28/05/2008 - 22:00

Boom covers all corners of the state

28/05/2008 - 22:00

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Four major developments this month have highlighted the strength of Western Australia's resources sector, with projects extending beyond traditional mining provinces to areas like the Great Southern and South West.

This week saw the official opening of BHP Billiton Ltd's $2.2 billion Ravensthorpe nickel project and a $1.5 billion merger deal that adds to the prospect of major iron ore mines opening up in the Mid West.

These developments followed last week's official opening of Fortescue Metals Group Ltd's Pilbara iron ore project, which marked the emergence of a third major iron ore player in Australia.

The fourth big announcement this month was the go-ahead of BHP Billiton's Worsley Alumina refinery expansion, at an estimated cost of $2.5 billion.

These mining and processing projects come on top of the development of giant oil and gas projects in the state's north-west, led by Woodside Petroleum's $12 billion Pluto liquefied natural gas project.

There is the prospect of even bigger petroleum projects off the Kimberley coast, with three proposals at the advanced stage of planning.

The scale of resource investment in the state was highlighted in a recent Australian Bureau of Agricultural and Resource Economics report, which found that WA contributed the highest portion to the $70.5 billion investment in advanced resources projects across the country.

This included 12 petroleum projects worth $27.9 billion and 10 iron ore projects worth $16.5 billion.

The record investment levels have contributed to acute labour shortages and low unemployment rates.

The latest data shows that WA's unemployment rate is just 3.3 per cent, which is 0.9 per cent lower than the national average of 4.2 per cent.

The flip-side of this is the skills shortages; a recent Chamber of Commerce and Industry WA report concluded that the state will require an additional 400,000 workers over the next decade to meet demand.

Forecast economic growth for the state by the CCI in its latest Economic Compass report is pegged at 6.5 per cent for the year to June 2008, 6 per cent in 2009 and then 5.5 per cent the following year.

While growth is forecast to decline over the coming years, it has not stopped the frenetic activity in the resources sector.

This week the spotlight turned to the Mid West region with emerging iron ore players Murchison Metals Ltd and Midwest Corporation Ltd tentatively agreeing to merge, despite the latter still upholding its recommendation of a Sinosteel takeover offer.

The much publicised, inaugural 170,000 tonne shipment of iron ore from Fortescue's Pilbara project met the company's May 15 deadline.

The shipment was the culmination of four years of work and the investment of nearly $3 billion for the construction of the mine, a new port and associated rail infrastructure.

FMG's iron ore rival, BHP Billiton, gave the go-ahead to the expansion of its majority owned Worsley refinery, near Collie, early this month.

The cost of the 1.1mtpa expansion has nearly doubled from earlier estimates; in August last year BHP said an indicative cost for its 86 per cent share was $US1 billion.

That has now increased to $1.9 billion.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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