Market update: Resources

2025 proved to be an uncertain but resilient year for Australia’s resources sector. Despite forecasts of Australia’s resource and energy exports falling to $372 billion in 2024-25, we saw what optimists may call a resilient performance, with export earnings of approximately $385 billion in 2025¹ (notwithstanding this still represents a decline of $30 billion from the prior year). This market strength is largely attributed to a record-breaking rise in the price of gold and a corresponding increase in export earnings. The decline is due to a number of factors, namely, geopolitical uncertainty, weaker global demand for coal, iron ore and gas, and a global trend of transitioning towards renewable energy sources.

Looking ahead, Australia’s resources sector has entered 2026 in a position of relative strength, albeit against a backdrop of moderating global growth, and high volatility in the commodities markets. As a result of this volatility, safe haven assets like gold are forecast to continue their strong performances throughout 2026 with export earnings expected to rise markedly, tempering the otherwise generally declining expectations in Australian resources forecasts. Other additional expected shifts in market orientation are expected from a focus on investments to secure energy supply.

Commodities update and outlook

Coal

From a production standpoint Australian coal projects remain largely unchanged with investment into 40 coal projects recorded in 2025² (mainly limited to expanding current existing brownfield projects), and Australia’s metallurgical coal export earnings continued to operate on a steady basis with Australia continuing to be its largest exporter globally³. Steady exports are expected to continue throughout 2025-26 and 2026-27 at approximately $36-37 billion⁴ primarily due to continued demand from India. Similarly, prices for metallurgical coal are expected to remain stable at approximately $US190 per tonne in 2026, representing a slight increase from $US187 in 2025⁵.

Thermal coal export earnings figures gradually declined in 2025 to approximately $32 billion, down from $37 billion the previous year, a trend that is expected to continue throughout 2026 and 2027 in which Australia is forecast to earn $29 and $27 billion respectively through the export of thermal coal.⁶ From a price perspective, 2024-25 saw thermal coal trading at $US121 per tonne, a figure that is expected to decline and stabilise at approximately $US109 per tonne in 2026 and rise to $US113 per tonne in 2027 due to rising production costs.⁷

Gas

Australia’s LNG sector remains a cornerstone of export earnings but started the year with softening prices and increasing policy scrutiny. LNG prices closed out 2025 at $US12.5/MMBtu, and, partially due to new supply from the US and Qatar, is forecast to drop to approximately $US10.7/MMBtu by 2027⁸. Due to LNG’s connection to the price of oil through long-term supply contracts, this price may be subject to greater volatility in 2026 arising out of the geopolitical unrest and the closure of the Strait of Hormuz.

Gas continues to play a critical role as a transition fuel, particularly in Asian markets but faces increasing competition from renewables and battery storage technologies.

Oil

As at December 2025, Australia has 50 oil and gas projects under development⁹. Despite this, much of the oil market commentary centres around the immense volatility of oil prices, largely due to geopolitical tension and the war in the Middle East. The unpredictability of the global oil market has rendered oil outlooks and forecasts futile for 2026. In December 2025, the Resources and Energy Quarterly forecasts the price of WTI and Brent crude oil to reach $US52 and $US56 respectively.¹⁰ However, as at the date of this article, WTI and Brent crude oil are trading at [$US115] and [$US105] respectively. Much of the volatility with respect to the price of oil can be attributed to the closing of the Strait of Hormuz (which would usually be used as the passageway for approximately 20%-25% of the world’s oil exports¹¹) and the turbulent nature of the US war with Iran.

