranium is included with energy. s BREE estimate. f BREE forecast. Note: The indexes for the different groups of commodities are calculated on a chained weight basis using Fishers ideal index with a reference year of 199798 = 100. Sources: BREE; ABARES; Australian Bureau of Statistics.
142
Employment a, b
Australia
200607 000 352 27 10 46 53 136 215 51 77 51 92 36 161 342 1 025 8 876 10 388 200708 000 355 26 11 47 62 146 230 50 70 54 98 42 159 360 1 063 9 144 10 708 200809 000 363 35 15 49 72 170 227 48 68 51 90 40 157 348 1 029 9 338 10 899 200910 000 369 41 15 52 66 173 228 46 64 52 88 37 146 343 1 004 9 459 11 003 201011 000 350 47 13 69 75 204 228 44 56 55 84 37 147 334 986 9 748 11 288 201112 000 334 55 15 82 97 249 227 39 55 42 88 38 146 319 954 9 875 11 413
Agriculture, forestry and fishing Mining Coal Oil and gas extraction Metal ore Other mining (including services) Total Manufacturing Food, beverages and tobacco Textiles, clothing, footwear and leather Wood and paper product Printing, publishing and recorded media Petroleum, coal and chemical product Non-metallic mineral product Metal product Other manufacturing Total Other industries Total
a Average employment over four quarters. b ANZSIC 2006. Caution should be used when using employment statistics at the ANZSIC subdivision and group levels due to estimates that may be subject to sampling variability and standard errors too high for most practical purposes. Source: Australian Bureau of Statistics, Labour Force, Australia, cat. no. 6291.0, Canberra.
Business income
Australia
200708 $m 40 184 5 757 501 1 184 620 6 192 1 359 7 924 1 937 851 26 325 100 633 167 142 200809 $m 67 402 6 166 245 667 170 2 159 978 3 781 2 695 637 17 498 73 496 158 396 200910 $m 49 889 8 168 409 615 439 3 676 1 155 2 662 3 383 712 21 219 100 407 171 515 201011 $m 76 563 na na 719 na 3 164 1 008 2 277 3 657 na na na 199 736 201112 $m 69 853 5 609 449 542 461 2 184 833 - 750 1 484 452 11 264 104 248 185 365
Company profits in selected industries a Mining Manufacturing Food, beverages and tobacco Textiles, clothing, footwear and leather Wood and paper product Printing, publishing and recorded media Petroleum, coal and chemical product Non-metallic mineral product Metal product Machinery and equipment Other manufacturing Total Other industries (including services) Total (including services)
a Company profits before income tax, based on ANZSIC 2006. Sources: BREE; Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product, cat. no. 5206.0, Canberra; Australian Bureau of Statistics, Company Profits, Australia, cat. no. 5651.0, Canberra; Australian Bureau of Statistics, Business Indicators, Australia, cat. no. 5676.0, Canberra; Australian Bureau of Statistics, Australian Industry, cat. no. 8155.0, Canberra.
All banks lending to business a

Australia
201011 Dec $b Mar $b 58.2 11.2 39.0 30.1 93.3 94.1 316.9 642.9 Jun $b 60.2 12.4 39.1 30.1 92.8 89.4 314.1 638.0 Sep $b 60.3 13.5 41.2 29.3 95.3 93.4 315.4 648.4 201112 Dec $b 57.6 14.3 40.7 28.2 96.6 96.9 334.4 668.9 Mar $b 58.0 15.4 43.3 28.8 98.7 99.6 335.1 678.9 Jun $b 59.7 17.1 42.2 29.9 101.0 101.1 343.6 694.6 201213 Sep $b 60.5 18.9 41.0 29.1 100.6 102.7 342.6 695.5
Agriculture, fishing and forestry Mining Manufacturing Construction Wholesale, retail trade, transport and storage Finance and insurance Other Total
58.5 11.4 37.9 29.6 92.3 99.1 312.2 641.0
a Includes variable and fixed interest rate loans outstanding plus bank bills outstanding. Source: Reserve Bank of Australia, Bank Lending to Business Selected Statistics, Bulletin Statistical Table D8.
144
Capital expenditure of private enterprises

Australia
200708 $m 200809 $m 200910 $m 201011 $m 201112 $m
At current prices Gross fixed capital formation a All sectors New capital expenditure Mining b Manufacturing Food, beverages and tobacco Textiles, clothing, footwear and leather Wood and paper product Printing, publishing and recorded media Petroleum, coal and chemical product Non-metallic mineral product Metal product Machinery and equipment Other manufacturing Total Total surveyed industries Chain volume measures c Gross fixed capital formation a All sectors New capital expenditure Mining Manufacturing Other selected industries Total surveyed industries
336 358 29 201 2 596 112 928 396 2 126 474 4 137 1 110 164 12 340 96 833
353 116 37 977 2 492 118 897 450 2 239 609 4 608 1 160 108 12 682 113 201
357 400 35 185 2 566 140 719 452 2 207 731 3 689 1 112 126 11 743 107 104
372 434 46 847 2 882 70 610 187 2 320 806 4 017 1 340 111 12 343 119 341
410 725 81 997 2 721 115 787 257 2 802 795 4 323 1 366 60 13 227 154 841
344 680 30 989 12 637 53 393 97 266
351 928 38 013 12 233 58 787 109 126
358 787 35 330 11 423 58 563 105 507
372 435 46 846 12 343 60 151 119 340
411 746 81 093 13 370 60 963 155 426
a Estimates taken from ABS national accounts, which include taxation-based statistics. b ANZSIC 2006 Division B. c Reference year is 200910. Sources: BREE; ABARES; Australian Bureau of Statistics, Australian National Accounts: National Income, Expenditure and Product, cat. no. 5206.0, Canberra; Australian Bureau of Statistics, Private New Capital Expenditure and Expected Expenditure, Australia, cat. no. 5625.0, Canberra.
10

200607 $m 200708 $m 200809 $m 200910 $m 201011 $m 201112 $m
At current prices Energy Petroleum Onshore Offshore Total Coal Uranium Total Metals and other minerals a Gold Iron ore Base metals, silver and cobalt b Mineral sands Diamonds Other Total metals and other minerals a Total expenditure
498.2 1727.3 2 225.5 193.2 114.1 2 532.8 455.9 285.4 555.0 37.3 26.9 46.8 1 407.3 3 940.1
493.8 2541.1 3 034.9 234.8 231.5 3 501.2 592.6 449.8 783.2 37.0 21.7 110.8 1 995.1 5 496.3
492.3 3 318.4 3 810.7 297.3 185.2 4 293.2 438.0 588.7 519.1 30.6 10.0 154.3 1 740.7 6 033.9
748.6 2 745.5 3 494.1 321.2 169.1 3 984.4 575.4 524.1 457.2 na na 147.2 1 742.3 5 726.7
756.5 2 558.9 3 315.4 519.7 213.9 4 049.0 652.2 665.0 669.5 na na 196.2 2 217.7 6 266.7
919.7 2 277.3 3 197.0 834.3 153.6 4 184.9 768.0 1 150.6 795.5 na na na 2 965.1 7 150.0
a Uranium is included with energy. b Base metals include copper, lead, nickel and zinc. Source: Australian Bureau of Statistics, Mineral and Petroleum Exploration, Australia, cat. no. 8412.0, Canberra.
146
11

unit 200708 200809 200910 201011 201112 201213 f
Energy Crude oil Dubai West Texas Intermediate Brent dated Uranium (U3O8) a Minerals and metals b Aluminium Copper Gold c Iron ore (negotiated) d Lead Manganese (negotiated) e Nickel Silver Tin Zinc
US$/bbl US$/bbl US$/bbl US$/lb US$/t US$/t US$/oz USc/dmtu US$/t US$/t US$/t USc/oz US$/t US$/t
90.2 96.8 95.2 80.75 2 667 7 785 823 80 2 904 540.9 28 564 1 544 18 529 2 605
63.9 70.3 68.8 51.25 1 868 4 919 874 145 1 459 1 340.1 13 322 1 289 13 576 1 405
73.4 75.2 74.5 43.81 2 016 6 691 1 092 97 2 093 544.9 19 390 1 688 16 202 2 065
75.1 89.3 96.0 57.13 2 383 8 671 1 372 180 2 392 768.0 23 963 2 880 23 960 2 241
109.2 94.3 110.7 51.50 2 166 8 196 1 671 230 2 126 544.1 19 272 3 309 20 011 2 020
107.5 90.8 110.2 44.39 2 006 7 911 1 655 176 2 202 na 17 002 3 075 19 914 1 962
a Average of weekly restricted spot prices over the period, published by Ux Consulting. b Average LME spot price unless otherwise stated. c London gold fix, London Bullion Market Association. d Australian hematite fines to Japan (fob) for Japanese Fiscal Year commencing 1 April. BREE Australia Japan average contract price assessment. e Japanese Fiscal Year commencing 1 April. f BREE forecast. na Not available. Sources: BREE; Australian Bureau of Statistics; International Energy Agency; ISTA Mielke and Co.; London Bullion Market Association; The London Metal Exchange Ltd; Reuters Ltd; Ux Consulting Company; Platts Oilgram; US Department of Energy; World Bureau of Metal Statistics.
12

unit 2008 2009 2010 2011 2012 f 2013 f
Energy Crude oil Production World b OPEC c Consumption b Coal Production Hard coal d Brown coal Exports Metallurgical coal Thermal coal Uranium (U3O8) Production es Consumption Metals Bauxite production Alumina production Aluminium Production Consumption Closing stocks g Iron and steel Production Iron ore h Pig iron Crude steel Iron ore trade Gold Mine production Supply Fabrication consumption i
mbd mbd mbd
86.5 35.8 86.2
85.6 34.1 85.6
87.2 34.6 88.4
84.5 35.0 88.8
85.3 35.2 89.6
86.1 35.4 92.1
Mt Mt Mt Mt kt kt kt kt kt kt kt Mt Mt Mt Mt t t t
5 752 965 233 704 51.6 76.2 217 469 77 564 39 669 36 900 4 709 1 693 927 1 330 889 2 429 4 014 3 027
5 866 913 220 723 60.4 73.4 193 038 73 667 37 187 34 765 6 485 1 588 900 1 220 955 2 611 4 380 2 517
6 218 930 264 797 63.9 79.8 203 460 81 023 41 502 40 173 6 502 1 845 1 037 1 415 1 055 2 741 4 383 2 784
6 637 935 253 866 63.3 73.8 242 256 89 289 44 645 42 398 6 999 1 914 1 107 1 510 1 056 2 833 4 494 2 760
6 443 954 272 958 67.2 75.1 256 380 91 564 45 782 44 327 7 860 1 915 1 129 1 533 1 082 2 836 4 478 2 614
na na 283 988 67.9 82.1 259 504 92 680 46 340 46 162 8 037 1 985 1 167 1 583 1 135 2 956 4 516 2 580
Continued
148
12

