LAUNCESTON, Australia, Sept 30 (Reuters) – Is Australia the ultimate commodity hedge? When looking at the country’s natural resources the focus tends to be as its status as the world’s biggest exporter of iron ore and liquefied natural gas (LNG), and its competition with Indonesia as the top shipper of coal.
But this ignores that Australia is also the world’s second-largest gold producer after China, giving its export earnings from resources a hedge should growth commodities start to suffer as a result of a slowing global economy.
In effect, Australia is the also world’s largest gold exporter, given China is still a significant net gold importer. The importance of gold to Australia was underlined in the latest Resources and Energy Quarterly, released on Monday by the Department of Industry, Innovation and Science.
The report forecast earnings from gold exports to rise to A$25 billion ($16.9 billion) in the fiscal year that started on July 1, up 32% from A$19 billion in the year that ended on June 30.
That A$6 billion increase is an exact match to the decrease expected in earnings from exports of thermal coal used in power plants, with the value forecast to drop to A$20 billion in 2019/20 from A$26 billion in 2018/19.
For the rest of this column: https://uk.reuters.com/article/column-russell-gold-australia/rpt-column-gold-may-keep-australia-the-lucky-country-if-commodity-exports-stumble-russell-idUKL3N26L1IR