Western Australia’s resources industry achieved a bumper year in 2018, reaching a record $127.4 billion in sales mainly thanks to an 81% boost from the liquefied natural gas (LNG) sector.
According to new statistics from the Department of Mines, Industry Regulation and Safety, the state saw a 16% increase on 2017 sales, with LNG contributing more than two-thirds of the $17.8 billion boost in total mineral and petroleum sales.
The previous calendar year record was set in 2013 with sales totalling $116 billion.
Iron ore is still the biggest commodity in the state, valued at $64 billion, with petroleum coming in second at $35.3 billion. The petroleum sector includes LNG, as well as crude oil, condensate, natural gas and liquefied petroleum gas.
The other three major commodities are gold at $11.5 billion, alumina valued at $7.9 billion and nickel trailing at $2.6 billion.
WA’s resources industry also saw new records set in sales volumes and employment.
Record sales volumes
LNG volumes rose by 34% to top the charts at 43.7 million tonnes, with lithium (spodumene concentrate) volumes also climbing 24% to reach a new record of 2.1Mt.
Meanwhile, gold sales volumes increased for the third year in a row to hit its highest level in 20 years at 212t or 7.5 million ounces.
According to the report, the rising volumes of LNG in recent years can be attributed to the start-up of several new LNG projects, marking the last of this wave of “mega” LNG investment projects to reach production.
The statistics also show the alumina and bauxite sector growing 35% to $7.9 billion on the back of stronger alumina prices, while cobalt sales were up 33% to $507 million.
However, it hasn’t been all good news across the board – diamond and coal sales were down 3% to $259 million and $327 million, respectively.
Meanwhile, sales from WA’s struggling nickel sector were lower again in 2018. However, the recent recovery in nickel prices has managed to boost the value of the sector by 16% from $2.3 billion in 2017 to $2.6 billion.
Employment in WA’s minerals sector also climbed 8.5% with the average number of workers increasing from 111,000 in 2017 to 120,437 in 2018.
“Creating and supporting jobs for Western Australians is the McGowan government’s top priority, so it’s great to see growth in mining employment for a second year running,” WA Mines and Petroleum minister Bill Johnston said in a media statement.
“Together, the iron ore and gold sectors accounted for about 70% of mineral sector jobs in 2018; it’s also pleasing to see further growth in LNG and lithium,” Mr Johnston added.
Figures from the Australian Bureau of Statistics show close to $18 billion was invested in the state’s mining industry in 2018 – more than half of national expenditure.
This is a far cry from the 2012 peak of more than $90 million with $50 million invested in WA alone, and represents the sixth consecutive year that mining investment has fallen on a national scale.
According to WA’s mines department, this substantial decline in investment is “largely the result of the completion of major, multi-billion-dollar projects committed to during the iron ore and LNG investment boom”.
Despite this, investment interest remains in the lithium and battery material related sectors, while the more traditional sectors like iron ore and gold continue to be a target for mergers and acquisitions, as well as new and expanded projects.
WA has around $113 billion of resource projects in the pipeline with recent announcements including: a $9.5 billion proposed investment in the Clio-Acme expansion of the North West Shelf LNG project; the $14.3 billion development of Woodside’s (ASX: WPL) Scarborough gas project; Rio Tinto’s (ASX: RIO) $3.5 billion development of its Koodaideri iron ore project; Western Areas’ (ASX: WSA) $299 million Odysseus underground nickel mine development; and a $127 million refurbishment of the Windimurra vanadium plant.