unit kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt 2008 18 501 18 138 845 9 075 9 072 307 1 382 1 278 155 332 337 32 11 772 11 574 820 11 422 2 695 615 1 282 2009 18 612 18 178 1 125 9 054 9 069 390 1 322 1 234 234 333 322 46 11 282 10 920 1 221 9 881 2 247 572 1 067 2010 19 177 19 332 1 017 9 682 9 683 447 1 446 1 464 213 356 368 35 12 885 12 637 1 562 11 470 2 749 708 1 369 2011 19 791 19 481 985 10 372 10 216 623 1 598 1 584 172 369 373 30 13 120 12 769 1 769 11 376 2 545 679 1 428 2012 f 20 424 20 549 1 078 10 653 10 556 720 1 750 1 661 217 381 362 34 12 660 12 394 2 195 11 776 2 610 639 1 376 2013 f 21 571 21 396 1 252 11 099 10 881 938 1 754 1 715 256 382 369 46 13 479 13 090 2 584 12 123 2 675 680 1 421
Base metals Copper Production j Consumption Closing stocks Lead Production j Consumption Closing stocks Nickel Production j Consumption Closing stocks Tin Production j Consumption Closing stocks Zinc Production j Consumption Closing stocks Mineral sands Production Ilmenite k Titaniferous slag Rutile concentrate Zircon concentrate
a Some figures are not based on precise or complete analyses. b 1 million litres (1 megalitre) a year equals about 17.2 barrels a day. c Includes OPEC natural gas liquids. d Includes anthracite and bituminous coal, and for the United States, Australia and New Zealand, sub-bituminous coal. e World production data have been revised to exclude reprocessed uranium. g LME and producer stocks. h Chinas iron ore production adjusted to world average. i Includes jewellery consumption. j Primary refined metal. k Excludes some small producers and large tonnages produced from ilmenitemagnetite ore in the Commonwealth of Independent States. s BREE estimate. f BREE forecast. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics; Consolidated Gold Fields; Economic Commission for Europe; Gold Fields Mineral Services; International Atomic Energy Agency; International Energy Agency; International Iron and Steel Institute; International LeadZinc Study Group; International Nickel Study Group; ISTA Mielke and Co.; Metallgesellschaft A.G.; UNCTAD Trust Fund on Iron Ore; United Nations; World Bureau of Metal Statistics.
13

unit 200708 200809 200910 201011 201112 201213 f
Energy Coal Black, saleable Black, raw Brown Petroleum Crude oil and condensate Petroleum products a Gas b LPG (naturally occurring) Uranium (U3O8) Metalliferous minerals and metals Aluminium Bauxite Alumina Aluminium (ingot metal) Copper Mine production d Refined, primary Gold Mine production d Iron and steel Ore and concentrate e Iron and steel Lead Mine production d Refined g Bullion Manganese Ore, metallurgical grade Metal content of ore Nickel h Mine production d Refined, class I s Refined, class II i Total ore processed j
Mt Mt Mt ML ML Gm3 ML t
326.2 422.8 66.0 25 610 k 39 575 41.7 3 971 10 123
339.6 446.2 68.3 26 407 k 39 546 44.5 3 930 10 311
367.4 475.2 68.8 25 583 k 37 200 50.1 4 097 7 109
345.2 454.0 65.7 24 745 k 38 393 53.1 3 907 7 069
347.2 s 458.6 s na 22 408 36 081 50.5 3 652 7 657
408.8 s 530.9 s na 22 988 35 163 60.8 4 922 8 177
Mt kt kt kt kt t Mt Mt kt kt kt kt kt kt kt kt kt
63.5 19 359 1 964 847 444 229.7 324.7 8.2 641 203 152 5 428 2 188 190 105 15 222
64.1 19 597 1 974 890 499 217.8 353.2 5.6 596 213 155 3 730 1 504 185 95 15 213
67.8 20 057 1 920 819 395 239.8 423.4 6.9 617 189 148 5 795 2 365 157 114 6 197
68.8 19 041 1 938 952 485 264.5 447.0 7.3 697 190 133 6 784 2 756 195 90 10 236
72.9 19 283 1 938 926 486 252.8 503.7 5.4 634 303 257 7 357 3 014 236 107 16 278
79.4 22 881 1 812 1 001 459 255.4 538.3 4.8 548 179 150 7 420 3 116 229 114 10 267
Continued
150
13

unit 200708 200809 200910 201011 201112 201213 f
Metalliferous minerals and metals (continued) Silver t Mine production d Refined t Tin t Mine production d Refined t Titanium Ilmenite concentrate s kt Leucoxene concentrate s kt Rutile concentrate s kt kt Synthetic rutile s kt Titanium dioxide pigment s Zinc kt Mine production d Refined kt Zircon concentrate s kt Other minerals Diamonds 000 ct Salt kt
1 867 605 1 767 na 2 205 153 332 672 201 1 431 507 563 16 528 9 826
1 764 751 4 045 na 1 932 117 285 732 214 1 288 506 485 15 169 11 314
1 809 701 19 829 na 1 398 123 361 553 222 1 362 515 408 11 138 11 772
1 792 712 18 410 na 1 275 200 467 542 204 1 479 499 674 8 027 11 562
1 862 847 8 150 s na 1 331 228 454 480 204 1 567 505 706 10 168 11 413 s
1 904 752 6 457 s na 1 335 228 465 484 204 1 522 504 613 12 160 11 159 s
a Excludes production from petrochemical plants. b Includes ethane, methane and coal seam gas. c Uranium is included with energy. d Primary production, metal content. e Excludes iron oxide not intended for metal extraction. g Includes lead content of lead alloys from primary sources. h Products with a nickel content of 99 per cent or more. Includes electrolytic nickel, pellets, briquettes and powder. i Products with a nickel content of less than 99 per cent. Includes ferronickel, nickel oxides and oxide sinter. j Includes imported ore for further processing. k Energy Quest. s BREE estimate. f BREE forecast. Sources: BREE; ABARES; Australian Bureau of Statistics; Consolidated Gold Fields; Coal Services Pty Limited; Department of Resources, Energy and Tourism; Energy Quest; International Nickel Study Group; Queensland Government, Department of Natural Resources and Mines.
14

200708 200809 200910 201011 201112 201213 f
unit Resources and energy Resources Metalliferous minerals and metals c Aluminium Bauxite kt Alumina kt Aluminium (ingot metal) kt Copper Ore and concentrate d kt Refined kt t Gold e Iron and steel Iron ore and pellets Mt kt Iron and steel g Lead Ores and concentrates kt Refined kt Bullion kt Manganese d kt Nickel es kt Titanium Ilmenite concentrate h kt Leucoxene concentrate kt Rutile concentrate kt Synthetic rutile s kt Titanium dioxide pigment kt Refined silver t Tin e t Zinc Ores and concentrates d kt Refined kt kt Zircon concentrate i Other minerals Diamonds 000 ct Salt kt Energy Crude oil a ML LPG ML LNG bs Mt Petroleum products ML Metallurgical coal Mt Thermal coal Mt Uranium (U3O8) t
7 917 15 739 1 650 1 694 296 382 294 2 131 308 193 169 5 105 211 894 69 399 513 175 335 3 079 2 323 411 637 16 528 10 686 15 975 2 589 14 1 807 137 115 10 139
7 470 16 395 1 748 1 797 361 437 324 1 741 381 261 147 3 226 194 1 538 61 550 512 141 423 4 159 2 101 451 685 16 279 10 978 16 588 2 500 15 1 164 125 136 10 114
8 023 16 653 1 624 1 928 271 335 390 1 549 491 186 151 5 648 221 1 763 18 575 513 181 420 6 031 2 271 425 748 10 355 11 185 18 064 2 776 18 850 157 135 7 555
8 595 16 227 1 686 1 750 375 301 407 1 785 494 213 93 6 190 210 1 804 27 491 517 195 198 5 426 2 317 410 963 9 900 11 162 19 638 2 471 20 760 140 143 6 950 s
10 518 16 592 1 693 1 814 395 304 470 1 186 438 217 159 6 853 240 2 045 31 334 536 179 269 4 895 2 382 456 846 11 526 10 884 19 212 2 115 19 1 151 142 158 6 917 s
11 241 19 763 1 647 2 146 372 320 522 996 437 199 142 6 768 246 2 040 31 368 485 146 283 6 129 2 242 431 779 12 160 10 773 21 770 2 365 24 1 104 153 187 8 492 s
a Includes condensate and other refinery feedstock. b 1 million tonnes of LNG equals aprroximately1.31 billion cubic metres of gas. c Uranium is included with energy. d Quantities refer to gross weight of all ores and concentrates. e Quantities refer to total metallic content of all ores, concentrates, intermediate products and refined metal. g Includes all steel items in ABS, Australian Harmonized Export Commodity Classification, ch. 72, Iron and steel, excluding ferrous waste and scrap and ferroalloys. h Excludes leucoxene and synthetic rutile. i Data from 199192 refer to standard grade zircon only. s BREE estimate. f BREE forecast. Sources: BREE; ABARES; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra; Australian Mining Industry Council; Department of Foreign Affairs and Trade; Department of Resources, Energy and Tourism; International Nickel Study Group.
152
15

200708 $m 200809 $m 200910 $m 201011 $m 201112 $m 201213 f $m
Resources Metalliferous minerals and metals Aluminium Bauxite s Alumina Aluminium (ingot metal) Copper c Ore and concentrate Refined Gold c Iron and steel Iron ore and pellets Iron and steel Lead c Ores and concentrates Refined Bullion Manganese Ores and concentrate s Titanium Ilmenite concentrate d Leucoxene concentrate Rutile concentrate Synthetic rutile s Titanium dioxide pigment Nickel s Refined silver Tin c Zinc c Ores and concentrates Refined Zircon concentrate e Total metalliferous minerals and metals Other minerals Diamonds s Salt Other Total other minerals Total resources
206 5 809 4 967 4 151 2 579 10 903 20 511 1 562 757 674 595 1 532 104 23 277 305 375 5 412 187 42 2 031 1 319 421 64 745 625 232 6 169 7 026 71 771
192 6 015 4 724 3 618 2 245 16 146 34 239 1 363 645 560 432 1 406 171 37 335 258 396 2 717 245 70 935 923 540 78 212 676 237 4 770 5 683 83 895
178 4 969 3 838 4 526 1 980 12 996 35 075 1 120 998 425 409 1 395 197 11 382 269 448 3 875 254 101 1 237 977 370 76 031 471 247 5 270 5 988 82 019
229 5 218 4 178 5 130 3 292 13 016 58 387 1 303 1 301 511 248 1 407 198 17 390 315 527 4 096 164 126 1 479 893 532 102 955 366 251 5 521 6 139 109 094
296 5 146 3 797 5 386 3 115 15 462 62 695 983 1 184 475 541 1 229 225 22 252 294 571 4 056 268 102 1 375 917 327 108 719 386 245 6 203 6 834 115 553
316 6 132 3 383 5 709 2 853 16 971 56 971 835 1 139 511 473 1 226 224 22 261 264 436 3 321 311 125 1 250 821 194 103 749 437 242 6 709 7 389 111 138
Continued
15

