News

Article by Simone Grogan courtesy of Business News.

Western Australia’s resources industry has smashed another annual record, with weaker iron ore prices made up for by the state’s flourishing lithium sector and soaring oil and gas prices.

Department of Mines, Industry Regulation and Safety data released today revealed a new annual sales record for the state of $246 billion, a $15 billion jump on last year’s record.

Iron ore sales of $126 billion made for the leading contributor to the strong performance, despite prices coming off from all-time highs during 2021 amid a downturn in China’s property and construction sectors.

“There was 855 mt of iron ore sold from Western Australia, the highest quantity on record for a single calendar or financial year,” DMIRS reported.

“It was supported by record shipments from Hancock Prospecting and Fortescue Metals Group , as well as a recovery in sales from Rio Tinto’s operations particularly later in the year due to operational improvements and the ramp-up of Gudai-Darri.”

There are approximately $60 billion worth of projects in the state currently under construction or committed, it was estimated.

Both Fortescue and Rio Tinto have affirmed they are on track for full-year production targets in recent quarterly updates.

Sales of spodumene concentrate – the mineral that contains lithium – reached an record high of $163 billion during 2022, making it WA’s third most valuable commodity by sales prices for the period.

It marked a 6 per cent increase on the amount recorded in 2021.

LNG was the second strongest commodity by export value during 2022 with a value of $51 billion, $13 billion more than a previous high in 2021.

“Sales values for oil and gas products were supported through the first half of the year by rising demand outpacing additions to supply,” DMIRS observed.

“This was exacerbated by the Russia-Ukraine conflict and the issues it created for supplies.

“Gas supply concerns, particularly in Europe, flowed through to and supported higher prices in the Asia Pacific market (the main market for LNG from Western Australia) as importers of Russian gas sought alternative sources of supply.”

Mines and petroleum minister Bill Johnston said he was running out of superlatives to describe the string of strong results.

“Western Australia’s resources sector has delivered yet another exceptional performance,” he said.

“The strong interest in the search for critical minerals is encouraging as the McGowan Government is working hard to ensure WA plays a central role in decarbonising the world’s economies.”