Strong overseas demand for minerals and petroleum, particularly from China, and strengthening commodity prices pushed the value of Western Australia’s resources industry up 25 per cent to a record $53.4 billion in 2006-07.
Strong overseas demand for minerals and petroleum, particularly from China, and strengthening commodity prices pushed the value of Western Australia’s resources industry up 25 per cent to a record $53.4 billion in 2006-07.
According to estimates by the Department of Industry and Resources, nickel, iron ore and petroleum accounted for most of the increase in value, with the three industries accounting for about 75 per cent of the total value.
Petroleum is still the largest resource sector by value, reaching a record $16.4 billion in sales in 2006-07 on the back of high oil prices and an increase in crude oil production.
Increased production and further price rises boosted the state’s iron ore industry to a total value of $15.8 billion, up 24 per cent on last year.
A record 258 million tonnes of iron ore was sold, up 6 per cent on last year, fuelled by strong Chinese demand.
Nickel was a stand-out performer in 2006-07, achieving an 110 per cent increase in export values, despite production and sales quantities experiencing falls.
Nickel prices peaked in May 2007 at a record $US54,200 per tonne, before easing to between $US26,000 and $US30,000/t in early October.
But not all commodities recorded increased output levels, with rising prices masking production falls across a number of sectors. In addition to nickel, gold, diamonds, coal and lead all experienced decreases in production in 2006-07.
Gold output dropped by nearly 6 per cent to five million ounces, or 156,675 kilograms, and remains well below the peak output levels achieved in the late 1990s.
But that didn’t stop the commodity from achieving a 10 per cent increase in sales value, buoyed by continued strength in the gold price.
An almost 30 per cent rise in crude oil production realised $7.6 billion in sales, up 28 per cent. The Enfield and Wanaea fields accounted for most of the increase.
DOIR said the results should be considered in the context of a 5.2 per cent strengthening of the Australian dollar against the US dollar, as well as adverse weather conditions in the first quarter of 2007 and ongoing difficulties with equipment supplies and skills shortages.
Mineral exploration expenditure in WA continued to grow strongly, rising in each of the six quarters to June 2007, by an average rate of 8.5 per cent, or $15 million, per quarter, according to the Australia Bureau of Statistics.
Most of the growth was driven by exploration on iron ore, up 79.7 per cent or $38 million, nickel and cobalt.
Petroleum exploration expenditure more than tripled, rising $357 million to a record high of $525 million through the year to June quarter 2007.