200708 $m 10 484 1 182 5 854 1 457 1 323 16 038 8 365 887 45 591 43 492 117 362 115 904 31 340 29 971 148 702 145 875 200809 $m 8 757 1 044 10 079 1 537 788 36 813 17 885 990 77 892 75 660 161 788 160 251 35 905 33 917 197 693 194 168 200910 $m 9 534 1 105 7 789 1 315 566 24 526 11 886 757 57 478 55 771 139 497 138 183 32 079 30 473 171 577 168 656 201011 $m 12 245 1 068 10 437 1 508 526 29 793 13 956 610 s 70 143 67 695 179 237 177 729 36 079 34 366 215 316 212 095 201112 $m 13 205 971 11 949 1 589 890 30 700 17 118 607 s 77 029 73 922 192 583 190 994 38 095 37 370 230 677 228 364 201213 f $m 14 308 1 113 16 199 1 587 830 22 976 17 615 686 s 75 314 73 350 186 452 184 865 37 286 35 298 223 738 220 163
Energy Crude oil a LPG LNG Bunker fuel b Other petroleum products Metallurgical coal Thermal coal Uranium (U3O8) Total energy Derived as sum of above On balance of payments basis (excl. bunker fuel) Total resources and energy exports Derived as sum of above On balance of payments g Total agricultural exports At current prices On balance of payments g Total commodity exports h Derived as sum of above On balance of payments g
a Includes condensate and other refinery feedstock. b International ships and aircraft stores. c Value of metals contained in host mine and smelter products are not available separately and are included in the value of the mineral product or metal in which they are exported. d Excludes leucoxene and synthetic rutile; data from 199192 refer to bulk ilmenite only. e Data refer to standard grade zircon only. g As derived in table 1. h Sum of resources, energy and agricultural commodity exports. s BREE estimate. f BREE forecast. Sources: BREE; ABARES; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra; Department of Resources, Energy and Tourism.
154
16

200708 $m 10 444 154 7 311 2 225 311 17 149 724 12 730 80 80 1 261 42 479 200809 $m 10 417 181 11 250 3 191 269 14 727 2 166 13 129 193 223 1 343 47 098 200910 $m 27 442 118 7 739 1 889 259 15 031 1 219 11 296 10 107 1 530 39 666 201011 $m 18 397 127 5 426 2 121 417 20 183 1 929 11 445 57 490 1 487 44 097 201112 $m 37 407 106 6 814 2 113 223 21 125 2 151 16 720 55 950 1 966 52 668
Resources and energy Aluminium (ingot metal) Diamonds Ferroalloys Gold (refined and unrefined) Ingot steel Iron ore Petroleum Crude oil a Natural gas Petroleum products b Phosphate rock Phosphates Silver Other Total resources and energy
a Includes condensate and other refinery feedstock. b Includes LPG. Sources: BREE; Australian Bureau of Statistics, International Trade, Australia, cat. no. 5465.0, Canberra.
17 17
Quarterly commodity production, Australia

quarter 201011 Mar Jun 17 445 4 666 486 116 86 16 239 116 125 1 607 66 75 119 176 1 704 164 40 51 1 840 53 14 25 3 5 780 924 13 513 9 646 2 494 476 212 4 600 322 58 122 129 51 1 185 384 125 183 5 1 13 9 3 Sep 18 007 4 726 490 125 95 na 235 105 114 2 335 65 81 124 952 1 753 157 41 42 1 907 53 9 26 4 749 033 193 318 067 428 250 3 100 326 57 127 118 51 2 123 401 126 211 201112 Dec 18 349 4 864 493 119 89 na 253 112 121 1 953 64 86 130 226 1 214 634 144 174 1 766 61 20 23 4 5 954 956 12 297 9 193 2 957 481 247 3 100 329 57 114 123 51 2 054 394 133 191 Mar 17 844 4 866 480 104 81 na 212 115 124 2 840 61 77 118 699 1 212 146 36 39 1 871 60 19 29 4 5 190 908 11 621 9 298 2 544 426 168 1 496 354 57 98 105 51 1 633 373 117 164 Jun 18 696 4 828 474 111 82 na 226 116 127 3 040 63 77 129 817 1 208 171 36 48 1 814 63 21 28 4 5 499 918 13 344 8 609 2 844 528 181 1 506 322 57 115 135 51 1 847 400 128 141 5 1 15 9 2 201213 Sep 19 623 5 530 459 125 97 na 236 97 107 3 040 61 78 133 193 1 208 171 40 28 1 981 62 13 32 3 918 025 994 956 690 405 161 1 506 333 57 113 120 51 2 381 359 124 150 Dec p 20 119 5 690 451 137 s 106 s na 240 93 103 3 040 65 76 138 323 1 208 160 35 45 1 865 61 13 27 2 7 534 824 15 011 9 456 2 743 369 271 1 506 335 57 113 120 51 2 356 409 129 s 150
Aluminium Bauxite kt Alumina kt Aluminium (ingot metal) kt Coal Black, raw Mt Black, saleable Mt Mt Brown as Copper kt Mine production bs kt Blister c kt Refined s Diamonds '000 ct Gold t Mine production bs Refined t Iron Iron ore and concentrate kt kt Iron and steel s Lead Mine production bs kt Bullion c kt Refined kt Manganese s kt Nickel kt Mine production bs Intermediate kt Refined, class 1 kt Refined, class 2 kt Petroleum, field Crude oil and condensate e ML LPG (naturally occurring) ML Gas d Mm3 Petroleum, total refinery ML Salt s kt Silver t Mine production bs Refined t Tin t Mine production bs Titanium s Ilmenite concentrate kt Leucoxene concentrate kt Rutile concentrate kt kt Synthetic rutile Titanium dioxide pigment kt Uranium oxide (U3O8) t Zinc kt Mine production bs Refined kt kt Zircon concentrate s
16 431 4 471 476 101 77 16 232 108 117 1 667 63 78 102 978 1 867 140 27 49 1 448 48 13 23 2 5 316 913 12 265 9 483 2 885 340 189 4 600 300 53 111 133 51 1 668 337 123 177
a Quarterly data are not available. b Total metallic content of minerals produced. c Metallic content. d Includes methane, ethane and coal seam gas. e Energy Quest. p Preliminary. s BREE estimate. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; Coal Services Pty Limited; Energy Quest; Queensland Government, Department of Mines and Energy; Department of Resources, Energy and Tourism, Canberra.
156
18 18
Quarterly commodity exports, by volume, Australia

quarter 201011 Mar Jun 2 663 4 094 392 33.04 36.45 222 2 050 71.05 105 499 371 177 1 841 54 4 604 4.98 557 294 2 595 1 217 496 8 98 123 53 1 227 411 247 Sep 2 724 4 054 429 35.33 39.66 219 2 684 78.07 117 314 458 168 1 787 56 4 565 4.59 602 304 2 793 1 234 518 8 85 136 51 1 729 372 237 201112 Dec 2 803 4 103 439 36.86 41.14 255 2 961 80.71 121 273 206 193 1 601 57 4 856 4.77 465 97 2 802 1 240 527 8 82 136 41 1 729 423 219 Mar 2 313 4 327 422 34.35 36.94 210 2 840 61.93 108 433 263 155 1 427 63 4 732 4.56 516 283 2 523 922 492 8 81 141 51 1 729 374 196 Jun 2 678 4 108 403 35.86 40.69 242 3 040 83.00 123 022 258 187 2 038 64 5 060 5.33 532 468 2 766 1 499 508 8 86 123 37 1 729 403 195 201213 Sep 2 769 4 660 399 34.38 44.92 223 3 040 69.29 125 287 260 165 1 648 61 5 650 6.05 693 356 2 571 1 514 512 8 86 126 27 2 481 379 196 Dec p 2 594 5 176 426 40.03 48.36 276 3 040 74.00 137 044 260 183 1 623 67 5 373 5.72 538 194 2 652 1 763 511 8 89 121 33 2 456 422 193
Aluminium Bauxite kt kt Alumina a Aluminium (ingot metal) kt Coal, black Metallurgical Mt Thermal Mt kt Copper bs '000 ct Diamonds cs t Gold bs Iron Iron ore and pellets kt kt Iron and steel s kt Lead bs Manganese ore and concentrate kt kt Nickel ds Petroleum Crude oil and other refinery feedstock ML Mt LNG s LPG ML Refinery products ML kt Salt s t Tin b Titanium Ilmenite concentrate kt Leucoxene concentrate kt Rutile concentrate kt Synthetic rutile s kt Titanium dioxide pigment kt Uranium oxide (U3O8) s t kt Zinc b Zircon concentrate kt
2 105 3 728 421 27.47 30.26 208 2 500 77.78 93 737 393 158 1 681 51 4 029 4.85 536 102 3 081 1 279 433 7 123 131 50 1 701 343 260
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. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
19 19
Quarterly commodity exports, by value (fob), Australia

quarter 201011 Mar Jun 70 1 397 998 8 147 3 637 2 132 69 11 3 143 16 272 297 532 353 988 3 204 2 633 256 208 58 10 33 55 5 101 85 152 114 651 143 1 703 47 456 65 812 78 255 Sep 74 1 366 1 043 8 836 4 253 2 212 94 10 3 898 17 992 344 522 322 908 3 111 2 951 265 225 63 48 29 57 5 64 78 164 152 567 117 1 889 51 660 70 579 83 176 201112 Dec 83 1 306 983 8 636 4 664 2 251 106 8 4 210 16 126 305 627 310 990 3 319 3 036 195 92 63 42 25 58 5 52 73 127 152 625 87 2 031 50 591 69 772 82 618 Mar 63 1 243 908 6 609 3 984 1 851 93 16 3 143 13 045 135 482 228 1 077 3 311 2 818 268 226 57 57 18 54 6 73 76 153 152 520 60 881 41 611 58 489 71 353 Jun 76 1 231 862 6 619 4 218 2 186 93 13 4 211 15 532 199 570 369 1 081 3 464 3 144 244 347 62 121 29 56 6 64 67 127 152 578 63 1 347 47 132 66 326 78 924 201213 Sep 79 1 254 792 5 842 4 247 1 890 107 12 3 785 12 906 201 447 316 939 3 714 4 061 284 245 58 60 27 56 6 63 69 81 202 519 59 1 290 43 613 62 302 75 277 Dec p 73 1 424 908 5 397 4 302 2 234 97 9 4 088 13 305 219 538 294 903 3 574 3 444 280 138 60 19 35 56 6 63 65 91 199 548 57 1 781 44 208 62 489 75 731
Aluminium Bauxite Alumina a Aluminium (ingot metal) Coal, black Metallurgical Thermal Copper e Diamonds cs Gems, other than diamonds Gold, refined Iron Iron ore and pellets Iron and steel s Lead e Manganese ore and concentrate Nickel es Petroleum Crude oil and other refinery feedstock LNG LPG Refinery products Salt s Silver, refined Tin e Titanium Ilmenite concentrate Leucoxene concentrate Rutile concentrate Synthetic rutile s Titanium dioxide pigment Uranium oxide (U3O8) s Zinc e Zircon concentrate Other mineral resources f Total resources and energy g Total merchandise Total goods and services
$m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m
59 1 251 1 076 5 417 3 007 2 041 83 17 3 375 13 707 292 501 384 1 131 3 111 2 463 246 78 70 43 31 48 4 94 79 136 157 570 166 1 028 40 667 56 794 69 145
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 resources and energy exports, below, and the sum of the above items. g Total resources and energy exports on an BREE balance of payments basis. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
158
20 20
Quarterly resources and energy export unit returns, Australia

