The Federal Government is naturally excited by the 'Australian Commodities' report which expects Australian mineral and energy exporters to benefit significantly from a rebound in world economic conditions and higher global commodity prices while supporting the controversial Free Trade Agreement (FTA) with the US.

Energy commodities, led by coal, are forecast to export an extra 11.7% in 2004-05, lifting export income to $23.1 billion. While metallic minerals and metals will gain an extra 10.6%, taking export earnings to $35.2 billion in 2004-05.

Buoyed by a greater demand for coal, alumina, nickel and base metals, export earnings for the mineral resources sector is forecast to be $58.3 billion in 2004-05, 11% higher than the $52.5 billion in 2003-04.

Australia currently has at least 26 major energy projects on the books, all committed to, with an expected capital expenditure of $13 billion. On top of that, ABARE recently counted at least 22 new mining projects, with commited investments of almost $4 billion.

This positive outlook could be further honed in light of the US FTA as the resource sector will be a definite beneficiary. Capital equipment will be more affordable for Australian companies as tariffs are removed and our exporters will have unfettered access to the US market as all metals and minerals become duty-free.