Government of Western Australia Department of Mines, Industry Regulation and Safety WESTERN AUSTRALIAN MINERAL AND PETROLEUM STATISTICS DIGEST 2018-19 years 125 OF PUBLISHING RESOURCE INDUSTRY STATISTICS FOR WA 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. 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Government of Western Australia Department of Mines, Industry Regulation and Safety CONTENTS Foreword ____________________________________________________________________________________________________ 3 Overview ____________________________________________________________________________________________________ 4 Availability of detailed resource data _________________________________________________________________________ 6 1 INDUSTRY ACTIVITY_______________________________________________________________________________________________________________________________________________________________________________________________________________ 7 1.1 Principal resource projects ____________________________________________________________________________ 7 1.2 Export activity _________________________________________________________________________________________ 7 1.3 Employment __________________________________________________________________________________________ 8 1.3.1 Mining __________________________________________________________________________________________ 9 1.3.2 Employment at State regulated petroleum projects ______________________________________________ 10 1.4 Royalties _____________________________________________________________________________________________ 10 1.5 Investment activity ____________________________________________________________________________________ 12 1.5.1 Mining investment and new capital expenditure _________________________________________________ 12 1.5.2 Resource project investment pipeline ____________________________________________________________ 13 1.6 Exploration ___________________________________________________________________________________________ 14 1.6.1 Minerals exploration ____________________________________________________________________________ 14 1.6.2 Petroleum exploration __________________________________________________________________________ 16 1.7 Tenement activity _____________________________________________________________________________________ 16 2 COMMODITY REVIEW ___________________________________________________________________________________________________________________________________________________________________________________________________________ 18 2.1 Iron ore _______________________________________________________________________________________________ 18 2.2 Petroleum ____________________________________________________________________________________________ 22 2.2.1 Liquefied natural gas (LNG) _____________________________________________________________________ 23 2.2.2 Crude oil and Condensate _______________________________________________________________________ 24 2.2.3 Natural Gas _____________________________________________________________________________________ 26 2.3 Gold __________________________________________________________________________________________________ 28 2.4 Alumina and bauxite ___________________________________________________________________________________ 31 2.5 Nickel ________________________________________________________________________________________________ 33 2.6 Base metals __________________________________________________________________________________________ 35 2.7 Lithium _______________________________________________________________________________________________ 36 2.8 Other _________________________________________________________________________________________________ 39 2.8.1 Coal ____________________________________________________________________________________________ 40 2.8.2 Mineral sands __________________________________________________________________________________ 40 2.8.3 Salt _____________________________________________________________________________________________ 41 2.8.4 Diamonds ______________________________________________________________________________________ 42 2.8.5 Manganese ____________________________________________________________________________________ 42 2.8.6 Rare earth elements ____________________________________________________________________________ 43 3 SUPPLEMENTARY INFORMATION ______________________________________________________________________________________________________________________________________________________________________________ 45 1 2 FOREWORD It is with great pleasure that I introduce this year’s Mineral and Petroleum Statistics Digest. This year marks 125 years of publishing resource industry statistics for Western Australia. Through its many forms, the Department has published information ranging from the amount of gold exports from the Customs House way back in 1894, to the amount of meters drilled across the State, to the value of investment expected in a given period. The mineral and petroleum industry is crucial to Western Australians, with the materials mined here used in our buildings, cosmetics and medicines as well as in the technology and infrastructure we need for our future. The industry’s opportunities, challenges, investments and needs are inseparable from WA’s future and so its performance and contributions to our economy are highly valued. Globally, commodity drivers for 2018–19 were much the same as the twelve months prior with US–China trade discussions, Chinese stimulus policies and US fiscal policies influencing prices. Another factor to be shaping global commodity markets is the slowing supply growth rates over the last five years which, when combined with major supply shocks affecting iron ore, copper and alumina markets, has created upwards pressure on prices for these commodities. Perhaps the biggest supply shock seen in recent years has been the failure of Vale’s dam in Brazil which is estimated to have added US$10–15 per tonne to the iron ore price alone. As iron ore is WA’s biggest mineral commodity, this has had a very positive flow on effects for the State’s industry and the economy more broadly. But while the financial year results have delivered another record performance, we can expect global commodity markets to moderate over the coming years. David Smith Director General Department of Mines, Industry Regulation and Safety 3 0.85 OVERVIEW 0.80 0.75 Commodity markets were on a roller-coaster ride for much of 2018–19 as US–China trade tensions entered their third year. The end of 2018 was US$: 1A$ 0.70 marked by political tensions which played a part in weakening commodity prices before their recovery 0.65 in the first quarter of 2019. The recovery followed the resumption of trade negotiations and a series of supply shocks to some commodities, including the 0.60 Vale dam accident in Brazil (iron ore, nickel); heavy Jun-17 Jun-18 Jun-19 Mar-18 Mar-19 Dec-17 Dec-18 floods in Chile (copper); protests in Peru (copper); Sep-17 Sep-18 smelter restrictions in response to environmental Figure 2 Monthly average exchange rate concerns in China (lead, zinc); and export restrictions Source: Reserve Bank of Australia in Indonesia (tin). Locally, the Australian dollar was down almost Geological Survey (USGS) data, WA ranked among the eight per cent from an average of 77 US cents in top five countries for the production of eight different 2017–18 to 72 US cents in 2018–19. Generally, global major minerals and in the top 10 of a further three. commodity prices held up well with the financial year average price of most commodities increasing on the Overall in 2018–19, WA’s mineral and petroleum gains made in 2017–18. Iron ore rebounded strongly industry reported record sales of $145 billion. The bulk on the back of the losses it recorded in the previous of the $30 billion increase on 2017–18 was the result of financial year. improved iron ore prices and increasing LNG volumes and prices. Following these changes, Western Australia remains one of the world’s top contributors to the global Mineral sector highlights commodity market. According to United States Mineral commodities