WESTERN AUSTRALIAN MINERAL AND PETROLEUM STATISTICS DIGEST 2007–08 WESTERN AUSTRALIAN MINERAL AND PETROLEUM STATISTICS This publication is available on our website WESTERN AUSTRALIAN www.doir.wa.gov.au Mineral and Petroleum Head Office: Mineral House STATISTICS DIGEST 2007–08 100 Plain Street East Perth WA 6004 Telephone: +61 8 9222 3333 Facsimile: +61 8 9222 3568 Email: [email protected] For specific enquiries, please email: [email protected] DoIRAUG08_1745 Cover picture courtesy of Rio Tinto. Disclaimer Information provided in this Digest is made available without charge, as a public service, in good faith. The information provided is derived from sources believed to be reliable and accurate at the time of publication. However, use of the information in the Digest is at your own risk. The Digest is provided solely on the basis that users will be responsible for making their own assessment of the information provided therein and users are advised to verify all representations, statements and information for decisions that concern the conduct of business that involves monetary or operational consequences. Each user waives and releases the Department of Industry and Resources and the State of Western Australia and its servants to the full extent permitted by law from all and any claims relating to the use of the material in the Digest. In no event shall the Department of Industry and Resources or the State of Western Australia be liable for any incidental or consequential damages arising from any use or reliance on any material in the Digest. Copyright © 2008 Copyright in this document is reserved to the State of Western Australia. Reproduction except in accordance with copyright law is prohibited. CONTENTS FOREWORD 3 1. EXPLORATION AND INVESTMENT 4 1.1 PETROLEUM EXPLORATION 4 1.2 MINERALS EXPLORATION 4 1.3 INVESTMENT 5 2. MINERAL AND PETROLEUM Industry 2007–08 REVIEW 6 2.1 OVERVIEW 6 2.2 IRON ORE 12 2.3 PETROLEUM 18 2.4 NICKEL 24 2.5 ALUMINA 28 2.6 GOLD 30 2.7 BASE METALS 34 2.8 MINERAL SANDS 35 2.9 DIAMONDS 37 2.10 OTHER 38 3. ROYALTIES 42 TABLES 1. ROYALTY RECEIPTS 2006–07 and 2007–08 43 2. QUANTITY AND VALUE OF MINERALS AND PETROLEUM 44 3. VALUE OF MINERALS AND PETROLEUM BY REGION BY LGA 2007-08 46 4. VALUE OF MINERALS AND PETROLEUM BY REGION BY COMMODITY 2007-08 47 5. QUANTITY AND VALUE OF SELECTED MAJOR COMMODITIES 48 6. PRINCIPAL MINERAL AND PETROLEUM PRODUCERS 50 ABBREVIATIONS 55 UNITS AND CONVERSION FACTORS 55 DATA SOURCES 56 CLASSIFICATION OF COUNTRIES 56 MAPS 1. LOCAL GOVERNMENT BOUNDARIES 57 2. LOCAL GOVERNMENT BOUNDARIES 58 3. MAJOR MINERAL AND PETROLEUM PROJECTS IN WESTERN AUSTRALIA 59 1 WESTERN AUSTRALIAN MINERAL AND PETROLEUM STATISTICS DIGEST 2007–08 LIST OF FIGURES FIGURE 1 PETROLEUM EXPLORATION EXPENDITURE 5 FIGURE 26 LNG IMPORT PRICES 22 FIGURE 2 MINERAL EXPLORATION EXPENDITURE 5 FIGURE 27 AVERAGE NATURAL GAS PRICES 22 FIGURE 3 MINING INVESTMENT 5 FIGURE 28 AVERAGE LNG IMPORT PRICES 22 FIGURE 4 VALUE BY COMMODITY 2007–08 7 FIGURE 29 NATURAL GAS, CRUDE OIL AND CONDENSATE PRODUCTION 2007–08 23 FIGURE 5 MAJOR COMMODITIES BY VALUE 7 FIGURE 30 NICKEL PRICE A$/TONNE 25 FIGURE 6 EXCHANGE RATE US$/A$ 7 FIGURE 31 NICKEL QUANTITY AND VALUE BY QUARTER 25 FIGURE 7 EXCHANGE RATE TRADE WEIGHTED INDEX 7 FIGURE 32 HISTORIC NICKEL PRICES 25 FIGURE 8 WESTERN AUSTRALIAN MINERAL AND PETROLEUM EXPORTS 2007–08 8 FIGURE 33 NICKEL EXPORTS 25 FIGURE 9 WESTERN AUSTRALIAN MERCHANDISE FIGURE 34 NICKEL QUANTITY 26 EXPORTS 2007–08 8 FIGURE 35 ALUMINA QUANTITY BY VALUE BY QUARTER 28 FIGURE 10 AUSTRALIAN MERCHANDISE EXPORTS 2007–08 8 FIGURE 36 ALUMINA PRICE A$/TONNE 28 FIGURE 11 WESTERN AUSTRALIAN MERCHANDISE EXPORTS 2007–08 8 FIGURE 37 ALUMINA EXPORTS 28 FIGURE 12 AVERAGE PRICE COMPARISON 2006–07 FIGURE 38 ALUMINA QUANTITY 29 AND 2007–08 9 FIGURE 39 GOLD QUANTITY AND VALUE BY QUARTER 31 FIGURE 13 NON-RURAL COMMODITY PRICE INDEX 11 FIGURE 40 GOLD PRICE 31 FIGURE 14 AUSTRALIAN DOLLAR EXCHANGE RATE AGAINST MAJOR CURRENCIES 11 FIGURE 41 HISTORIC GOLD PRICE US$/A$ PER OUNCE 31 FIGURE 15 IRON ORE QUANTITY AND VALUE BY QUARTER 12 FIGURE 42 GOLD EXPORTS 32 FIGURE 16 IRON ORE EXPORTS 12 FIGURE 43 GOLD PRODUCTION 33 FIGURE 17 IRON ORE QUANTITY 14 FIGURE 44 HEAVY MINERAL SANDS VALUE BY QUARTER 35 FIGURE 18 IRON ORE PRICE A$/FE UNIT 17 FIGURE 45 HEAVY MINERAL SANDS EXPORTS 36 FIGURE 19 OPEC SHARE OF WORLD CRUDE OIL FIGURE 46 HEAVY MINERAL SANDS VALUE RESERVES (2007) 18 OF PRODUCTION 36 FIGURE 20 CRUDE OIL AND CONDENSATE QUANTITY FIGURE 47 SELECTED WA COMMODITIES RELATIVE AND VALUE BY QUARTER 19 TO WORLD PRODUCTION ENDING 2007 BY QUANTITY 40 FIGURE 21 TAPIS CRUDE OIL PRICE US$/BBL 19 FIGURE 48 ROYALTY RECEIPTS 2007–08 42 FIGURE 22 PETROLEUM EXPORTS 19 FIGURE 49 ROYALTY RECEIPTS BY COMMODITY 43 FIGURE 23 CRUDE OIL AND CONDENSATE EXPORTS 19 FIGURE 50 VALUE OF MINERALS AND PETROLEUM FIGURE 24 HISTORIC OIL PRICES 19 BY COMMODITY 45 FIGURE 25 CRUDE OIL AND