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The ongoing energy crisis has pushed coal prices to record highs, as Australia’s resource exports are set to hit a record $459 billion this FY.

The ongoing energy crisis has pushed coal prices to historical highs, with Australia’s resource exports set to hit a record $459 billion this financial year.

The revised export number, up from the $450 tipped earlier this year, was included in the Federal Government’s Resources and Energy Quarterly: December 2022.

Much of the growth in Australian resources has been driven by a global energy crisis and geopolitical instability as a result of Russia’s invasion of Ukraine and the resulting sanctions.

“Many Western nations are having to pay substantially more for energy, on the high chance that sanctions on Russia will see some Russian production – particularly gas and coal – become stranded from world markets,” the report from the Department of Industry, Science and Resources stated.

With prices having been pushed to “historically high” levels, Australia’s combined coal exports, which includes metallurgical coal and thermal coal, are now forecast to earn $132 billion in 2022–23.

Such high prices and increased demand have also pushed coal to become Australia’s most valuable export, taking the top spot long held by iron ore.

Earnings from iron ore have been revised down for the financial year, with demand for the key steelmaking ingredient taking a major hit amid a slowing housing market in China, by far Australia’s biggest iron ore customer.

“Lower prices over the outlook period are expected to see Australia’s iron ore export earnings ease from $133 billion in 2021–22 to $113 billion in 2022–23, and then to $95 billion in 2023–24,” the report stated.

News of the increased earnings for coal exports comes soon after the Federal Government placed a temporary cap on coal and gas prices as part of its efforts to curb runaway energy prices.

The price of coal has exceeded $US400 per tonne in 2022. It currently sits at around $US240 ($358.60) per tonne.

It should be noted, however, that despite high prices and major company windfalls, the longer-term outlook for coal remains uncertain as the world increasingly looks to renewables as a source of power generation.

“Thermal coal remains subject to challenges with finance, insurance and long-term global demand, all of which have made supply side responses slow and difficult to manage,” the Government report stated.

“These factors will likely become more forceful over time, putting the sector into a permanent higher-price phase.”