Opportunities bloom in the desert

OVER the past two years, Western Australian companies have been awarded contracts worth more than $1.7 billion on big mining and resource processing projects.

Local business can look forward to even more opportunities, with major resource projects expected to spend up to $5 billion in WA over the next two to three years. The amount of work flowing to local firms ranges from 50 per cent to 80 per cent of total spending on the big projects, as discussed in detail in last week’s WA Business News.

Project proponents say the main reason this percentage is not higher is the inability of local firms to manufacture specialist capital equipment. Predicting the volume and timing of future work remains a big challenge.

The four big projects currently underway will collectively deliver about $2.4 billion of work to WA firms. Most of these contracts have already been awarded and the balance will mostly be awarded over the next 12 months.

Three further projects – Telfer, Burrup Fertilisers and Wesbeam – have either just commenced or are about to do so. They will collectively deliver about $1 billion of work to WA firms, mostly over the next 12 months.

Looking further ahead, there are several big gas processing projects located on the Burrup Peninsula that could commence in the next one to two years.

To these could be added further possible projects such as ChevronTexaco’s $6 billion Gorgon gas development, the $1 billion Hope Downs iron ore mine and BHP Billiton’s Ravensthorpe nickel project.

If three or four of these projects get underway at around the same time, the ability of WA to meet the local content targets of projects proponents could be sorely tested.

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