201011 Mar Jun 369.1 319.6 339.4 Sep 388.5 321.3 348.0
quarter 201112 Dec 382.6 296.3 329.8 Mar 350.2 273.4 303.2 Jun 336.9 282.5 304.1 201213 Sep 325.5 249.9 279.2 Dec p 294.1 241.7 262.3
Energy Metals and other minerals Total resources and energy
341.7 311.8 324.4
a Base: 1994-95 = 100. p Preliminary. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
21 Quarterly commodity imports, Australia 21 Australia

201011 Mar Quantity Diamonds a Iron ore Ingot steel Ferroalloys Petroleum Crude oil and other refinery feedstock Natural gas Refinery products Phosphate rock Value Diamonds a Gold b Iron ore Ingot steel Ferroalloys Nickel Petroleum Crude oil and other refinery feedstock Natural gas Refinery products Phosphate rock Silver Other Total '000 ct kt kt kt ML kt ML kt $m $m $m $m $m $m $m $m $m $m $m $m $m 156 818 401 12 8 519 1 179 4 317 13 94 1 182 86 471 24 49 5 800 427 2 310 1 111 483 11 039
Quarterly commodity imports

quarter 201112 Jun 133 1 288 437 14 8 073 1 140 5 219 126 90 1 275 102 514 28 47 5 739 413 3 841 19 254 383 12 703 Sep 259 1 555 445 15 7 184 1 226 5 646 80 101 1 822 100 544 28 54 4 963 594 3 936 15 572 420 13 150 Dec 151 1 314 433 14 7 269 1 089 6 180 169 107 2 043 62 521 27 39 5 173 561 4 535 29 187 586 13 871 Mar 107 841 491 23 7 832 1 144 5 081 10 101 1 507 29 533 26 48 5 641 595 4 063 1 93 378 13 016 Jun 122 844 473 14 7 210 814 5 288 61 98 1 442 31 515 26 18 5 348 401 4 186 10 98 515 12 688 201213 Sep 167 1 325 475 15 8 553 1 108 5 153 177 108 1 564 43 507 29 18 5 640 580 3 915 29 104 471 13 006 Dec p 73 1 004 469 22 7 577 1 221 6 233 53 110 1 223 25 463 23 13 5 209 604 4 781 9 119 534 13 115
a Includes sorted and unsorted, gem and industrial diamonds, and diamond dust and powder. b Refined and unrefined bullion. p Preliminary. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
22 22
Quarterly private resources and energy exploration expenditure, Australia

quarter 201011 201112 Sep 201112 Dec Mar Jun 201213 Sep Dec
Energy Petroleum Onshore Offshore Total Coal Uranium Total energy Metals and other minerals Copper Diamonds Gold Iron ore Mineral sands Nickel, cobalt Silver, lead and zinc Other Total metals and other minerals Total expenditure
$m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m
756.5 2 558.9 3 315.4 519.7 213.9 4 049.0 323.1 na 652.2 665.0 na 270.9 75.5 196.2 2 217.7 6 266.7
919.7 2 277.3 3 197.0 834.3 153.6 4 184.9 442.6 na 768.0 1 150.6 na 265.4 87.5 na 2 965.1 7 150.0
248.6 531.6 780.2 227.4 54.0 1 061.6 108.9 na 184.2 234.7 na 73.6 22.0 62.7 702.0 1 763.6
278.3 618.7 897.0 217.7 45.6 1 160.3 114.6 2.2 200.0 311.8 11.0 49.3 22.9 57.3 769.1 1 929.4
163.1 432.9 596.0 177.5 29.3 802.8 98.7 1.1 168.8 267.9 9.3 64.1 21.2 38.2 669.3 1 472.1
229.7 694.1 923.8 211.7 24.7 1 160.2 120.4 na 215.0 336.2 na 78.4 21.4 na 824.7 1 984.9
275.7 808.3 1 084.0 170.6 23.5 1 278.1 102.5 1.4 194.4 280.5 10.9 43.9 21.1 45.9 700.6 1 978.7
354.6 1 044.0 1 398.6 149.2 20.8 1 568.6 92.1 1.6 162.7 278.4 11.0 49.3 19.6 39.2 653.9 2 222.5
p Preliminary. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
160
23 23
Resources and energy prices Alumina avg export unit value A$/t Aluminium (high grade) LME cash US$/t 2 016.26 2 382.92 2 165.74 2 172.19 2 073.55 2 018.60 2 2 2 2 2 1 1 1 2 1 1 2 131.69 203.88 182.91 046.53 000.48 884.76 874.14 838.07 053.88 975.17 936.57 086.63 Gold London AM fix US$/oz 1 091.75 1 371.59 1 671.32 1 668.08 1 735.98 1 652.73 1 1 1 1 1 1 1 1 1 1 1 1 652.39 743.10 675.06 646.06 587.04 591.52 592.78 627.46 741.93 746.35 724.35 684.98 Lead LME cash US$/t 2 093.11 2 392.32 2 126.18 1 948.57 1 982.05 2 011.40 2 2 2 2 1 1 1 1 2 2 2 2 088.89 126.12 061.45 063.05 998.91 855.42 876.39 895.75 169.28 153.30 179.48 275.50 Iron ore a avg export unit value A$/t 89.96 143.50 133.38 122.40 121.31 107.85 112.91 110.92 115.10 118.70 121.49 117.08 107.91 97.83 85.35 87.42 92.24 94.63 Zinc (high grade) LME cash US$/t 2 064.76 2 240.91 2 019.59 1 859.14 1 916.11 1 911.76 1 2 2 1 1 1 1 1 2 1 1 2 973.75 058.21 034.55 996.74 929.91 855.79 851.18 813.80 002.10 911.78 904.30 037.58 Thermal Metallurgical coal coal avg export avg export unit value unit value A$/t 88.06 97.37 108.04 113.44 114.10 112.71 110.35 106.42 106.36 103.18 105.01 101.89 97.15 94.21 91.94 92.87 88.15 85.71 Silver d London fix USc/troy oz 1 688.07 2 880.20 3 309.12 3 203.10 3 308.18 3 041.15 2 3 3 3 2 2 2 2 3 3 3 3 938.28 414.05 295.32 152.57 875.48 798.38 743.18 876.96 365.50 318.74 277.32 179.43 A$/t 155.95 212.12 215.60 244.51 235.78 223.65 203.38 184.38 183.94 184.54 186.00 181.89 173.37 171.32 163.09 142.01 130.92 132.09 Nickel LME cash US$/t 19 390.25 23 962.89 19 272.39 18 886.43 17 882.05 18 170.24 19 20 18 17 17 16 16 15 17 17 16 17 751.82 465.00 635.22 897.37 024.32 539.21 159.09 657.73 215.50 245.43 297.50 406.58 Crude oil b West Texas Intermediate spot price US$/bbl 75.15 89.29 94.27 86.43 97.13 98.81 100.17 102.31 106.20 103.39 94.55 72.94 87.92 94.16 94.65 89.55 86.56 83.68 Brent spot price US$/bbl 74.51 96.00 110.71 108.79 110.49 102.79 111.27 119.10 124.54 120.37 110.29 83.85 102.59 112.68 113.03 111.58 109.22 104.34
200910 201011 201112 2011 October November December 2012 January February March April May June July August September October November December
298.39 321.54 310.12 331.43 320.50 304.37 281.80 283.09 296.89 299.15 303.55 295.76 279.45 265.07 262.46 280.86 274.19 270.51
Uranium c Copper Industry (high grade) spot price LME cash US$/lb 200910 201011 201112 2011 October November December 2012 January February March April May June July August September October November December 43.81 57.13 51.50 52.00 51.75 51.75 52.00 52.00 51.00 51.75 52.00 50.75 49.50 48.50 46.50 43.00 42.00 43.38 US$/t 6 691.13 8 670.65 8 195.57 7 338.81 7 551.77 7 565.57 8 8 8 8 7 7 7 7 8 8 7 7 021.20 422.69 457.05 259.63 919.93 420.11 589.39 492.45 068.38 069.52 694.20 962.58
Rutile e Zircon g avg export avg export unit value unit value A$/t 664.64 793.37 756.42 1 306.34 1 370.18 1 496.33 2 2 2 2 2 2 2 2 2 2 2 2 664.85 427.19 461.96 764.31 947.67 977.77 842.20 745.31 795.69 922.80 301.46 194.41 A$/t 494.19 551.92 386.75 2 408.35 2 542.15 2 518.46 2 2 2 2 2 2 2 2 2 1 1 1 342.07 194.57 266.92 201.14 495.04 450.77 432.78 355.54 319.38 945.65 543.72 572.39
a Lump and fines. b US Department of Energy, Energy Information Administration. c Average of weekly restricted spot price published by The Ux Consulting Company. d London fix rate from May 2001; Handy and Harman, commercial bar, minimum 99.9 per cent prior to May 2001. e Bagged only after August 1999. g Bagged only after September 1999. s BREE estimate. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange; London Bullion Market Association; The Ux Consulting Company; US Department of Energy.
24 24

quarter 201011 201112 Sep 201112 Dec Mar Jun 201213 Sep Dec p
Aluminium
Mine Bauxite Queensland Western Australia s Northern Territory Australia s Alumina content s Smelter and refinery Alumina Aluminium (ingot metal) Quantity Bauxite Alumina ab Aluminium (ingot metal) Chinese Taipei Indonesia Japan Korea, Rep. of Malaysia Thailand Other Total Value Bauxite Alumina ab Aluminium (ingot metal) Quantity Bauxite Alumina ab Aluminium (ingot metal) Value Bauxite Alumina a Aluminium (ingot metal) Alumina c Aluminium LME cash d Australia c
Production
kt kt kt kt kt kt kt
19 504 42 340 6 982 68 827 26 039 19 041 1 938
21 563 43 768 7 565 72 895 27 989 19 283 1 938
5 403 10 745 1 860 18 007 6 935 4 726 490
5 600 10 833 1 916 18 349 7 089 4 864 493
4 974 11 008 1 862 17 844 6 774 4 866 480
5 586 11 183 1 927 18 696 7 191 4 828 474
6 179 11 358 2 086 19 623 7 643 5 530 459
6 518 11 533 2 068 20 119 7 869 5 690 451
Exports
kt kt kt kt kt kt kt kt kt kt $m $m $m
8 595 16 227 210 104 569 352 79 130 241 1 686 229 5 218 4 178
10 518 16 592 168 137 587 264 81 144 312 1 693 296 5 146 3 797
2 724 4 054 41 31 153 77 22 40 65 429 74 1 366 1 043
2 803 4 103 55 33 163 64 16 32 76 439 83 1 306 983
2 313 4 327 37 36 134 61 19 30 106 422 63 1 243 908
2 678 4 108 35 37 137 62 24 42 65 403 76 1 231 862
2 769 4 660 51 28 131 63 18 42 67 399 79 1 254 792
2 594 5 176 60 30 155 84 16 34 47 426 73 1 424 908
Imports
kt kt kt $m $m $m A$/t US$/t A$/t
7 13 6 4 14 18 322 2 383 2 478
7 10 15 3 12 37 310 2 166 2 242
2 2 4 1 3 10 337 2 419 2 433
2 2 5 1 2 12 318 2 088 2 237
2 2 3 1 4 7 287 2 175 2 151
2 2 4 1 2 9 300 1 981 2 141
1 2 7 1 3 16 269 1 914 1 984
1 3 8 1 3 19 275 1 996 2 133
Prices
a Includes aluminium hydroxide. b Country details confidential. c Average export unit value. d High grade. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange.
162
25 25

