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Dollar rise proves no brake

DESPITE the appreciating Australian dollar Western Australia’s mineral and petroleum sales grew by 4 per cent to $28 billion in the 2002-2003 financial year.

According to the latest Department of Industry and Resources data, WA’s mineral and petroleum production has more than doubled in the past 10 years with an average growth rate of 8.5 per cent.

Despite the overall increase during 2002-2003 not all WA producers converted increased production and sales into increased profits due to the falling prices of some commodities.

Global commodity market conditions during 2002-03 played well for nickel, gold and the petroleum markets, impacted negatively on the iron ore, mineral sands and alumina markets and sustained a slight increase in sales in the base metal industry.

Standing alone, the WA diamond industry dramatically turned around in 2002-03 more than doubling in both sales and production.

During the financial year WA diamond sales rose by 58 per cent to $771 million. However this was said to be in response to strong marketing efforts rather than price increases.

One of the big winners in 2002-03 was nickel. The increase in prices, coupled with an increase in sales volumes, resulted in the value of sales increasing by 23 per cent to a new record of $2,460 million.

Another stand out performer was gold – it reversed four consecutive years of falling output. In 2002-03 the increase in gold sales and prices pushed gold sales to $3,444 million, a 5 per cent increase, boosting the WA gold industry from fourth to the third largest commodity sector in WA. It now accounts for 12 per cent of WA’s total mineral and petroleum sales.

However, full potential of gold’s increase was not realised because of the Australian dollar’s 12 per cent increase against the US dollar during 2002-03.

The largest resource sector in WA, petroleum, accounted for 38 per cent of the State’s total value of mineral and petroleum sales. Sales were up 7 per cent on the previous year due to firmer oil prices and increased sales volumes of LNG, condensate and natural gas.

On the other hand, weak international prices during the past financial year, compounded by the higher value of the Australian dollar, meant that record output by WA’s two largest mining sector’s iron ore and alumina could not be translated into sales.

 

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