Three industry events held in Perth this month illustrate the city’s unique and fortuitous profile.
LAST week at the Sheraton Hotel, Perth played host to the annual Paydirt gold conference.
This week, the same venue hosted the annual global iron ore and steel forecast conference.
Across town at the Perth Convention Exhibition Centre, the city also hosted the Australasian Oil & Gas expo this week.
Perth locals might not realise it, but this is very unusual – and significant.
There is almost no other city in the world, and certainly no other provincial city of Perth’s modest size, that could successfully host three conferences of this kind.
These events were all held in Perth because Western Australia is both a large and diversified mining province and is emerging as a significant oil and gas producer.
This combination is globally unique and also bodes well for the state’s growth prospects.
It stands us apart from cities such as Houston and Aberdeen, which are major petroleum centres, or Denver and Johannesburg, which are among the most important mining cities in the world.
Perth, and WA, has the kind of diversity that other resources provinces can only dream of.
While often overshadowed by faster-growing sectors like iron ore and liquefied natural gas (LNG), the state’s gold sector remains a big contributor to employment, production and exports from WA.
Global players Newmont, GoldFields and Barrick were all represented at the gold conference, commensurate with their status as the industry’s heavyweights in WA.
A handful of very large gold projects have got under way in WA in recent years, notably Newcrest’s Telfer mine in the Pilbara and Newmont’s Boddington development to the south-west of Perth.
Beyond these, the giant Tropicana deposit in the goldfields, jointly owned by South Africa’s AngloGold Ashanti and Perth company Independence Group, is seen as the next big development opportunity.
In addition, the industry continues to be buoyed by a steady stream of smaller gold projects coming into production.
While the cost of these projects is usually measured in the millions, the cost of iron ore projects invariably sits in the billions.
Rio Tinto and BHP Billiton are still the biggest players in WA, but have been joined in the Pilbara by Fortescue Metals Group and Atlas Iron.
China-backed Citi Pacific Mining will be the next big producer in the Pilbara, once construction of its Sino Iron project south of Karratha is complete, while Gina Rinehart’s Hancock Prospecting aspires to become a producer in its own right, helped by income from its Rio-operated Hope Downs joint venture.
After years of build-up, the Mid West is witnessing tangible progress, with Gindalbie Resources starting development of its Karara project this year.
Murchison Metals, Sinosteel Midwest and Asia Iron are others planning to join Gindalbie on the development path, and eventually use the proposed port at Oakajee for their exports.
Like gold, the iron ore sector is home to multiple junior companies, which are working towards production.
In contrast, there is little if any room for junior producers in the oil and gas sector, specifically in the LNG segment that dominates in WA.
Only heavyweights like Woodside, Chevron and Shell have the deep pockets that are needed to develop an LNG project; however plenty of specialist service providers are looking to get a cut of the action.
This is reflected in the increased number of exhibitors at the AOG exhibition and conference.
The total number of exhibits increased this year to 408, with about 500 companies represented.
This included 110 international exhibitors from the US, UK and Norway; typically they are service companies with a mature business in the Northern Hemisphere, seeking growth opportunities.
The AOG conference has been run for the past 25 years as a bi-annual event. Since ownership of the conference changed in 2007 it has become an annual fixture, providing yet another indicator of the sector’s growth.
Collectively, the iron ore, oil and gas and gold sectors contributed $70 billion worth of exports last financial year, or 80 per cent of WA’s total.
That combination underpins WA’s good fortune and will for many years continue to be the envy of other states and countries.