Coal
Mine Black coal, raw Underground Opencut New South Wales Queensland Western Australia a South Australia a Tasmania a Australia Black coal, saleable Underground Opencut New South Wales Queensland Western Australia a South Australia a Tasmania a Australia Brown coal b Victoria Quantity Metallurgical coal, high quality Brazil China Chinese Taipei European Union 27 India Japan Korea, Rep. of Other Total Metallurgical coal, other c European Union 27 India Japan Other Total Total metallurgical coal Thermal coal Chinese Taipei European Union 27 China Japan Korea, Rep. of Other Total
Production
Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt
107.81 346.14 204.85 239.62 5.00 3.84 0.64 453.95 76.43 268.81 156.95 179.83 4.00 3.84 0.62 345.24 65.66
94.40 364.23 221.00 228.15 5.00 3.84 0.64 458.63 73.12 274.08 167.17 171.57 4.00 3.84 0.62 347.20 na
24.89 99.86 56.76 65.62 1.25 0.96 0.16 124.75 20.11 74.50 43.76 48.73 1.00 0.96 0.15 94.60 na
23.89 95.00 54.11 62.41 1.25 0.96 0.16 118.89 18.95 70.34 41.11 46.07 1.00 0.96 0.15 89.29 na
21.82 82.64 53.07 49.02 1.25 0.96 0.16 104.46 16.42 64.67 39.88 39.10 1.00 0.96 0.15 81.10 na
23.80 86.73 57.06 51.10 1.25 0.96 0.16 110.53 17.64 64.56 42.43 37.66 1.00 0.96 0.15 82.21 na
na na 62.34 na s 1.25 0.96 0.16 125.39 na na 47.22 na 1.00 0.96 0.15 96.55 na
na s na s 62.37 na s 1.25 0.96 0.16 137.20 s na s na s 46.83 na s 1.00 0.96 0.15 105.65 s na
Exports
Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt Mt
2.88 9.64 4.06 15.25 25.19 23.42 8.10 3.06 91.60 1.82 5.72 19.19 22.12 48.85 140.46 20.12 0.14 16.67 66.96 28.19 27.90 143.32
2.34 9.84 4.51 15.93 23.28 22.11 8.86 4.72 91.59 1.70 6.02 18.02 25.04 50.77 142.40 17.52 0.04 28.46 69.80 28.85 42.23 158.44
0.64 1.76 1.05 5.03 6.05 5.75 2.41 1.30 23.99 0.25 1.24 4.09 5.75 11.34 35.33 5.30 0.00 2.45 17.56 7.54 9.25 39.66
0.53 2.95 1.07 3.85 5.79 6.20 2.64 1.12 24.15 0.67 1.37 5.25 5.42 12.71 36.86 4.83 0.00 2.29 16.72 8.21 11.37 41.14
0.69 3.44 1.08 3.23 5.17 4.58 2.10 1.21 21.49 0.30 1.82 3.74 7.01 12.86 34.35 3.92 0.00 4.37 18.41 6.67 7.94 36.94
0.47 1.69 1.31 3.82 6.27 5.57 1.71 1.10 21.95 0.48 1.59 4.93 6.86 13.87 35.86 3.46 0.04 5.43 17.10 6.43 13.66 40.69
0.71 1.12 0.86 3.94 6.02 6.13 1.84 0.79 21.42 0.26 1.51 4.95 6.23 12.96 34.38 4.56 0.00 1.45 20.45 8.29 11.62 44.92
0.53 8.07 0.99 3.38 5.53 4.45 1.71 0.80 25.45 0.49 2.13 4.09 7.87 14.58 40.03 4.48 0.00 5.42 19.28 8.62 15.98 48.36
continued
25 25
Exports
Coal continued
Quantity d Other coal Value Metallurgical coal High quality Other quality Total metallurgical coal Thermal coal Other coal Total coal Coke Metallurgical coal High quality Other quality Thermal coal
Mt
0.76
0.63
0.15
0.25
0.20
0.02
0.00
0.27
$m $m $m $m $m $m $m
21 143 8 650 29 793 13 956 106 43 854 177
21 707 8 993 30 700 17 118 94 47 912 302
6 545 2 291 8 836 4 253 26 13 115 86
6 166 2 470 8 636 4 664 37 13 337 69
4 540 2 069 6 609 3 984 27 10 620 53
4 455 2 164 6 619 4 218 4 10 840 94
4 017 1 825 5 842 4 247 0 10 089 71
3 698 1 700 5 397 4 302 16 9 715 72
Prices
A$/t A$/t A$/t
230.81 177.06 97.37
237.00 177.13 108.04
272.80 202.03 107.21
255.32 194.36 113.36
211.23 160.91 107.86
202.95 156.02 103.64
187.51 140.83 94.55
145.28 116.55 88.94
a Quarterly data derived from annual BREE estimates. b Quarterly data not available. c Country details confidential for various time periods for Brazil, Chinese Taipei, Dem. Peoples Rep. of Korea, Italy, Pakistan and Republic of Koreacommencing from October 1996. d Quantity details for coke not available. e Average export unit value. p Preliminary. s BREE estimate. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; Coal Services Pty Limited; Queensland Government, Department of Mines and Energy.
164
26 26

Copper
Mine s Copper ore and concentrate kt Copper content of all minerals produced kt New South Wales a kt Queensland a kt Western Australia a South Australia kt Tasmania kt Australia a Smelter and refinery Blister copper (primary) b Refined copper (primary) s Quantity Copper concentrate China c India Japan Korea, Rep. of Philippines Other Total Refined copper China c Chinese Taipei Germany Indonesia Japan Korea, Rep. of Malaysia Singapore Thailand Vietnam Other Total Copper content of all primary materials exported ds Value Copper concentrate Refined copper Total LME cash Australia kt kt kt
Production
3 507 158 306 156 305 26 952 459 485
3 405 172 272 147 310 25 926 449 486
902 46 81 32 69 6 235 105 114
904 46 78 38 84 6 253 112 121
775 39 53 36 78 6 212 115 124
823 41 59 40 79 7 226 116 127
879 42 64 56 67 7 236 97 107
893 41 70 59 62 8 240 93 103
Exports
kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt $m $m $m
566 560 303 205 83 33 1 750 121 54 0 24 10 26 74 4 20 28 14 375 877 5 130 3 292 8 422 8 671 8 752
577 584 386 191 9 67 1 814 146 51 0 31 1 2 89 1 44 21 8 395 926 5 386 3 115 8 501 8 196 7 929
172 131 122 34 0 6 466 35 15 0 8 0 0 20 0 5 4 2 89 219 1 480 733 2 212 9 120 8 658
147 163 92 79 9 11 501 52 13 0 6 1 1 20 0 5 3 3 105 255 1 450 801 2 251 7 485 7 407
161 117 55 29 0 19 380 37 11 0 7 0 0 23 1 12 6 1 97 210 1 080 772 1 851 8 300 7 868
98 173 117 49 0 31 467 23 12 0 10 0 1 27 0 22 8 2 104 242 1 376 810 2 186 7 867 7 784
162 134 118 49 4 6 473 26 13 0 8 0 0 22 0 13 4 1 87 223 1 235 655 1 890 7 717 7 425
239 160 149 11 70 24 653 30 9 0 7 0 0 18 0 12 5 1 82 276 1 603 631 2 234 7 909 7 611
Prices
US$/t A$/t
a Includes copper cathode and copper precipitate. b Copper content. c Excludes Hong Kong. d Copper content of all ores and concentrates, slags, residues, intermediate products, refined copper, copper powder and flakes. e Based on LME cash, midday, high grade, 25 tonne warrants. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange.
27 27

Diamonds and other gemstones
Production
Diamonds Northern Territory Western Australia Australia Quantity Diamonds Unsorted s Sorted Gem Industrial a Total s Value Diamonds Unsorted s Sorted Gem Industrial a Total s Opals Rough Cut and polished Total Sapphires Rough Total Other gemstones b Total gemstones Quantity Diamonds Unsorted Sorted Gem Industrial a Dust and powder Value Diamonds Unsorted Sorted Gem Industrial a Dust and powder Total '000 ct '000 ct '000 ct 0 8 027 8 027 0 10 168 10 168 0 2 335 2 335 0 1 953 1 953 0 2 840 2 840 0 3 040 3 040 0 3 040 3 040 0 3 040 3 040
Exports
'000 ct '000 ct '000 ct '000 ct
9 810 90 0 9 900
11 455 71 0 11 526
2 668 16 0 2 684
2 938 24 0 2 961
2 829 11 0 2 840
3 020 20 0 3 040
3 021 19 0 3 040
3 025 15 0 3 040
$m $m $m $m $m $m $m $m $m $m $m
225 141 0 366 6 35 41 1 1 8 49
256 130 0 386 4 36 40 1 1 6 47
61 33 0 94 2 7 9 0 0 1 10
67 39 0 106 1 6 6 0 0 1 8
65 29 0 93 0 13 14 0 0 2 16
64 29 0 93 0 10 10 0 0 2 13
70 38 0 107 1 6 8 1 1 3 12
66 31 0 97 1 5 6 1 1 2 9
Imports
'000 ct '000 ct '000 ct '000 ct
2 282 1 904
1 261 60 316
0 73 47 138
1 63 8 79
0 66 4 36
0 59 0 63
0 66 0 100
0 68 0 4
$m $m $m $m $m
0 394 2 1 397
0 404 2 1 407
0 100 1 0 101
0 106 0 0 107
0 101 0 0 101
0 97 1 0 98
0 108 0 0 108
0 109 0 0 110
a Excludes dust, powder and unsorted diamonds. b Includes cut and polished sapphires from 1 July 2000. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
166
28 28

Gold
Mine s Gold content of all minerals produced New South Wales t Victoria t Queensland t Western Australia t South Australia t Tasmania t Northern Territory t Australia Refinery Primary Australian origin Overseas origin Secondary Australian origin Overseas origin Total Quantity Refined and unrefined bullion Hong Kong, China India Middle East United Arab Emirates Singapore Switzerland Thailand United Kingdom Other Total Value Refined Value Refined and unrefined bullion London AM fix Australia t
Production
30 6 16 182 16 4 11 264
28 4 16 179 13 4 9 253
8 2 4 45 3 1 2 65
7 1 4 45 3 1 2 64
6 1 4 43 3 1 3 61
7 0 4 45 3 1 2 63
7 0 4 44 3 1 3 61
7 2 4 47 3 1 2 65
t t t t t
210 71 4 36 321
204 62 5 51 321
51 15 1 13 81
51 17 1 17 86
51 14 1 11 77
51 15 1 9 77
49 16 1 13 78
53 15 1 7 76
Exports
t t t t t t t t t t $m
14 98 0 0 25 0 56 80 9 301 13 016
3 58 0 0 22 1 32 90 15 304 15 462
2 17 0 0 10 0 16 25 7 78 3 898
0 14 0 0 3 0 8 35 5 81 4 210
1 20 0 0 4 0 5 14 1 62 3 143
1 7 0 0 5 0 4 16 1 83 4 211
1 7 0 0 12 0 3 18 6 69 3 785
1 12 0 0 5 0 5 24 3 68 4 088
Imports Prices
$m
5 426 1 372 1 389
6 814 1 671 1 621
1 822 1 701 1 626
2 043 1 686 1 666
1 507 1 690 1 602
1 442 1 608 1 592
1 564 1 654 1 593
1 223 1 719 1 655
US$/oz A$/oz
p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Bullion Market Association.
29 29
Iron