CONDENSATE QUANTITY 21 FIGURE 51 VALUE OF MINERALS AND PETROLEUM BY REGION 2007–08 46 2 WESTERN AUSTRALIAN MINERAL AND PETROLEUM STATISTICS DIGEST 2007–08 FOREWORD Welcome to the Mineral and Petroleum 2007–08 Statistics Digest. This publication contains the most comprehensive statistical information available on the Western Australian minerals and petroleum industry. The statistics in this Digest show that in 2007–08 the State’s minerals and petroleum sector set a new record, rising by nine per cent to reach $58.6 billion. Overall, during the last decade, the sales value of Western Australia’s minerals and petroleum industry has grown at an annual average growth rate of twelve per cent. The record result in 2007–08 was driven by strong overseas demand for our resources and rising commodity prices. Despite the robust nature of the industry, the year produced many challenges and the impressive result was achieved against a background of a strong Australian dollar, adverse weather conditions, skills shortages, mining equipment supply constraints together with some shipping bottlenecks. The minerals and petroleum sector continues to remain the engine of the State’s economy, accounting for in excess of 30 per cent of Gross State Product and 83 per cent of its export income. Western Australia is one of the great mineral provinces of the world. It hosts an impressive 531 commercial mineral projects, embracing 1032 operating mine sites which produce over 50 different minerals. In 2007–08, there were also 62 operating oil and gas fields. To maintain Western Australia’s position as one of the world’s prominent players in international resource markets, it is important that the State continues to build on its existing advantages. This is particularly significant given the uncertain outlook for global economic growth. Readers of this Digest will therefore hopefully find the publication of particular use in analysing the State’s resources industry in a global context. It is not possible to prepare such a comprehensive range of information without assistance from outside this Department. I would like to thank the various resource companies, Australian Bureau of Agricultural and Resource Economics (ABARE), Australian Bureau of Statistics (ABS) and the Western Australian Treasury Department for their cooperation and help during the preparation of this Digest. Anne Nolan Director General Department of Industry and Resources 3 WESTERN AUSTRALIAN MINERAL AND PETROLEUM STATISTICS DIGEST 2007–08 1. EXPlorATION AND INVESTMENT 1.1 PETROLEUM EXPLORATION Therefore, most petroleum exploration, investment and development is taking place in offshore areas In 2007–08, total petroleum exploration expenditure in of the State, from which Western Australia receives Australia grew by 27 per cent to $3034.9 million. The no fiscal benefit with government revenues accruing majority of this expenditure, 84 per cent, was spent to the Commonwealth. Conversely, the majority of offshore. Western Australia’s onshore areas are under-explored and relatively untouched, despite the potential for huge Expenditure on petroleum exploration in resources to be found. Western Australia during the same period grew by nearly 47 per cent to $2174.9 million. This represented It is encouraging to see the recent renewed interest 72 per cent of the national total, an increase on in onshore exploration north of Perth and now in the 2005–06 when the share was 47 per cent. Listed below Canning Basin. This gives hope for new discoveries of is a breakdown of the various states and Northern oil and gas fields and further onshore development. Territory’s share of petroleum exploration expenditure for 2007–08: Further information on petroleum exploration activity • Western Australia 72% in Western Australia can be found in the Department of Industry and Resources’ publication “Petroleum • Northern Territory 9% in Western Australia”. This publication contains a • South Australia 6% comprehensive overview of petroleum exploration activities in this State together with details on the • Queensland 5% award of petroleum exploration permits. • Victoria 4% • Tasmania 3% 1.2 MINERALS EXPLORATION • New South Wales 1% Mineral exploration in Western Australia expanded significantly compared to 2006–07 by $421 million or The cornerstones of growth in the petroleum industry 50 per cent in 2007–08 to reach $1.26 billion. Of these are exploration and investment. The past year has seen funds, 57 per cent were spent on existing deposits a record number of new companies apply for petroleum with the remaining 43 per cent spent on new ground. exploration acreage in Western Australia. This new It should also be remembered that although the added exploration and potential investment reflects the spending is significant, the cost of exploration has growing interest in Western Australia as a destination increased considerably.