* Resource export volumes seen little changed, revenue hit
* 2012/13 iron ore revenue forecast down 20 pct vs June
* Met coal volume seen up 13 pct in 12/13 vs 11/12, value
down 13 pct
* Downgrades come as prices tumble on weakening China demand
* Rio Tinto upbeat on Chinese outlook
By James Grubel
CANBERRA, Sept 18 Australia, the world's biggest
exporter of iron ore, cut its revenue forecasts for the key
steel making ingredient by a fifth on Tuesday, a fresh sign the
country's mining industry is losing steam as a slowdown in top
customer China drives down prices.
Resources exports shielded Australia from recession during
the global financial crisis, thanks to on-going strong demand
from China in particular as its population becomes wealthier and
But slowing Chinese growth and falling prices have led to
concerns for Australia's economy and prompted warnings that the
mining industry's ongoing expansion cannot be taken for granted.
The Bureau of Resources and Energy Economics (BREE) forecast
revenue from iron ore, Australia's largest single export, of
A$53.2 billion ($55.9 billion) in this fiscal year, down from a
June forecast of A$67 billion and around A$63 billion last year.
"Although this is not good news, it is by no means a death
knell for the Australian resources industry," Resources Minister
Martin Ferguson told a mining and energy conference in Canberra.
"It is useful to remember that the commodity prices
experienced since last year were record-breakers. And although
it's difficult to say when or if we might scale to those
exceptional heights once more, BREE expects a rebound in some
commodity prices in 2013, should global growth pick up as is
expected by the International Monetary Fund."
Analysts said the quarterly forecasts tended to be behind
the curve but did not a see significant risk of further major
falls in demand for Australian resources.
"The prices have certainly come down, so customers are
asking for lower prices, but I think they still see (Australia)
as a secure place to get supply," said Mark Pervan, the head of
commodities research for ANZ in Melbourne.
END OF BOOM?
Australia has been counting on a healthy $270 billion
committed pipeline of resource and energy projects to prolong
its remarkable run of 21 years without a recession.
But with prices for iron ore, coal and other resources under
pressure, a further $200-odd billion of projects proposed but
not committed is looking increasingly unlikely.
Despite the revenue downgrade, miner Rio Tinto Ltd
said it remained confident of demand in the long term,
particularly from China, thanks to a new economic stimulus.
"We think that we'll start to see some rebound in demand
over coming months and into next year," Rio Tinto Australia
managing director David Peever told reporters.
"But the short term is very, very difficult."
Ferguson last month warned Australia's resources boom was
over after BHP Billiton shelved plans for an expansion
of its Olympic Dam copper and uranium mine, although he later
rowed back on the comments to say commodity prices had peaked.
The world's no.4 iron ore producer, Fortescue Metals Group
, has also scaled back on expansion plans, while some
high cost mines have begun closing and more may follow.
A "significant portion" of Australian coal miners were
losing money at current prices, Xstrata said last week
as it announced it was cutting production and hundreds of jobs.
Prolonged low prices for iron ore and coal could also hurt
Australia's economy and undermine the government's hopes of
returning its budget to a surplus by June 30, 2013, with lower
resources earnings to impact on profits and tax revenue.
Australia's central bank noted in the minutes from its last
policy meeting that a sustained fall in export prices could hurt
the terms of trade more than expected, but said it had scope to
cut rates to respond to any major threat to
LNG A BRIGHT SPOT
BREE forecast Australia's total resources and energy exports
would dip 2 percent from record levels in 2011/12 to about A$190
billion, compared to its previous forecast of A$209 billion.
It sees iron ore exports in the year to June 30, 2013, of
509 million tonnes, little changed on its June forecast of 510
million tonnes and up 8 percent on the previous year.
The government bureau said it expected contract prices for
iron ore to be $126 per tonne through 2012 and $101 in 2013.
The price of iron ore traded as high as $180
a tonne a year ago, but plummeted to a 3-year low of $86 earlier
this month as demand in China fell before scrambling above $100.
BREE said metallurgical coal exports were set to ease
slightly to 160 million tonnes, but revenues could fall 15
percent to A$26 billion due to softer prices.
One bright spot was the forecasts for LNG exports, which are
expected to rise 20 percent from 2011/12 levels in volume and
more than 35 percent in value, driven by Asian demand.