Mining in Western Australia
Mining in Western Australia, together with the petroleum industry in the state, accounted for 94% of the State's and 41% of Australia's income from total merchandise exports in 2018–19. The state of Western Australia hosted 127 principal mining projects and hundreds of smaller quarries and mines. The principal projects produced more than 99 per cent of the industry's total sales value.
Western Australia's mineral and petroleum industry, in 2018–19, had a value of $145 billion, of which $107 billion was created by the mining industry, up $19 billion from 2017–18. The value of the mineral and petroleum industry in 2005–06 was $43 billion.
Iron ore was, in 2018–19, the most important commodity in Western Australia, accounting for 54 percent of sales in the state's mineral and petroleum industry. The petroleum sector, consisting of oil and gas, followed in second place with 26 percent of the overall value. The third most important commodity in the state was gold, with 8 percent of the overall value. Alumina, nickel, base metals, and lithium followed in the order of importance, each achieving a value in excess of A$1 billion. Other major commodities included mineral sands, diamonds, rare earth metals, cobalt, coal and salt.
Employment in the Western Australian mining and petroleum industry has sharply increased from 75,000 in 2009, directly employing an average of 128,352 people during 2018–19.
The industry's regulating authority in Western Australia is the Department of Mines, Industry Regulation and Safety, renamed from the Department of Mines and Petroleum on 1 July 2017, which in turn replaced the Department of Industry and Resources on 1 January 2009. The department also produces the annual Western Australian Mineral and Petroleum Statistic Digest and operates the MINDEX website, which is aimed at listing all current and former mining operations in the state.
History
Mining transformed the Western Australian economy. Gold finds in the 1890s brought unprecedented numbers of people and amounts of capital to WA.Gold mining declined after 1904, and Western Australia went through a painful period of structural adjustment over the course of the following three decades during which time two world wars, an international depression and a major drought complicated the state's economic development. Mining began to take off again in the 1930s, however at the time the state governments' focus was in agricultural expansion and manufacturing initiatives. The primary sector would experience strong growth until the early 1970s, after which it leveled off. More than a million hectares of marginal agricultural land was abandoned, and the government turned to mining as the state's main economic priority.
The period after 1945 has been characterised by the development of the State's mining sector into a world-scale industry and Western Australia's increasing access to the rest of the world. Communication and transport advances brought Western Australia much closer to the rest of the world, providing opportunities for local producers to access markets in other countries much more easily. On the other hand, overseas producers could access the Western Australian market relatively more readily. The outcome has been a highly specialised and trade-dependent Western Australian economy, using income derived to import many other goods and services.
The State's second major resource boom was stimulated when, in 1960, the Commonwealth Government lifted the iron ore export embargo that had been in place since 1938. Demand was fuelled by the buoyant Japanese economy and Japanese, American and British investment flowed into the State. While Asia had previously been a market for Western Australian products, the export of iron ore to Japan marked a fundamental shift in Western Australia's trade dynamic and paved the way for the development of Asia as the State's most important trading region.
Prior to the resurgence of the resource sector, economic conditions had been relatively subdued, with constant-price household income per capita roughly the same in 1960–61 as in 1948–49. However, the mining boom caused income per capita to more than double by 1973–74. Importantly, while iron ore was a significant component of the mining industry, one important aspect of the resources boom in the 1960s that set it apart from the gold rush, was the diversity of commodities being mined. There were major discoveries of nickel, petroleum, bauxite and alumina, which all developed into significant industries in the 1960s and 1970s. There was also a major revival in the mining of gold in the 1980s, stimulated by price increases associated with the end of the gold standard in 1971, high inflation throughout the 1970s and new processing technology.
Timeline
- 1848: Lead ore was found by explorer James Perry Walcott, a member of A.C. Gregory's party, near Northampton
- 1863: Lead and copper ores represent 14% of the colony's total annual exports, exceeded only by wool and sandalwood
- 1877: Copper and lead ores are the colony's second largest export, still at 14% of the total, after wool
- 1885: The colony's first gold rush at Halls Creek in the Kimberley district
- 1887: The Yilgarn gold rush around Southern Cross
- 1892: Arthur Bailey and William Ford discover gold at Fly Flat near Coolgardie
- 17 June 1893: Paddy Hannan discovers gold near Kalgoorlie, sparking Western Australia's gold rush
- 1899: Sir John Forrest, the first Premier of Western Australia, saw the importance of gold in the development of Western Australia's economy, and successfully lobbied the British Government to establish a branch of the Royal Mint in Perth
- 1934: A lease was assigned over iron ore deposits at Koolan Island in Yampi Sound off the coast of the Kimberley to the Nippon Mining Company backed by the Japanese government.
- 1935–39: High gold prices encourage investment
- 1937: Public and government outcry when Nippon Mining proposed not to use Australian labour but to send its own engineers to construct the Koolan Island mine.
- 1939–45: Labour shortages as a result of the Second World War caused many mines to cease operation, and following the war, many did not re-open.