Iron ore

Australia remains the world’s largest producer of iron ore¹² with capital expenditure for advanced projects increasing from $8.1 billion in 2024 to $12 billion in 2025.¹³ Market activity has followed this trend with Rio Tinto announcing its $2.8 billion investment in the Brockman Syncline 1 mine, and Rio Tinto and Hancock Prospecting announcing that they have received all necessary approvals for their $2.5 billon Hope Downs 2 project.¹⁴

Despite the increase in production, Australia’s iron ore outlook is increasingly challenged. Prices are expected to soften due to rising global supply, weakness in Chinese steel demand and declining prices. Iron ore export earnings are forecast to continue to account for over 25% of all of Australia’s resource and energy commodities exports through 2027, but, with falling prices, export earnings are forecast to fall by $2 billion to $114 billion in 2025-26 and to $107 billion in 2026-27.¹⁵

Gold

Gold remains the winner when compared to other commodities in 2025 with The World Gold Council’s Gold Return Attribution Model¹⁶ suggesting that investment activity is being propped up by on market speculation around geopolitical risks.

Gold continues to be regarded by investors as a safe haven asset and on inflation hedging vehicle. Prices reached record highs in 2025, driven by geopolitical uncertainty, central bank demand and expectations of lower global interest rates. Prices are likely to remain strong at around $US4,000 an ounce throughout 2026¹⁷.

Adding to its positive outlook, the world supply of gold is expected to grow in 2026 and 2027 as high gold prices are expected to cause an increase in supply from new and existing mines.¹⁸ Although Australian gold supply is not expected to change materially, Australian gold production is forecast to increase over the next two years to 340 tonnes in 2025-26 (a 16% year on year increase) with a further increase to 369 tonnes in 2026-27 as new projects become operational.¹⁹ Exports are predicted to rise in accordance with the increase in production.

Activity in the market

2025 saw a slight decrease in resources projects being developed with 432 major projects being developed nationally²⁰, down from 455 in 2024. The 2025 Resources and Energy Major Projects Report indicated the following breakdown of projects under development as at October 2025:

68 projects at advanced feasibility stage (worth $35 billion);
63 projects committed (worth $62 billion); and
21 projects completed (worth $11 billion).²¹

In addition to the development of major projects, M&A activity in the resources industry was characterised by several landmark transactions, including:

Northern Star Resources Limited completed its acquisition of De Grey Mining Limited by way of recommended scheme of arrangement in a transaction that was reportedly worth $5 billion²²;
Gold Fields Limited completed its acquisition of Gold Road Resources Limited by way of scheme of arrangement in a transaction reportedly worth $3.7 billion²³;
In July 2025, Ramelius Resources Limited completed its acquisition of Spartan Resources Limited in a transaction reportedly worth $2.4 billion²⁴; and
Argo Queensland, a new entity backed by European and Japanese investors acquired a 70% stake in Fitzroy Australia Resources for an undisclosed sum.²⁵

Future of resources – looking ahead

Looking ahead, given the high levels of volatility within the commodities sector the outlook for Australia’s energy and resources sector over the next 12 months will likely have a significant focus on investments into securing the supply of energy. Additionally, as demand for data processing accelerates, securing reliable and sustainable energy sources will be critical for powering data centres and will likely be a large focus for the sector.

Otherwise, while export earnings are expected to ease modestly, they remain elevated by historical standards and the sector continues to benefit from strong production volumes and diversified commodity exposure. Gold is likely to remain a key source of strength with surging prices with Australia being well positioned to take advantage of these favourable market conditions as the third largest producer of gold in the world²⁶. Downside risks still remain however, including weaker than expected global growth, escalating geopolitical tensions and policy uncertainty.

[1] Resources and Energy Quarterly – December 2025 page 6.

[2] Resources and Energy – Major Projects Report 2025 page 7 – new and expansion projects.

[3] Resources and Energy Quarterly – December 2025 page 26.

[4] Resources and Energy Quarterly – December 2025 page 8.

[5] Resources and Energy Quarterly – December 2025 page 29.

[6] Resources and Energy Quarterly – December 2025 page 14.

[7] Resources and Energy Quarterly – December 2025 page 33.

[8] Resources and Energy Quarterly – December 2025 page 39.

[9] Resources and Energy – Major Projects Report 2025 page 7.

[10] Resources and Energy Quarterly – December 2025 page 42.

[11] https://www.iea.org/about/oil-security-and-emergency-response/strait-of-hormuz

[12] Resources and Energy Quarterly – December 2025 page 19.