Iron ore and concentrate a Western Australia South Australia Tasmania s Northern Territory Australia s Iron content s Iron and steel bs Quantity Iron ore and pellets Pellets, sinters and briquettes Fines Lump and run of mine China c Chinese Taipei European Union 27 Japan Korea, Rep. of Other Total iron ore and pellets Iron content Steel Iron and steel s Scrap Value Iron ore and pellets Pellets, sinters and briquettes Fines Lump and run of mine Total Steel Iron and steel s Scrap Total Quantity Iron ore d Iron and steel Ferroalloys Value Iron ore d Iron and steel Ferroalloys Total
Production
433 9 1 2 446 275 7
232 868 840 011 950 873 305
488 10 2 2 503 304 5
679 780 235 000 694 735 387
121 304 2 541 506 600 124 952 75 596 1 753
126 389 2 754 632 450 130 226 78 786 1 214
114 779 2 959 512 450 118 699 71 813 1 212
126 207 2 525 585 500 129 817 78 539 1 208
129 621 2 661 411 500 133 193 80 582 1 208
134 751 2 575 s 496 500 s 138 323 83 685 1 208
Exports
kt kt kt kt kt kt kt kt kt kt kt kt kt
1 634 300 734 104 508 279 355 12 613 986 72 893 41 029 4 406 880 252 473 1 785 1 575
2 227 354 960 112 856 333 885 12 389 791 76 572 46 303 104 470 043 291 374 1 186 2 148
463 89 332 27 519 81 033 3 353 161 20 730 12 038 0 117 314 72 690 458 411
393 91 432 29 449 88 619 2 783 313 18 440 11 065 53 121 273 75 178 206 573
871 81 317 26 246 78 138 2 830 156 16 323 10 936 50 108 433 67 246 263 558
500 92 880 29 643 86 095 3 423 161 21 079 12 265 0 123 022 76 259 258 606
624 95 231 29 432 91 767 2 891 327 18 546 11 386 370 125 287 77 640 260 434
552 103 286 33 206 102 323 3 193 157 19 455 11 836 80 137 044 84 958 260 595
$m $m $m $m $m $m $m
260 41 483 16 647 58 387 1 303 769 2 072
368 45 897 16 431 62 695 983 1 016 2 000
84 13 260 4 648 17 992 344 204 548
75 11 727 4 324 16 126 305 276 581
131 9 466 3 448 13 045 135 247 382
78 11 444 4 010 15 532 199 290 489
72 9 532 3 302 12 906 201 193 394
56 9 741 3 508 13 305 219 232 451
Imports
kt kt kt $m $m $m $m USc/dmtu
5 442 1 867 69 417 2 121 127 2 665 230.18
4 555 1 841 65 223 2 113 106 2 443 na
1 555 445 15 100 544 28 672 248.60
1 314 433 14 62 521 27 610 211.18
841 491 23 29 533 26 588 212.66
844 473 14 31 515 26 572 195.26
1 325 475 15 43 507 29 579 205.72
1 004 469 22 25 463 23 512 174.07
Prices
Japanese negotiated e
a For use in iron and steel making; includes pellets for Tasmania. b Includes recovery from scrap. c Excludes Hong Kong. d Includes limonite ore used in the production of refined nickel products. e Indicative price: Australian hematite fines to Japan (fob), per dry metric tonne unit, for Japanese fiscal year commencing 1 April. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
168
30 30
Lead

Mine s Lead ore and concentrates kt Lead content of all minerals produced New South Wales kt Queensland kt Western Australia kt South Australia kt Tasmania kt Northern Territory kt Australia kt Smelter and refinery Refined lead (primary) a Domestic despatches Refined lead Quantity Lead concentrate China European Union 27 Japan Korea, Rep. of Other Total Lead bullion b United Kingdom Total Refined lead China Chinese Taipei India Indonesia Korea, Rep. of Malaysia South Africa Thailand Vietnam Other Total Lead content of all primary materials exported cs Value Lead concentrate Lead bullion Refined lead Total LME cash d Australia e kt kt
Production
934 77 470 78 7 29 35 697 190 28
1 552 138 796 19 16 67 73 634 303 38
218 20 110 4 2 11 11 157 42 5
892 78 457 10 9 39 42 634 174 22
204 19 105 2 2 8 10 146 39 6
238 20 125 2 3 10 10 171 48 6
240 29 118 4 4 6 11 171 28 6
224 23 114 1 3 8 11 160 45 6
Exports
kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt $m $m $m $m US$/t A$/t
247 53 67 111 17 494 93 93 13 5 35 5 32 64 9 16 20 15 213 676 1 301 248 511 2 059 2 392 2 635
153 53 71 134 27 438 159 159 1 8 32 4 38 77 9 12 17 18 217 703 1 184 541 475 2 200 2 126 2 241
33 0 17 22 0 73 39 39 1 2 8 1 9 34 2 4 3 7 70 168 215 138 169 522 2 458 2 617
54 16 22 43 11 145 29 29 0 1 8 1 12 23 2 3 3 5 58 193 390 109 128 627 1 981 2 214
24 21 11 32 0 88 46 46 0 2 8 0 8 11 3 2 4 3 42 155 238 161 83 482 2 092 2 175
42 15 21 37 16 132 46 46 0 2 8 2 9 9 3 3 7 4 47 187 341 134 95 570 1 974 1 958
40 0 16 32 27 116 22 22 0 3 14 4 12 14 3 4 7 3 63 165 268 59 120 447 1 975 2 070
63 27 22 21 0 133 45 45 1 4 9 1 10 2 3 4 11 5 49 183 303 133 101 538 2 199 2 230
Prices
a Includes lead content of lead alloys from primary sources. b Includes a substantial precious metal content, mainly silver. c Lead content of all ores, concentrates, slags, residues, bullion, and refined lead. d Based on LME cash, midday, standard grade, minimum 25 tonne warrants. e Nyrstar, 99.9799.99 per cent, fob/for Port Pirie. p Preliminary. s BREE estimate. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange.
31 31
Manganese

Manganese ore and concentrate Western Australia s Northern Territory Australia s Manganese content s Quantity Manganese ore and concentrate Value Manganese ore and concentrate Japanese negotiated a
Production
kt kt kt kt
1 786 4 997 6 784 2 756
2 184 5 174 7 357 3 014
568 1 339 1 907 782
544 1 222 1 766 725
524 1 346 1 871 763
547 1 267 1 814 744
546 1 435 1 981 807
540 1 324 1 865 763
Exports
kt $m US$/t A$/t
6 190 1 407 767.97 777.81
6 853 1 229 544.08 527.46
1 787 322 540.00 514.67
1 601 310 540.00 533.72
1 427 228 463.00 438.66
2 038 369 463.00 458.59
1 648 316 513.33 494.31
1 623 294 510.00 491.02
Prices
a Indicative price: high grade ore (48 50 per cent Mn) to Japan for Japanese fiscal year commencing 1 April. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
170
32 32
Nickel
Nickel
Mine Nickel content Western Australia Tasmania Australia Smelter and refinery Intermediate nickel Refined nickel, class 1 b Refined nickel, class 2 c Quantity Nickel d Value Ores and concentrates Intermediate products e Refined nickel, class 1 b Refined nickel, class 2 c Total Value Primary nickel products f
Production
as
kt kt kt kt kt kt
195 0 195 60 90 10
236 0 236 70 107 16
53 0 53 9 26 4
61 0 61 20 23 4
60 0 60 19 29 4
63 0 63 21 28 4
62 0 62 13 32 3
61 0 61 13 27 2
Exports
kt $m $m $m $m $m
210 859 960 2 093 184 4 096
240 1 126 724 2 007 198 4 056
56 145 164 541 58 908
57 331 150 466 44 990
63 275 212 538 53 1 077
64 376 198 463 44 1 081
61 294 166 444 34 939
67 314 125 439 24 903
Imports Prices
$m US$/t A$/t
291 23 963 24 273
281 19 272 18 693
95 22 047 20 946
76 18 306 18 094
68 19 590 18 588
41 17 147 16 962
51 16 317 15 727
38 16 967 16 315
LME cash g
a Details of production of nickel metal, matte, oxide, sinter and nickelcobalt sulphide are not available. b Products with a nickel content of 99 per cent or more. Includes electrolytic nickel, pellets, briquettes and powder. c Products with a nickel content of less than 99.8 per cent. Includes ferronickel, nickel oxides and oxide sinter. d Includes metal content of ores and concentrates, intermediate products and nickel metal. e Includes matte and speiss for further refining. f Includes matte, sinter and intermediate products; ferronickel, unwrought nickel metal and alloys and scrap. Also includes value of limonite ore used in the production of refined nickel products. g Average cash settlement price for melting grade refined nickel. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange.
33 33

