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WA’s record-breaking year
RICHARD SELLERS
DIRECTOR GENERAL
DEPARTMENT OF MINES
AND PETROLEUM
The value of Western Australia’s mineral and petroleum industry
reached a record high of $101.2 billion in FY2011. This represented
an increase of 39% over the previous year and is the first time
resource sales have exceeded $100 billion.
This outstanding achievement was supported by exceptionally
high commodity prices as well as robust overseas demand for the
state’s resources.
The record was delivered against a backdrop of adverse
weather conditions in early 2011, a strong Australian dollar and
continued skill shortages.
By far the most outstanding performance in dollar terms in
FY2011 came from the iron ore sector and coupled with petroleum
and gold, accounted for 88% or $88.7 billion of all mineral and
petroleum sales.
Western Australia stands out in the global iron ore industry
and has continued its record-breaking run in FY2011 to notch up
yet another record averaging a 36% increase in value each year
over the past five years.
With its close proximity to Asia, vast iron ore reserves and a
“can-do” approach to expanding supply to meet demand, Western
Australian producers are well placed to remain a significant
element in the national economy for years to come.
The strong Australian dollar, which has been trading near
post-float highs in 2011, averaged US99 cents for the year.
High commodity prices helped to compensate for the strengthening
Australian dollar and played an important role in raising the value
of Western Australian mineral and petroleum sales in FY2011.
The following list shows average commodity price
movements between FY2010 and FY2011 in both US and
Australian dollar terms.
COMMODITY
US$
A$
Iron Ore
Up 58%
Up 59%
Tin
Up 63%
Up 45%
Nickel
Up 30%
Up 16%
Copper
Up 46%
Up 28%
Zinc
Up 8%
Down 3%
Crude Oil
Up 29%
Up 15%
Alumina
Up 21%
Up 8%
Gold
Up 26%
Up 13%
Lead
Up 14%
Up 2%
Cobalt
Down 5%
Down 15%
Mining and petroleum dominated Western Australia’s
merchandise exports, accounting for 95% of the total in FY2011,
and China remained the largest market, taking 42% of the state’s
exports. Commodity exports are forecast to increase over the next
five years as a number of significant iron ore and LNG projects
come on stream across the state.
The magnitude of the state’s mining developments is
demonstrated in the Australian Bureau of Statistics (ABS) figures
for FY2011. This data shows that Western Australia’s share of
national mining capital expenditure rose 29% to $28.3 billion and
accounted for 60% of the total ($47.7 billion). Over the past five
years private new capital expenditure by the industry has grown
on average by 18%.
Western Australia attracted the bulk of mineral and petroleum
exploration expenditure in Australia drawing in 54% and 72%
respectively in FY2011.
As highlighted by record sales in FY2011, the state’s mineral
and petroleum industry remains globally competitive and is
in a very strong position given the uncertain global economic
outlook. This follows a decade of rapid expansion where the
value of resource sales has increased on average by 17% each
year. Supported by a substantial pipeline of resource investment
activity, the industry is well placed to take advantage of rapid
industrialisation in Asia and the resultant strong demand
for commodities.
Western Australia’s economy continues to
positively bristle with a health and vitality
that other global powers would dearly like to
emulate. Records continue to be smashed as
WA’s mineral and petroleum industry persists
its steady growth in sales, buoyed by strong
commodity prices and ongoing solid demand
from China and other international Asian
markets. Richard Sellers, Director General
of WA’s Department of Mines and Petroleum,
provides a definitive summary of just how the
industry fared to the end of FY2011, and the
level of contribution made in terms of export
value by individual commodities
.
A RESOURCEFUL STATE
MINESITE 2011
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