WA’s mining and resources sector: the unsung hero of Australian economy
A Western Australian resources sector which carried Australia’s economy through the darkest hours of the covid-19 pandemic continues to punch above its weight according to a new study.
The latest data obtained by the Chamber of Minerals and Energy of Western Australia (CME) identified that WA’s mining and petroleum industries contributed a staggering $98.98 billion to Australia’s economy in 2021-22.
The analysis of 71 Western Australian resources sector companies found the State’s mining, energy and contractor industries also directly employed more than 69,000 full-time Australians during that time.
However, the CME says this is likely to only be a fraction of the total numbers.
WA resources sector critical to the economy
CME chief executive officer Rebecca Tomkinson said the data once again highlighted the critical day-to-day impact provided by the WA mining and resources sector.
“It’s remarkable to see the efforts of an entire industry over a year boiled down to just the raw numbers. Whichever way you look at the figures, the contribution that our industry makes to both WA and the nation is enormous,” Ms Tomkinson said.
“It should also be noted that these results come hot on the heels of the covid-19 pandemic at its height of daily new confirmed cases, and this economic contribution data reflects the immense efforts undertaken by the industry to adapt and operate under unprecedented and challenging conditions.
“The results of this survey capture about 83% of our members’ direct contribution, however, the ‘total’ sector-wide figure to the broader economy is likely to be well in excess of the $99 billion figure.”
The results were compiled from the CME’s annual survey of ordinary member companies, supplemented with data from public company reports.
The annual economic factsheets produced out of the data showed that approximately $11.7 billion was contributed in WA government payments, with more than $28.9 billion contributed to the federal government in taxes.
The study also unearthed that supply chain spending by the 71 companies created an additional 493,235 full-time jobs and $78.37 billion in gross value add to the Australian economy.
More major projects underway
“Some of this value add is created through the sector’s demand for construction, exploration, mining support, financial and other goods and professional services.
It is estimated through all this activity, these companies helped contribute to 7.7% of gross regional product to Australia’s economy,” Ms Tomkinson said.
“Both the direct and indirect contributions of CME’s member companies spread far and wide throughout communities around WA and, indeed, across Australia.
“With more than $148 billion of projects under development or proposed in the WA resources sector pipeline, these types of contributions should continue to flow as projects kick off and operate business-as-usual.”
The information collected and analysed from 71 member companies represented 83% of the WA resources sector by production and involved more than 100 operational sites and a dozen commodities across the state.
Mining a major balance of payments contributor
New data compiled by the Australian Bureau of Statistics (ABS) had confirmed that the nation’s mining sector was the largest contributor to income debits and grew the most over the past decade.
From 2012, Mining grew from contributing 21% of the total to 43% in 2022. In level terms this represented a $65.9 billion increase in the same period, or 388% increase on 2012 figures.
The ABS said this shift reflects the level of income payments flowing out of the country to non-resident companies who have invested in these industries, having returns on their investment paid out through dividends and profits.
“Though these are often reinvested back into the Australian enterprises, the sheer size of recent profits earned has seen these levels of income outflows to non-resident investors grow substantially,” the ABS commented.
Australia’s current account surplus increased by $581 million to $12.3 billion in the March quarter 2023. This reflected a higher trade surplus partly offset by an increase in the net primary income deficit.