21/10/2013 - 11:18

WA resources output dips in value

21/10/2013 - 11:18

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WA resources output dips in value

The value of Western Australia's resources industry has fallen slightly from last year's record level, but has still topped $100 billion for the third consecutive year.

The state's mineral and petroleum sales reached $102 billion in 2012-13, according to new statistics from the Department of Mines and Petroleum.

That valuation is down from $106 billion last year, with the department attributing the fall to the high Australian dollar and a fall in the price of gold.

Mineral and petroleum exports comprised 89 per cent of the state's total merchandise exports.

Iron ore remained the state's highest value commodity, accounting for $56.4 billion, or 73 per cent, of total mineral sales.

Strong demand from China meant the iron ore sector achieved record levels of export quantities, with the volume of sales up 13 per cent to 513 million tonnes.

However, the fall in prices meant the value of iron ore sales dropped by 7.3 per cent.

Gold sales slumped by 4.6 per cent on the previous financial year as producers grappled with price pressures.

Despite this, gold remained the second most valuable mineral sector with total sales of just less than $9 billion. 

Nickel producers faced a similar scenario, with the quantity of sales increasing by 9.5 per cent to a record 228,000 tonnes but the total value of sales decreasing by 2.3 per cent to $3.6 billion as the commodity's price fell.

There was better news for base metals producers, with the overall value of base metals - which includes copper, lead and zinc - increasing by 22 per cent to just less than $1.6 billion in 2012-13.

Copper sales were up 24 per cent on the previous financial year to $1.4 billion, while lead sales soared from $12.9 million to just less than $47 million.

In both cases, sales were boosted by projects coming on stream - the resumption of mining at the Paroo station lead mine (formerly Magellan lead mine) and the start-up of Sandfire Resources' DeGrussa copper mine. 

The petroleum sector increased sales by 2.9 per cent to $24.5 billion with liquefied natural gas (LNG) the most valuable product, increasing output by almost 29 per cent to a record 19.8mt. The ramp-up of Woodside's Pluto LNG proiect was the main driver of that increase.

Mines and Petroleum Minister Bill Marmion said WA was now the 15th best exploration destination in the world, according to the Fraser Institute Survey of Mining Companies.

The figures come as CommSec's latest quarterly ‘State of the States’ report confirms WA's place as the nation's economic leader, albeit with a reduced dominance.

And despite an admitted cooling in the mining sector, as major project moves from the construction to production phase, WA still has an estimated $146 billion worth of resource projects under construction or in the committed stage of development.

A further $97 billion has been identified as planned or possible projects in coming years.

Business News' annual biggest exporters survey this month revealed that iron ore remained the key driver behind the state's exports, with big producers BHP Billiton, Rio Tinto and Fortescue Metals Group topping the list.

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