Article by Stuart McKinnon courtesy of the West
New data has confirmed WA’s resources sector is enjoying a genuine resurgence with investment rising for the first time since the mining boom of nearly a decade ago.
The new resources miniboom is also revealed in record sales and employment figures in the sector over the past 12 months as well as a jump in exploration expenditure.
Figures from the WA Department of Mines, Industry Regulation and Safety show almost $19 billion was invested in WA’s resources sector in 2019-20, up from $17 billion the previous year.
It was the first annual increase since the peak of the last mining boom when $48b was invested in a single year in 2012-13, with the eye-watering spend attributable to big LNG and iron ore projects.
The investment surge of the past 12 months was underpinned by the three big iron ore miners each undertaking significant sustaining projects collectively worth about $13b, as well as Fortescue Metals Group beginning work on its $3.7b Iron Bridge magnetite project.
The DMIRS data also shows $129b worth of resources projects in the pipeline across WA, up from $118b in March.
Besides growing investment in resources, the figures also revealed WA’s mining sector outperforming on an operational basis.
The sector delivered record sales of $172 billion last financial year, representing a $22b increase on the $150b registered in 2018-19.
Iron ore and gold drove the all-time-high figure, both achieving records in their own right with the steel-making commodity generating $103b in sales (up 26 per cent) and the precious metal delivering $16b (up 32 per cent).
The records came as iron ore enjoyed an eight-year high price of $137.92/t ($US92.69/t) on average over the 12-month period while the Australian dollar gold price surged to a record, achieving an average price of $2339.05/oz($US1562.02/oz).
Mines and Petroleum Minister Bill Johnston, pictured, said the record results underpinned the importance and resilience of the resources sector as WA recovered from the impacts of the COVID-19 pandemic.
Paring the gains, WA’s petroleum sector experienced a 4 per cent dip in sales to $37b on softer oil prices amid the coronavirus pandemic.
And sales of spodumene concentrate fell by a massive 45 per cent to $917m on lower volumes and heavy price falls for lithium. Mineral sands sales were also down 5 per cent to $666m. The figures were bolstered by a 6 per cent fall in the average price of the Australian dollar over the period.
The record numbers also provided a $9.3b royalty windfall for the State Government, representing a 42 per cent surge on the previous year and a record high. A record average of 135,000 people were employed in the resources sector in WA during 2019-20, up from 128,374 the previous year.
“Creating jobs is the McGowan Government’s number one priority, so it’s encouraging to see employment continuing to grow in the resources sector,” Mr Johnston said.
Construction associated with iron ore and nickel projects accounted for most of the employment growth, while jobs in exploration also increased 12 per cent.
Mineral exploration expenditure hit $1.7 billion, an increase of 17 per cent on the $1.4 billion spent in 2018-19.
Mr Johnston said it was particularly pleasing to see strong growth in exploration expenditure, which had been achieved despite the difficulties caused by the global pandemic.