Western Australia’s mining, oil and gas sector
worth $121 billion
Billions of dollars of mining investment being ploughed into the Pilbara
Iron ore and gold mining in Western Australia has seen massive growth over the past few years. Even today, we still see billions of dollars of mining investment being ploughed into the Pilbara and surrounding regions. Not forgetting the huge contribution made by offshore gas projects like Browse and Gorgon that are raking in billions of dollars worth of revenue for the State.
Top of mind for every WA mining company is wrestling with a volatile iron ore price that can have massive effects on its profitability. This presents big challenges for mining companies like Rio Tinto, Fortescue Metals Group and BHP Billiton, although their low production costs†seem likely to be able to†shield them from further price drops in iron ore.
“$121 billion worth of value”
Despite the continual issues faced by these companies, good news emerged this week from the WA Department of Mines and Petroleum. It has released figures showing Western Australia`s combined mining and petroleum sector is valued at somewhere in the region of $121 billion, with iron ore being the clear winner in terms of value to the sector with some $73 billion in revenue.
The development of Western Australian mining, especially iron ore, coupled with strong Chinese demand saw a 23 percent uplift in ore exports to a staggering 631 million tonnes.
Other minerals mined in WA† such as gold, copper, lead, diamonds and even salt were solid performers in the 2013-14 fiscal year. Gold raked in $8.8 billion worth of sales which places it as WA`s second most valuable commodity. Other minerals like alumina represented $4.2 billion, and nickel came in at $3.5 billion in revenue for the state.
As you would expect, if you have been following Australian mining news , LNG is rapidly emerging as a†huge contributor to the WA coffers, showing a strong $14.4 billion in revenue on the leader board.
China is still Western Australia’s biggest export destination, swallowing up 54 percent of exports, closely followed by Japan (18 percent) and South Korea (8 percent).
Billions of dollars of investment still to come in WA
The Western Australian mining and resources sector is still considered the leader for mining investment with approximately $160 billion worth of projects ‘under construction’ or in the ‘committed stage’.
There is also an additional $108 billion to spend on new mining, oil and gas projects in WA over the coming years.
As a footnote, the Department of Mines and Petroleum said it expects WA mining to continue its strong run, despite the challenges of the price of iron ore and the weakening labour market.