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Resource sector on winning streak

Finbar O'MallonAAP
Australia is expected to record a series of record years for resource and energy exports.
Camera IconAustralia is expected to record a series of record years for resource and energy exports. Credit: AAP

The nation's energy and resources sector is looking at back-to-back record years, helping to fuel a budget recovery after the financial fallout from COVID-19.

The latest Resources and Energy Quarterly, issued by the federal government, show 2021/22 was a record year for export earnings for the sector.

Earnings during the financial year were estimated at $405 billion and that is likely to be followed by another record year in 2022/23 with earnings of $415 billion.

While the following year is expected to be lower, it's still likely to be the third highest with $338 billion in export earnings forecast for 2023/24.

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"The outlook for Australia's mineral exports remains strong, as the world economy rebounds from the impact of the COVID-19 pandemic and energy shortages persist," the report released on Monday says.

"High prices, good volume growth and a weak Australian dollar are driving a surge in export earnings."

Australia's resources earnings bonanza has been pinned on a surge in energy and metal prices as the global post-pandemic recovery gathers steam.

Sanctions on Russia over its illegal invasion of Ukraine meant many importers have had to look elsewhere for commodities.

High prices have in turn fed improvements in the federal budget's bottom line, delivering an unexpected windfall that has helped trim the deficit.

However, the report also highlights that bumper prices are unlikely to last in the medium-term - and could speed up the move towards renewable sources of energy.

It also noted the emergence and spread of a new strain of the COVID-19 virus could dampen the outlook, particularly if there was an outbreak in China.

The report also warns factors like a continuation of Australia's wet weather would impact coal mining.

China represents the largest market for Australian resource and energy exports, making up 42 per cent of all exports in 2020/21. The next highest share was Japan at 11 per cent.

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