WA resources output tops $70bn

Western Australia's resources sector churned out another near-record performance in 2009-10, with the value of the state's mineral and petroleum output totalling $70.9 billion, according to figures released by the WA Department of Mines and Petroleum.

The total was only marginally below the record $71.3 billion achieved in the previous year.

Iron ore, petroleum and gold were again the main drivers of the performance, accounting for 83 per cent of the total, or $59 billion.

Mines and Petroleum Minister Norman Moore said it was a strong performance.

"Iron ore remained WA's biggest sector in terms of value accounting for $33.7billion or 48 per cent of total sales. The sector achieved another milestone with shipments of iron ore increasing by 25 per cent to a record 396 million tonnes.

WA also topped the national charts in terms of total exports, accounting for $83 billion of the national total of $200 billion, or 42 per cent. Mining and petroleum accounted for 89 per cent of the state's total exports.

Queensland was the next biggest contributor, accounting for 21 per cent of the national total.

Though WA also once more led the nation in terms of mining investment at 63 per cent of the national total, the level of capital investment fell marginally to $21.7 billion, a decrease of 7 per cent reflecting the ongoing impact of the global financial crisis.

The department said though the prices of most key commodities had rebounded from the lows reached in early 2009 as the global economy improved, much of the benefit had been negated by the strength of the Australian dollar.

For example, zinc prices had surged 48 per cent in US dollar terms but only 4 per cent in Australian dollars, gold rose 25 per cent in US dollars but only 6 per cent in Australian dollars, and spot iron ore prices rose 24 and 4 per cent respectively.

Iron ore remained the state's most valuable industry, accounting for 48 per cent of the total value at $33.7 billion as shipped tonnages grew 25 per cent to a record 396 million tonnes.

Petroleum was the next biggest contributor at $19 billion, or 27 per cent of total sales, underpinned by growing LNG exports, though lower oil production and the strong dollar meant total petroleum sales were actually 12 per cent lower than in the previous year.

LNG sales ranked third in their own right at $6.9 billion.

Gold was the next most valuable commodity, with sales surging 26.6 per cent to a record $6.6 billion on the back of a 20 per cent rise in output to 5.3 million ounces.

Nickel followed at $4.1 billion, 36 per cent higher than the previous year, as surging prices more than countered static production levels of 177,000 tonnes.

Alumina was sixth at $3.8 billion, with other commodities such as mineral sands, copper, lead, zinc, diamonds and salt together contributing $5.9 billion.

Despite the positive figures Mr Moore said the Federal Government's proposed $10.5billion mineral resources rent tax threatened the buoyancy of the resources sector and had strong potential to block or even reverse the current recovery.

"The resource sector needs to continue to support the WA Government in voicing its resolute opposition to the Federal Government's proposed tax grab," he said.

Mr Moore said if the proposed mining tax could be successfully resisted, WA was well positioned to build on its strengths as a reliable supplier of quality resources at world cost-competitive prices.