Takingstock
WA mining’s mixed report card
Coastline between Karratha and Port Hedland
Simon Phelps Photography
Over the past year, the Western Australian
resources sector has continued to grow and
continued to make a significant contribution
to the state and national economies. Iron ore
shipments out of the Pilbara have set new
records and major LNG projects have got
closer to production.
The important contribution of the
resources sector is underscored by the
Western Australian government’s forecast
of $5.8 billion in royalty payments to the
state budget. To put that growth in context,
royalty income from the resources sector
now accounts for 21% of all government
revenue, up from only 5% a decade ago.
The year has not been all smooth
sailing, however. We have seen volatile
commodity prices, particularly in important
commodities such as iron ore, gold and
nickel. We have also witnessed companies
struggling to get access to capital for the
development of new projects.
Recently we have seen one particular
challenge rise in prominence: the cost
of doing business in Western Australia.
Unfortunately we are close to becoming the
most expensive resources province in the
world. When combined with decreasing ore
grades and new minerals and energy rich
regions emerging around the world, the
level of competition in the global resources
sector is increasing for Western Australia.
Restoration
of
our
international
competitiveness is crucial to the future
growth of the sector and to that end the
Chamber of Minerals and Energy (CME)
has undertaken research into the respective
drivers of these cost increases.
Our research uncovered the main
Reg Howard-Smith
Chief Executive Officer
Chamber of Minerals
and Energy of WA
Minesite 2013
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