Northern Australia plays a key role in national economy and energy security

The northern region of Australia plays a crucial role in the economy and energy security of the country. Every day, Perth Airport sees over 160 flights carrying 13,000 passengers to and from various destinations in northern Australia, transporting skilled workers to minerals and energy operations. Other airports in Darwin and Brisbane also facilitate air services to and from resources hubs in the region. This continuous flow of flights serves as a barometer of the health of the Australian resources sector, which is predominantly concentrated above the 26th parallel.

In the fiscal year 2023-24, aircraft and passenger movements within Western Australia surpassed interstate traffic for the first time, leading to record throughput at Perth Airport. Despite fluctuations in mineral prices, the resources sector remains robust. The minerals in northern Australia hold significant importance in the national economy and contribute substantially to state and federal government revenues.

The Department of Industry, Science, and Resources’ latest Resources and Energy Quarterly report from December 2024 emphasizes that the minerals and energy sector accounts for two-thirds of national exports and 11.4 percent of GDP. In the same period, the combined value of the top four exports from northern Australia – iron ore, liquefied natural gas (LNG), metallurgical coal, and thermal coal – amounted to $261 billion, representing 63 percent of total resource exports.

Northern Australia plays a pivotal role in the national resources sector, with iron ore exports reaching over 900 million tonnes in 2024, contributing to 56 percent of global seaborne trade in the commodity. The region also dominates in metallurgical coal exports, supplying 46 percent of global demand. Additionally, all of Australia’s LNG exports totaling 81 million tonnes in 2023-24, with a value of $69 billion, stem from northern Australia, ensuring the energy security of countries like Japan, Taiwan, and South Korea.

Exploration spending is a key indicator of the health of the minerals industry, with northern Australia hosting a significant number of exploration properties valued at $14 trillion. Although specific data on mineral and petroleum exploration spending for the region is unavailable, trends in the Northern Territory indicate an 86 percent increase in mineral exploration budgets over the past five years, driven by the search for critical minerals such as lithium, copper, and uranium.

With 163 active mines and multiple processing plants in northern Australia, the region produces various commodities like copper, zinc, gold, and coal. In recent years, there has been a shift towards renewable energy sources in the region, leveraging its vast land and sunlight resources for large-scale production.

While the mineral and energy future of northern Australia appears promising, the region faces challenges in infrastructure development and natural disaster resilience. Government efforts to improve transport links, energy systems, and communication services are crucial for sustaining growth. Coordination between different levels of government and agencies is essential, along with the need to control costs amid competition from international LNG suppliers.

Despite these challenges, the northern region of Australia remains a key player in the national economy, attracting skilled workers from around the country. The focus on local workforce development and improving the quality of life in northern cities and towns will be vital for maximizing the region’s potential in the resources sector. The continuous influx of skilled workers highlights the importance of the region in powering the Australian economy and ensuring energy security.