In China, the top consumer of Australian iron ore by far, the tariffs come at a difficult time: steel production levels are already weakening amid a protracted downturn in the nation’s property sector, reducing the profits of ASX-listed mining giants BHP and Rio Tinto.
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Australia’s top LNG shippers, including Woodside Energy and Santos, meanwhile, are facing the risk of slumping prices from 2027 when massive new LNG projects begin production in the US and Qatar.
As Australia is a major trading nation, steeper than expected falls in the prices of both commodities will leave a significant dent in state and federal government coffers, which rely heavily on mining and gas royalties.
Overall, total export earnings from Australia’s energy and mining sectors are expected to fall by $33 billion – from $385 billion to $352 billion – by 2026-27, the department says.
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One bright spot for the nation’s export revenue, however, is the surging price of gold, which reached a record high in the June quarter of more than $US3400 ($5200) an ounce.
The price of the yellow metal, widely seen as a safe haven commodity where investors store wealth during times of political and economic uncertainty, has been rallying this year on the back of the US-China tariff war, worries about the US fiscal outlook and conflicts in the Middle East and Ukraine.
With prices tipped to remain above $US3000 an ounce, gold is set to overtake metallurgical coal as Australia’s third-biggest export earner behind LNG and iron ore next year.
Resources Minister Madeleine King said exports of gold, as well as copper and lithium – two key metals needed in batteries and electrical wiring to power the global shift to cleaner energy – were “partially offsetting” the impact of lower iron ore and LNG prices.
Despite falling revenue, export volumes were on track to edge higher over the next two years, which would support jobs and the Australian economy, King said.
“Australia remains a trusted and reliable supplier of resources and energy to the world at a time of ongoing global uncertainty,” she said.
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