Australia warns of $2bn budget hole as iron ore slumps on China woes

Concerns elevated after bleak outlook from largest steelmaker

Wagons filled with iron ore enter Rio Tinto's railyard near Karratha, 1,250 kilometers northeast of Perth, Australia, on Oct. 20, 2023. Australia shipped $138 billion of iron ore in the year through June. © Reuters

SHAUN TURTON, Nikkei staff writer

August 19, 2024 14:12 JST

SYDNEY -- Australia's Treasury has warned the country faces a potential 3 billion Australian dollar ($2 billion) hole in its budget as iron ore prices slump faster than forecast amid concerns about China's economy.

An analysis released on Sunday by Treasurer Jim Chalmers noted spot prices for Australia's most valuable export had fallen 38% since the start of the year and 7.5% in the past week, to $81.80 per tonne late last week.