Petroleum
Field Crude oil d Condensate d Total d Production rate d LPG Methane Ethane Coal seam gas Refinery Refinery input Refinery output LPG Automotive gasoline Aviation gasoline Aviation turbine fuel Kerosine Heating oil Automotive diesel oil Industrial and marine diesel fuel Fuel oil (excl. refinery fuel) Lubricating oil basestock Bitumen Other products Total Sales LPG Automotive use b Total Automotive gasoline Premium unleaded Regular unleaded Other unleaded Total Aviation gasoline Aviation turbine fuel Kerosine Heating oil Automotive diesel oil Industrial and marine diesel fuel Fuel oil Lubricating oil and greases Bitumen Other products Total
Production
ML ML ML '000 bbl/day ML Mm3 Mm3 Mm3 ML ML ML ML ML ML ML ML ML ML ML ML ML ML
16 115 8 630 24 745 428 3 907 46 851 295 5 957 39 871 1 467 16 643 91 5 448 0 16 12 858 0 952 64 476 377 38 393
14 643 7 749 22 393 389 3 815 43 725 376 6 355 38 720 1 198 15 638 90 5 450 0 12 11 085 1 227 954 5 426 341 36 081
3 691 2 058 5 749 397 1 033 11 562 103 1 529 9 862 304 4 098 24 1 414 0 3 3 084 0 223 2 109 63 9 318
3 949 2 005 5 954 412 956 10 676 96 1 526 9 479 292 3 824 26 1 362 0 6 3 242 0 228 2 132 84 9 193
3 339 1 851 5 190 359 908 9 911 75 1 636 9 906 334 3 812 25 1 426 0 2 2 048 1 227 247 0 100 77 9 298
3 664 1 835 5 499 389 918 11 577 103 1 665 9 526 269 3 905 15 1 248 0 1 2 712 0 257 0 85 117 8 609
3 710 2 208 5 918 409 1 025 14 079 114 1 801 9 636 336 4 126 33 1 480 1 4 3 316 288 207 0 73 93 9 956
5 326 2 208 7 534 367 824 13 103 107 1 801 9 916 294 3 876 17 1 415 1 3 3 307 54 272 0 82 135 9 456
ML ML ML ML ML ML ML ML ML ML ML ML ML ML ML ML ML
2 022 3 936 2 247 11 388 5 090 18 725 79 7 068 27 5 20 054 7 757 430 719 289 52 095
1 908 3 652 2 449 11 313 5 000 18 762 84 7 348 13 4 21 630 0 942 348 730 283 53 797
504 989 589 2 810 1 262 4 662 21 1 845 4 0 5 397 0 223 88 148 66 13 443
485 890 628 2 890 1 264 4 781 21 1 852 3 0 5 511 0 245 87 204 66 13 663
468 866 630 2 837 1 244 4 711 20 1 824 3 2 5 167 0 276 84 194 79 13 226
451 907 602 2 776 1 230 4 608 22 1 827 3 1 5 554 0 198 89 184 72 13 466
463 986 622 2 816 1 275 4 714 21 1 928 2 1 5 572 0 147 91 152 62 13 677
466 904 644 2 780 1 301 4 725 20 1 962 6 2 5 872 0 181 85 224 62 14 043
continued
172
33 33
Exports
Petroleum continued
Quantity Crude oil and other refinery feedstock China ML Chinese Taipei ML Japan ML Korea, Rep. of ML New Zealand ML Singapore ML United States ML Other ML Total LNG s LPG Refinery products Automotive gasoline Aviation turbine fuel Diesel fuel c Fuel oil Aviation gasoline Lubricants Other products Total Ships' and aircraft stores Aviation turbine fuel Fuel oil Other products Total Value Crude oil and other refinery feedstock LNG LPG Refinery products Automotive gasoline Aviation turbine fuel Diesel fuel c Fuel oil Aviation gasoline Lubricants Other products Total Total Ships' and aircraft stores Aviation turbine fuel Fuel oil Other products Total ML Mt ML ML ML ML ML ML ML ML ML ML ML ML ML
3 632 266 2 002 3 794 56 2 649 189 7 050 19 638 19.96 2 471 175 12 117 194 20 223 19 760 1 985 259 37 2 281
4 397 410 1 817 1 807 126 3 702 451 6 502 19 212 19.25 2 115 175 7 130 485 30 304 21 1 151 1 985 269 34 2 288
1 206 15 243 392 1 713 101 1 894 4 565 4.59 602 117 1 42 60 6 76 2 304 496 65 18 579
1 158 16 540 606 1 1 230 263 1 041 4 856 4.77 465 0 1 6 40 11 34 5 97 496 65 7 568
949 266 533 511 3 629 0 1 840 4 732 4.56 516 21 4 73 90 6 88 1 283 496 68 4 568
1 084 113 501 298 121 1 130 86 1 727 5 060 5.33 532 37 1 8 295 7 106 13 468 496 72 6 574
609 297 418 741 102 1 681 96 1 705 5 650 6.05 693 44 3 40 154 7 98 12 356 496 67 6 570
837 202 501 614 127 1 018 170 1 904 5 373 5.72 538 10 4 16 23 10 124 7 194 496 69 6 571
$m $m $m $m $m $m $m $m $m $m $m $m $m $m $m $m
12 245 10 437 1 068 120 8 94 99 22 154 29 526 23 652 1 313 157 38 1 508
13 205 11 949 971 127 6 115 314 30 261 36 890 25 752 1 368 187 34 1 589
3 111 2 951 265 84 0 39 35 6 59 1 225 6 551 337 42 19 398
3 319 3 036 195 0 0 7 25 12 36 11 92 6 643 341 44 8 393
3 311 2 818 268 15 3 62 58 6 75 6 226 6 047 344 48 3 395
3 464 3 144 244 27 2 7 196 7 91 18 347 6 510 346 54 4 403
3 714 4 061 284 34 1 30 80 6 79 16 245 7 729 342 47 8 397
3 574 3 444 280 7 2 13 11 8 87 11 138 6 938 342 47 8 397

continued
33 33
Imports
Petroleum continued
Quantity Crude oil and other refinery feedstock Indonesia ML Malaysia ML Middle East Saudi Arabia ML United Arab Emirates ML Other ML Total Middle East ML New Zealand ML Papua New Guinea ML Singapore ML Vietnam ML Other ML Total ML Natural gas Refined products LPG Automotive gasoline Aviation turbine fuel Diesel fuel c Fuel oil Lubricants Other products Total Value Crude oil and other refinery feedstock Natural gas Refined products LPG Automotive gasoline Aviation turbine fuel Diesel fuel c Fuel oil Lubricants Other products Total Total Dubai West Texas intermediate Brent kt ML ML ML ML ML ML ML ML
4 805 5 929 156 4 683 0 4 880 2 565 1 612 497 2 554 9 383 32 225 4 799 888 944 086 820 559 463 2 002 18 762 2 2 8 1
3 310 4 942 216 4 599 0 4 879 2 195 1 475 554 1 788 10 352 29 495 4 273 023 672 252 225 623 528 1 872 22 194 1 3 2 11 1
662 866 0 1 260 0 1 260 578 305 104 831 2 577 7 184 1 226 411 775 642 2 704 361 132 619 5 646
959 1 335 0 1 566 0 1 566 498 399 96 356 2 058 7 269 1 089 168 1 176 646 2 920 451 141 677 6 180
736 1 602 216 863 0 1 079 572 408 171 262 3 003 7 832 1 144 158 886 468 2 702 455 128 283 5 081
952 1 138 0 910 0 973 547 364 182 339 2 714 7 210 814 285 834 496 2 898 355 126 293 5 288
1 174 1 572 0 1 138 0 1 138 543 273 191 731 2 931 8 553 1 108 196 642 685 2 871 382 147 229 5 153
886 1 323 0 809 0 809 500 513 164 708 2 674 7 577 1 221 257 997 830 3 211 527 119 292 6 233
$m $m $m $m $m $m $m $m $m $m $m US$/bbl US$/bbl US$/bbl
20 183 1 929 376 1 838 1 440 6 237 836 671 1 976 11 445 33 557 75.07 89.29 96.00
21 125 2 151 452 915 742 830 061 826 3 045 16 720 2 1 8 1 39 997 109.17 94.27 110.71
4 963 594 167 599 482 2 053 217 212 801 3 936 9 494 107.19 89.59 111.98
5 173 561 65 905 503 2 307 297 228 791 4 535 10 269 104.64 94.10 107.40
5 641 595 78 717 368 2 168 312 191 824 4 063 10 300 116.37 102.90 118.29
5 348 401 142 694 388 2 302 235 195 630 4 186 9 935 104.36 90.29 104.85
5 640 580 83 494 516 2 197 235 214 756 3 915 10 134 106.00 92.20 109.37
5 209 604 136 771 646 2 522 322 172 816 4 781 10 594 107.35 86.64 108.44
Prices
a Commercial sales plus field and plant usage. b This is a minimum level and includes only direct sales by the oil industry. The data do not include volumes sold to distributors etc. that are subsequently used or sold for automotive use. c Includes automotive diesel oil and industrial and marine diesel fuel. d Energy Quest. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; Department of Resources, Energy and Tourism, Canberra; Energy Quest; US Department of Energy, Energy Information Administration.
174
35 34
Sales of petroleum products, by state marketing area

NSW a ML Vic. ML Qld ML WA ML SA ML Tas. ML NT ML Aust. ML
Sales of petroleum products, by state marketing area
December quarter 2012 p LPG b Automotive use c Total Automotive gasoline Premium unleaded Regular unleaded Other unleaded d Total of which sales to retailers Aviation gasoline Aviation turbine fuel Kerosine Heating oil Automotive diesel oil of which sales to retailers Industrial and marine diesel fuel Fuel oil e Lubricating oil and greases Bitumen Other products f Total
131 245 311 450 825 1 586 1 370 3 864 0 0 1 193 498 0 43 20 53 48 4 055
197 323 116 864 156 1 137 1 035 3 323 0 0 913 392 0 66 14 49 6 2 836
40 145 114 715 225 1 054 825 5 390 5 1 1 803 416 0 50 25 89 3 3 570
41 77 62 381 55 498 446 5 254 0 0 1 349 256 0 18 17 17 2 2 237
52 90 22 267 35 324 245 2 74 0 0 395 90 0 0 7 13 2 906
3 16 13 81 5 99 48 0 6 0 1 91 10 0 2 1 4 0 220
2 7 5 21 0 26 16 2 52 0 0 128 12 0 1 1 0 1 219
466 904 644 2 780 1 301 4 725 3 984 20 1 962 6 2 5 872 1 675 0 181 85 224 62 14 043
36 35
Imports

Phosphate
Quantity Phosphate rock China Morocco Nauru Togo Other Total Phosphates Diammonium a Monammonium b High analysis c Value Phosphate rock Phosphates Diammonium a Monammonium b High analysis c Australia d
kt kt kt kt kt kt kt kt kt $m $m $m $m A$/t
0 288 74 0 46 408 185 753 297 57 109 437 81 133.13
1 183 72 0 63 319 142 704 91 55 75 393 34 161.20
0 55 0 0 25 80 3 5 5 15 2 4 2 187.40
1 98 42 0 28 169 13 128 26 29 9 84 12 172.05
0 0 0 0 10 10 68 365 41 1 35 203 14 121.38
0 31 30 0 0 61 58 205 18 10 29 103 7 163.97
0 64 30 0 83 177 0 3 0 29 0 3 0 162.61
0 53 0 0 0 53 50 76 31 9 25 42 11 176.84
Prices
a P2O5 equivalent: 46 per cent. b P2O5 equivalent: 50 per cent. c P2O5 equivalent: 48 per cent. d Average import unit value. p Preliminary. na Not available. Sources: Australian Bureau of Statistics, Canberra; Queensland Government, Department of Mines and Energy; Government of South Australia, Primary Industries and Resources South Australia.
176
37 36

quarter 201011 201112 Sep 201112 Dec 2 957 Mar 2 544 Jun 2 844 201213 Sep 2 690 Dec p 2 743
Salt
Production
Australia a
kt
11 562
11 413
3 067
Exports s
Quantity Bulk, bagged and table Value Bulk, bagged and table Australia b kt $m A$/t 11 162 251 22.50 10 884 245 22.48 2 793 63 22.49 2 802 63 22.50 2 523 57 22.49 2 766 62 22.44 2 571 58 22.48 2 652 60 22.48
Prices
a Excludes Victoria. b Average export unit value. p Preliminary. s BREE estimate. Sources: BREE; ABARES.
38 Silver 37
Production

Mine s Silver content of all minerals produced New South Wales t Queensland t Western Australia t South Australia t Tasmania t Northern Territory t Australia Refinery Refined silver Quantity Refined silver bullion Value Refined silver a Value Refined silver bullion World b Australia c t t
73 1 483 51 34 110 42 1 792 712
81 1 471 65 21 171 53 1 862 847
17 321 22 7 48 14 428 250
18 384 15 7 43 13 481 247
23 338 13 6 34 13 426 168
23 428 16 1 46 13 528 181
19 338 17 1 16 14 405 161
27 290 8 8 20 16 369 271
Exports
t $m
198 164
269 268
41 48
44 42
56 57
127 121
65 60
11 19
Imports Prices
$m USc/oz A$/kg
490 2 880 920
950 3 309 1 012
572 3 898 1 128
187 3 188 971
93 3 213 1 039
98 2 940 910
104 2 982 960
119 3 261 991
a Includes refined bullion, powder, unwrought silver and semi-manufactured forms. b London Bullion Market Association, fixed rate. c Nyrstar, fob/fot Port Pirie. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Bullion Market Association.
39 38

