Western Australia still holds its envied position as the engine
room of the national economy, as it continues to exceed previous
production and sales of its myriad resources. During a time
when commodity prices have dropped, the state has increased
production to meet the continued demand from its nearby Asian
markets, predominantly China.
The value of Western Australia’s mineral and petroleum
industry has exceeded $100 billion for the third consecutive
year. DMP’s recently released figures (Oct 2013) show that
in FY2013, the value of mineral and energy resources from
WA was $102 billion.
Although the value of the industry fell by 3.8% from FY2012,
this still represents the second highest on record, and during a
period when the strong Australian dollar maintained an average
exchange rate in excess of US$1. While the high value of the
Australian dollar played a part in lower prices for Western
Australian producers, the value of sales overall was maintained
by an increase in quantities sold.
Mineral and petroleum exports comprised 89% of the
state’s total merchandise exports, representing the major
contribution to Western Australia’s 47% share of the nation’s
total merchandise exports. China remains WA’s major trading
partner, taking 47% of merchandise exports, followed by
Japan at 19%.
Australian Bureau of Statistics figures showed that
investment activity in Western Australia strengthened during
FY2013, with the state’s mining industry investing a record
$48 billion, a 7% increase compared to FY2012.
Western Australia remained the nation’s leading mining
investment destination, attracting 51% of total national capital
spending valued at a record $95 billion. Fuelled by strong
demand for resource commodities from Asia, new capital
expenditure by the state’s mining industry has grown at an
annual rate of 23% during the five years to FY2013.
The dominance of the resources sector in the nation’s
economy is expected to continue, given the number of projects
that have been expanded or developed, in particular iron ore and
LNG. As at September 2013, Western Australia had an estimated
$146 billion worth of resource projects under construction or in
the committed stage of development. A further $97 billion has
been identified as planned or possible projects in coming years.
Highlights in FY2013
Iron ore and gold together accounted for $65.3 billion (84%) of
all mineral sales in FY2013.
Iron ore remained the state’s highest value commodity,
accounting for $56.4 billion (73%) of total mineral sales in
FY2013. With strong demand, led by China, the sector achieved
record levels of export quantities. This resulted in 513 million
tonnes being exported, representing an increase of 13% on the
previous financial year. Lower prices, however, resulted in a
decrease of 7.3% in the value of iron ore sales.
While gold was the second most valuable mineral sector, the
quantity sold fell slightly from 5.8 million ounces in FY2012 to
5.7
million ounces. The gold price continued to climb in the first
half of FY2013, but started to weaken in December 2012 and
continued its downward trend to June 2013. This resulted in
total sales of just under $9 billion for FY2013, a fall of 4.6% over
the previous financial year.
Petroleum, which includes crude oil, condensate, LNG,
natural gas and LPG (butane and propane), was valued at a
record $24.5 billion. The increase can be attributed to the Pluto
LNG project coming on stream, which countered falls in crude
oil, LPG and domestic gas. LNG was the most valuable petroleum
product in the state in FY2013, with output increasing by almost
29%
to reach a record 19.8 million tonnes, and the value of sales
increasing by 25% to a record $12.5 billion. LNG production is
forecast to grow in the period ahead due to increased demand
from Asia and supply from new projects including
Wheatstone and Gorgon.
CITIC Pacific Mining is
spearheading the growth of a
major new industry in Western
Australia through its development
of the massive Sino Iron
magnetite project near Karratha.
www.citicpacificmining.com.au
Photos courtesy of Sandfire Resources