Article by Josh Zimmerman courtesy of the West Australian.
Booming demand for lithium and LNG has powered WA’s resources sector to a record result, with total sales soaring to $254 billion in 2022-23.
While iron ore remains the bedrock of the State’s commodity trade — accounting for just under half of total exports — the rapid emergence of lithium has vaulted the key battery-making ingredient over gold to cement itself as WA’s second most valuable mineral.
Sales of lithium spodumene concentrate soared to $21b in the past financial year — a more than 20-fold increase on the $820 million in revenue generated in 2020.
Going back a decade to 2013, lithium sales from WA operations were just $170 million.
The value of LNG exports also surged to a record $56b — almost $18b higher than in 2021-22.
Sanctions placed on Russian oil and gas in the wake of Vladimir Putin’s invasion of Ukraine in February 2022 have spurred demand for Australian LNG, helping to keep prices elevated in the 18 months since. While gold has fallen to third on WA’s mineral pecking order, the precious metal still enjoyed a record year for sales which hit $18.6 billion.
Iron ore contributed $125b in sales off the back of record production of 861 million tonnes.
More than 126,000 West Australians were employed full-time in the resources sector in the past year — also a record result, and the sixth consecutive year of employment growth in the mining industry.
Premier Roger Cook said trade in resources continued to underpin WA’s economic strength.
“Every Western Australian can be proud of the success of our resources sector, and the massive contribution it makes to the national economy,” he said.
“As the world moves to a low-carbon future, we’re positioning WA as a renewable energy powerhouse — and our record lithium sales show we’re on the right track.”
Investment in WA mining and petroleum projects has also bounced back strongly, reaching $27b in 2022-23 — the best result since the tail end of the last mining construction boom in 2016-16. Some $2.5b was also spent on mineral exploration, with gold, iron ore and critical minerals the most common targets.
Mines and Petroleum Minister Bill Johnston said the return of investors demonstrated confidence in WA as a “stable, reliable and forward-looking business partner”.
“The future looks promising too (as) our world-class resources sector has an estimated $55 billion worth of projects under construction or committed in WA,” he said.
Iron ore and lithium are both big royalties spinners for the WA Government, with the impressive 2022-23 result helping the State post a $5.1b operating surplus last financial year.
Typically conservative iron ore price forecasts for 2023-24 mean there is also considerable “upside risk” baked into next year’s Budget, with yet another big windfall appearing likely.
WA Treasury has assumed that iron ore will average $US74.10 across 2023-24 but nearly five months into the financial year the actual figure has been closer to $US113.