AUSTRALIA could be shipping twice as much of its most lucrative commodities by 2025 if the nation takes ”critical” steps to contain costs and build new infrastructure, a government report says.
The Bureau of Resources and Energy Economics yesterday forecast that the volumes of iron ore and coal exports would near double by 2025 in response to strong Asian demand.
Under the agency’s most bullish projections, iron ore shipments would reach a staggering 1.08 billion tonnes a year, up from 493 million tonnes today.
Annual exports of coking coal, the other key commodity used to make steel, could jump as high as 306 million tonnes in 2025, up from 157 million tonnes today.
But for the economy to get the most out of the commodities boom, BREE said the country needed to upgrade port and rail infrastructure to prevent bottlenecks forming.
It was especially important for government and business to work on infrastructure planning now that commodity prices had probably peaked, Resources Minister Martin Ferguson said.
”No one owes Australia a living,” Mr Ferguson said in Canberra.
”Australia has infrastructure in place or under construction to support exports until 2017, but beyond 2017 much more infrastructure will be required, much of which is still being planned.”
Aside from infrastructure constraints, Mr Ferguson said another potential threat to planned investment was the high cost of labour in Australia.
Mr Ferguson, a former unionist, took aim at a ”worrying” trend of resources-related unions demanding excessive pay rises for their members.
”If we’re not very careful current members will do well … but future members in 10 or 15 years’ time will miss out,” Mr Ferguson said.
BREE’s projections for high long-term growth come amid recent falls in commodity prices sparked by a weakening outlook for the world economy.
The Reserve Bank yesterday said commodity prices slipped 1.7 per cent in June, taking their annualised fall to 9.9 per cent. Lower coal and iron ore prices were the main reason for the slump.
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