Tin
Production
Mine Tin content of all minerals produced t Western Australia s Tasmania t Australia s t 12 000 6 410 18 410 3 150 6 052 8 150 1 500 1 600 3 100 1 500 1 600 3 100 70 1 426 1 496 80 1 426 1 506 80 1 426 1 506 80 1 426 1 506
Exports
Quantity Tin concentrate Refined tin Tin content of primary materials exported as Value Tin concentrate Refined tin Total Quantity Refined tin Value Refined tin LME b t t t $m $m $m 12 835 0 5 426 126 0 126 12 285 0 4 895 102 0 102 2 538 0 1 234 29 0 29 3 478 0 1 240 25 0 25 1 859 0 922 18 0 18 4 410 0 1 499 29 0 29 3 033 0 1 514 27 0 27 4 097 0 1 763 35 0 35
Imports
t $m US$/t
673 18 23 960
593 13 20 011
187 5 23 200
127 3 22 100
190 4 17 339
89 2 17 404
115 2 17 470
112 2 17 535
Prices
a Tin content of tin ores and concentrates and refined tin. b LME official close. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange.
178
40 39

Titanium minerals
Ilmenite concentrate New South Wales Queensland Victoria South Australia Western Australia Northern Territory Australia Leucoxene concentrate New South Wales Victoria South Australia Western Australia Northern Territory Australia Rutile concentrate New South Wales Victoria Queensland South Australia Western Australia Australia Synthetic rutile Titanium dioxide pigment Quantity Ilmenite concentrate a Leucoxene concentrate Rutile concentrate s Synthetic rutile s Titanium dioxide pigment Value Ilmenite concentrate a Leucoxene concentrate Rutile concentrate s Synthetic rutile s Titanium dioxide pigment Ilmenite concentrate Bulk s Rutile concentrate Bagged Titanium dioxide pigment
Production
kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt
90 186 87 173 739 0 1 275 134 10 0 56 0 200 80 235 75 27 50 467 542 204
90 186 100 156 799 0 1 331 162 10 0 56 0 228 80 194 74 68 38 454 480 204
23 47 26 46 185 0 326 41 3 0 14 0 57 20 60 19 19 10 127 118 51
23 47 22 43 195 0 329 41 3 0 14 0 57 20 50 19 16 10 114 123 51
23 47 37 46 203 0 354 41 3 0 14 0 57 20 34 18 17 10 98 105 51
23 47 16 21 216 0 322 41 3 0 14 0 57 20 51 18 17 10 115 135 51
23 47 25 39 200 0 333 41 3 0 14 0 57 20 46 18 16 13 113 120 51
23 47 25 37 204 0 335 41 3 0 14 0 57 20 42 18 16 18 113 120 51
Exports
kt kt kt kt kt $m $m $m $m $m
1 804 27 491 517 195 198 17 390 315 527
2 045 31 334 536 179 225 22 252 294 571
518 8 85 136 51 57 5 64 78 164
527 8 82 136 41 58 5 52 73 127
492 8 81 141 51 54 6 73 76 153
508 8 86 123 37 56 6 64 67 127
512 8 86 126 27 56 6 63 69 81
511 8 89 121 33 56 6 63 65 91
Prices
A$/t A$/t A$/t
110 1 2 708
110 2 3 191
110 685 3 217
110 638 3 134
110 643 3 032
110 648 3 437
110 653 3 020
110 646 2 757
a From January 1992, bulk only. b Average export unit value. p Preliminary. s BREE estimate. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
41 40
Uranium

Mine Uranium oxide (U3O8) Uranium (U content) South Australia Northern Territory Australia
Production
t t t t
7 069 3 724 2 270 5 995
7 657 3 708 2 785 6 493
2 123 944 856 1 800
2 054 868 873 1 742
1 633 866 519 1 385
1 847 1 030 536 1 566
2 381 968 1 051 2 019
2 356 957 1 040 1 998
Exports
as
Quantity Uranium oxide (U3O8) s Value Uranium oxide (U3O8) s Uranium oxide (U3O8) Industry spot b Australia cs
t $m
6 950 610
6 917 607
1 729 152
1 729 152
1 729 152
1 729 152
2 481 202
2 456 199
Prices
US$/lb A$/kg
57.13 87.71
51.50 87.75
51.00 87.75
51.83 87.75
51.67 87.75
51.50 87.75
48.17 81.44
42.79 80.95
a ABS confidentiality: no country details to July 2009 and no details from August 2009. b Average of weekly restricted spot price, published by The Ux Consulting Company. c Average export unit value. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; Department of Resources, Energy and Tourism; The Ux Consulting Company.
180
43 41
Zinc
Mine s kt Zinc ore and concentrates Zinc content of all minerals produced kt New South Wales kt Queensland kt Western Australia kt South Australia kt Tasmania kt Northern Territory Australia Smelter and refinery Refined zinc (primary) Domestic despatches Refined zinc Quantity Zinc concentrates BelgiumLuxembourg China Germany India Japan Korea, Rep. of Netherlands Spain Thailand Other Total Refined zinc China Chinese Taipei Hong Kong, China India Indonesia Korea, Rep. of Malaysia New Zealand Saudi Arabia United States Other Total Zinc content of all primary materials exported as Value Zinc concentrates Refined zinc Total LME cash b Australia c kt kt kt
Production
2 947 102 1 009 79 17 92 181 1 479 499 65
3 360 121 1 031 89 22 107 199 1 567 505 60
879 29 255 34 5 26 52 401 126 15
847 32 262 19 5 27 49 394 133 17
788 28 253 15 6 23 48 373 117 14
846 31 261 21 7 29 50 400 128 14
795 46 212 30 7 16 48 359 124 17
855 37 281 10 7 20 53 409 129 s 15
Exports
kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt kt $m $m $m US$/t A$/t
51 973 84 44 249 316 293 234 64 9 2 317 73 84 61 6 22 8 29 11 6 73 38 410 1 494 1 479 893 2 373 2 241 2 458
48 938 115 51 276 445 273 197 40 0 2 382 123 70 46 5 13 0 27 9 6 133 24 456 1 572 1 375 917 2 292 2 020 2 088
13 269 19 9 77 101 50 57 0 0 594 25 17 18 1 4 0 7 2 0 20 5 100 372 350 217 567 2 224 2 327
11 359 11 9 83 99 54 0 21 0 647 44 22 16 1 4 0 6 3 1 20 6 122 423 381 245 625 1 896 2 025
13 145 36 11 57 117 98 56 10 0 542 26 16 6 1 3 0 7 2 1 48 5 115 374 302 218 520 2 022 2 085
11 165 49 22 59 128 71 84 9 0 598 28 16 7 2 3 0 7 2 3 45 8 119 403 342 236 578 1 931 1 916
13 180 0 25 70 98 75 57 18 35 571 49 12 16 1 4 2 4 3 3 20 8 121 379 302 217 519 1 885 1 914
13 255 30 10 105 114 98 34 11 0 670 37 9 11 2 4 0 3 2 1 23 7 100 422 364 184 548 1 949 1 966
Prices
a Zinc content of all ores, concentrates, slags, residues, intermediate products, refined zinc, zinc powders, flakes and dust. b LME cash, midday, registered brands, minimum 98 per cent, 25 tonne warrants. c Nyrstar SH Grade, 98.5 per cent. p Preliminary. s BREE estimate. na Not available. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra; London Metal Exchange.
42 42
Zircon
Zircon
Production
Zircon concentrate New South Wales Victoria Queensland South Australia Western Australia Northern Territory Australia
70 197 40 249 118 0 674
86 188 60 273 99 0 706
21 58 15 93 24 0 211
21 59 15 69 27 0 191
22 35 15 67 24 0 164
22 37 15 43 24 0 141
22 34 15 0 79 0 150
22 34 15 0 79 0 150
Exports
Quantity Zircon concentrate Value Zircon concentrate
kt $m
963 532
846 327
237 117
219 87
196 60
195 63
196 59
193 57
Prices
Zircon concentrate All grades bagged
A$/t
1 322
2 325
2 162
2 488
2 272
2 420
2 392
1 603
a Average export unit value. p Preliminary. s BREE estimate. Sources: BREE; ABARES; Australian Bureau of Statistics, Canberra.
182
BREE contacts
Executive Director / Chief Economist BREE Quentin Grafton Deputy Chief Economist/Research Director Roger Rose Resources Program Leader John Barber john.barber@bree.gov.au (02) 6243 7988 roger.rose@bree.gov.au (02) 6243 7583 quentin.grafton@bree.gov.au (02) 6276 1000
Modelling & Policy Integration Program Leader Arif Syed arif.syed@bree.gov.au (02) 6243 7504
Energy & Quantitative Analysis Program Leader Data & Statistics Program Leader Geoff Armitage geoff.armitage@bree.gov.au (02) 6243 7510 Nhu Che nhu.che@bree.gov.au (02) 6243 7539
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Resources and Energy Quarterly

March Quarter 2013

Resources and Energy Quarterly

Resources and Energy Quarterly

March 2013 iii

Statistical tables BREE Contacts

iv Resources and Energy Quarterly

Macroeconomic outlook and resources and energy overview

Global economy: increased confidence but risks remain

Resources and Energy Quarterly

2 Resources and Energy Quarterly

World economic growth

Sources: BREE; IMF.

Resources and Energy Quarterly

Table 1: Key macroeconomic assumptions for resources and energy

4 Resources and Energy Quarterly

Economic prospects in Australias major mining export markets

Resources and Energy Quarterly

Sources: BREE, IMF.

Box 1: Fiscal Cliff and US Sequestration

6 Resources and Energy Quarterly

Resources and Energy Quarterly

Sources: BREE; LME.

8 Resources and Energy Quarterly

Figure 4: Bulk commodity prices

2014 iron ore

Demand for resources and energy commodities

Resources and Energy Quarterly

Supply for resources and energy commodities

Australias economic prospects

10 Resources and Energy Quarterly

Australias key macroeconomic assumptions for resources and energy

Sources: BREE; RBA.

Resources and Energy Quarterly

The Australian mining industry

share of GDP (right axis)

12 Resources and Energy Quarterly

Figure 7: Investment in private new capital expenditure

private new capital expenditure

share of total industries (right axis)

oil and gas extraction

other mining (including services)

Resources and Energy Quarterly

Australian resources and energy commodities production and exports

14 Resources and Energy Quarterly

Figure 10: Australian energy and minerals export earnings

Sources: BREE; ABS.

Resources and Energy Quarterly

Australias resources and energy commodity exports, by selected commodities

z BREE projection. Sources: BREE; Australian Bureau of Statistics.

Medium term outlook for Australias resources and energy commodities

Resources and energy sector

16 Resources and Energy Quarterly

Major Australian commodity exports

LNG Crude oil

Bunker fuel Manganese ore LPG

Resources and Energy Quarterly

18 Resources and Energy Quarterly

Figure 1: Weekly WTI oil price

Sources: BREE; EIA.

Sources: BREE; EIA; IEA.

Resources and Energy Quarterly