01/10/2008 - 22:00

Big miners push exports to $68bn

01/10/2008 - 22:00


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While the state continues on its record run with $68 billion in exports, three big resource sector producers dominate the field.

While the state continues on its record run with $68 billion in exports, three big resource sector producers dominate the field. Janelle Macri reports.

WESTERN Australia reached a record $68 billion in exports in 2007-08, fuelled by the minerals and petroleum sectors and the growth in commodity prices.

But while the state enjoys the fruits of the resources boom, it has become increasingly reliant on just a handful of companies and commodities.

Mining giant BHP Billiton contributed more than $17 billion in exports in the year to June 2008 through a combination of its iron ore, nickel and alumina businesses, and its one-sixth ownership of the North West Shelf venture.

That equates to roughly 25 per cent of the state's total exports.

Rio Tinto, through its iron ore and Argyle Diamond business, also made a major contribution, generating more than $8.2 billion in exports.

WA Business News has calculated the value of exports generated from public data and company reports.

The North West Shelf venture is the state's largest export project, generating almost $12.75 billion in export revenue through the sale of liquefied natural gas, oil and condensate.

The NWS venture is operated by Woodside Petroleum, which co-owns the venture with partners BHP Billiton, BP, Chevron, Shell and Japan Australia LNG.

The export revenue from the venture is calculated from data contained in Woodside's annual report.

That contribution is set to get even bigger, with the recent commissioning of the fifth processing train on the Burrup Peninsula, valued at $2.6 billion.

Completion of the project will add 4.4 million tonnes of annual LNG processing capacity, bringing total capacity at the Karratha gas plant to 16.3mt a year.

First production from its new Angel platform, which will supply much of the train 5 gas, is expected later this year.

On its own, Woodside is ranked as WA's sixth biggest exporter, with revenues of about $3.2 billion from its Australian operations.

Together, BHP, Rio Tinto and the NWS venture make up just under half of the state's total exports.

For both BHP Billiton and Rio Tinto, higher production of iron ore and record high prices were a major factor in increased revenues.

BHP Billiton Iron Ore upped its revenue by more than 70 per cent on the previous year to $9.79 billion, and is ranked the state's third biggest exporter.

The company achieved an eighth consecutive annual production record, producing 103.7mt from its WA operations for the year ended June 2008, up from 91.6mt the previous year.

With the successful ramp-up of its iron ore rapid growth project 3, completed in last 2007, the company is forecasting production of 137mt in 2008-09.

Rio Tinto Iron Ore increased its revenue by more than 50 per cent on the previous year to $7.79 billion, and is ranked the state's fourth biggest exporter. Its wholly owned Hamersley Iron operation produced 112.1mt of iron ore in 2007, up from 97.2mt in 2006.

Shipments totalled 109.5mt, with shipment to China, its biggest market, reaching a new record level at 59.6mt.

Rio Tinto's 53 per cent-owned Robe River Iron Associates produced a total of 51.5mt in 2007, with 22.6mt shipped to Japan, its biggest single market.

Contributing to the company's production volumes was the commissioning of its 22mtpa Hope Downs 1 project, which began production in November, a full quarter ahead of schedule.

Stage 2 expansion to 30mtpa has been brought forward one year, with production planned to start at the start of 2009.

Rio Tinto is currently in the midst of studying the feasibility of expanding output from the Pilbara to 320mtpa by 2012.

BHP Billiton's Nickel West business, ranked as the state's fifth biggest exporter, experienced a slight drop in production, taking export revenue down to $3.51 billion.

In May, BHP Billiton officially opened its $2.2 billion Ravensthorpe laterite nickel project, which it expects will produce 50,000t of nickel a year by 2010.

The state's two alumina producers, Alcoa and Worsley Alumina, were ranked seventh and eight respectively in the list of WA's biggest exporters.

While Alcoa does not release its WA revenues, estimates from data obtained from the Department of Industry and Resources on alumina exports would put the company's export revenue for 2007-08 at about $3.3 billion.

Worsley Alumina, which is 86 per cent owned by BHP Billiton, is estimated to have generated about $1.64 billion in export revenues, on slightly increased production for the year ending June 2008.

The Department of Industry and Resources combines the export commodities of LNG and alumina under the category of 'combined confidential trade', which represents all data the Australian Bureau of Statistics considers to be sensitive in nature.

The total combined confidential trade export value was $9.5 billion, of which about half is LNG exports, with almost all of the remainder taken up by alumina exports.

Outside of the major resource companies, gold refiner AGR Matthey ranked as the state's second biggest exporter, with export revenues of $11 billion in 2007-08.

AGR Matthey refines gold produced in WA, as well as bringing in gold from interstate and overseas for refining and exporting.

Also outside resources was the 10th-ranked Grain Pool, the grain-marketing arm of the CBH Group.

Partial deregulation of the bulk wheat export market and high grain prices lifted its export revenue to $1.4 billion.

The Grain Pool has eclipsed former wheat export monopoly holder AWB, with AWB slipping just outside the top 10 WA exporters with WA export revenues of $1 billion.


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