In its latest Resources and Energy Quarterly, BREE said mining earnings were forecast to grow 15% to $122.9 billion in 2013-14.
The estimate was slightly lower than the forecast released in March, which tipped a 17% rise to $125 billion.
Growth in iron ore volumes is expected to underpin the rise in mining earnings, but BREE has cut its price forecast for 2014 from an average $US111/t ($A118/t) to $105/t.
In 2015 prices are expected to fall further and average $97/t.
“While the iron ore price is expected to rebound later in 2014 as port stock levels in China ease and steel demand picks up again, the abundance of supply that has come online will limit the prospects of iron ore prices rebounding to the high levels of 2013,” it said.
BREE said further high cost domestic supply in China was expected to go offline but it was unlikely to offset a substantial increase from Australia.
It said this growth in volumes was expected to come from recently commissioned mines and expansions delivering a full year of production.
Looking at the wider industry, BREE said miners were struggling to realise productivity improvements, and the high Australian dollar remained a key threat.
“Even though Australian producers have been successful in delivering productivity and cost reduction programs they still find themselves at the wrong end of the cost curve,” it said.
“In some cases, the cost reductions of Australian producers have been negated by the stubbornly high Australia dollar, which has appreciated since the start of 2014 while the currencies of competitors have depreciated.”
While investment is falling and big challenges remain, BREE said production was still rising and mining remained a key contributor to the economy.
It said while growth in China had slowed, the Asian powerhouse was still ticking along, with emerging economies and a recovery in the US and Europe contributing to global growth.
In other commodities, BREE’s forecast for the gold spot price remained relatively stable at $1261 an ounce, with higher gold fabrication demand offset by declining investment purchases.
While a moderate boost was expected in 2015 due to jewellery purchases, the bureau said the appeal of gold as an investment asset was expected to remain subdued.
In 2015, the average gold spot price is forecast to increase 3% to $1295 an ounce.
On the production side, BREE said rain had hindered gold operations in some parts of Western Australia, but the wider sector would manage a 7% increase this year due to the ramp-up at new mines such as Tropicana and the Cadia Valley expansions.
After this year production is expected to soften.
“In 2014-15 mine production is forecast to be 271 tonnes,” BREE said.
“This decrease of 0.5% is due to expected lower output at several mines that are ramping down production as they approach the end of their mine life.”
In copper, growth from recently started mines is expected to outpace consumption in 2015 and push prices to lower levels.
For 2013-14, Australia’s copper mine production was estimated to achieve a historical high and exceed 1 million tonnes, an increase of 3.4% from the previous year.
BREE said the increased production was underpinned by new mines ramping up to full production, including Cadia East and DeGrussa, and continued productivity gains at a number of other operations.
Despite the growth, poor weather earlier this year also hampered some copper mines, with a sinkhole at Aditya Birla’s Nifty mine project also cutting production.
In nickel BREE said the Indonesian export ban had been good for other producers, and prices were expected to average $17,644/t for 2014, a 17% boost on 2013.
Local nickel production in 2013-14 was estimated to have fallen 11% compared to the previous year to 218,000t.
The bureau said a decline at BHP Billiton’s Nickel West operations and other curtailments was set to keep production in line with that figure in 2014-15.