- 1938: Commonwealth government enacts iron ore export embargo The stated reason for the embargo was doubt as to the adequacy of Australian iron ore resources for Australia's own needs.
- 1940: Extensive survey of iron ore deposits determined only two were commercially viable, one being the Yampi Sound Group.
- 1948: Bureau of Mineral Resources combined with the WA Department of Mines to carry out systematic geological and geophysical surveys in the North West, mostly seeking oil.
- 1960: Commonwealth Government lifts iron ore export embargo
- 1964: Oil discovered on Barrow Island.
- 1967: Oil production on Barrow Island begins.
- 1969–1970: Poseidon nickel boom
- 1977: Premier Sir Charles Court agreed with Alcoa Australia to take a designated quota of the gas in return for permission to build a third alumina refinery at Wagerup.
- 1981: The Western Australian Government negotiated an agreement to allow development of the large natural gas reserves on the North West Shelf.
- 1987: Global stock market crash
- 1989: First liquefied natural gas cargo exported to Japan in 1989.
- 2008: Global financial crisis - the mining industry placed Australia in a strong economic and fiscal position ahead of the crisis, and helped accelerate the post-crisis recovery
- August 2009: Gorgon Consortium signs $50 billion contract with PetroChina for gas extraction from the fields around Barrow Island.
Major commodities
Iron ore
mining in Western Australia, in the financial year 2018–19, accounted for 54 percent of the total value of the state's resources exports, with a value of A$78.2 billion. The overall value of the mineral and petroleum industry in Western Australia was A$145 billion in 2018–19.Production of iron ore in Western Australia in 2018–99 was 794 million tonnes, down on the previous year's 839 million tonnes of ore, however due to improved iron ore prices, sales of $78.2 billion were up 26 per cent on the previous year, setting a new record for iron ore sales values. The bulk of Western Australian ore went to China, which imported 82 percent of the 2018–19 production, followed by Japan with 7.9 percent.
In the calendar year 2019, the Western Australian Government received A$4.9 billion in royalties from the iron ore mining industry in the state, 288% more than a decade ago in 2009.
Iron ore mining in Western Australia is predominantly, but not exclusively, carried out in the Pilbara region, which produced ore in value of A$76.8 billion in 2018–19, 98 percent of the total for the state.
Petroleum
Petroleum production was valued at valued at $38.4 billion in 2018–19, an increase of 45 per cent from $26.5 billion in 2017–18.LNG was the state's most valuable petroleum product, accounting for 20 per cent of all mineral and petroleum sales in 2018–19. Sales reached a record 37.9 millon tonnes, with values rising from A$18.9 billion in 2017–18 to A$29 billion in 2018–19. In 2018–19 crude oil production was down 34 per cent to 3.2 gigalitres, while condensate increased 60 per cent to 11.4 gigalitres over the previous year.
Gold
The history of gold mining in Western Australia dates back to the 1880s but took on some larger dimensions in the 1890s, after gold discoveries at Coolgardie in 1892 and Kalgoorlie in 1893. It reached an early peak in 1903, experienced a golden era in the 1930s and a revival in the mid-1980s. In between, the industry declined a number of times, particularly during the two world wars, experiencing an absolute low point in 1976.In 2018-2019, gold production in the state was steady on the previous year, at 6.8 million ounces, 6.4% of world production, although an improving gold price delivered a 4.6 per cent increase in value, from $11.4 billion in 2017–18, to a record annual value of $11.9 billion.
Alumina
Western Australia accounts for 67 per cent of Australia’s alumina production. The Darling Range in the state's southwest contains considerable deposits of bauxite, which are mined by Alcoa and Worsley Alumina for the production of alumina.Alcoa's first bauxite mine at Jarrahdale was opened in 1963 to service the Kwinana alumina refinery. 168 million tonnes of bauxite was mined from Jarrahdale until its closure in 1998. The Huntly mine was established in the early 1970s to supply bauxite for both the Kwinana and Pinjarra refineries. Willowdale mine was established in 1984, near Waroona. It supplies bauxite ore to the Wagerup Alumina Refinery.
Worsley Alumina constructed a bauxite mine site and refinery in the early 1980s, with the mine located near Boddington. The bauxite is transported by a 51 km conveyor belt to the refinery at Worsley. Following an A$1 billion expansion in 2000, Worsley now export 4.4 million tonnes of alumina.
Production of alumina and bauxite was a record 15.4 million tonnes in 2018–19. The value of the alumina and bauxite sector increased 25 per cent from $6.6 billion in 2017–18 to $8.3 billion in 2018–19. The state's largest export markets for alumina are United Arab Emirates, Bahrain, South Africa and Mozambique.
Nickel
The Western Australian nickel industry suffered from falling international prices in 2009. Nickel production had been reasonably steady, the value of the industry had decreased from a peak A$6.9 billion in 2007 to under 3.3 billion in 2009. Also, the number of employees fell from a peak 13,307 in 2008 to 7,561 in 2009.A large number of nickel mines in the state were placed in care and maintenance at the end of 2008 because of falling international prices.
The discovery in Kambalda, Western Australia in 1966, Mount Windarra in 1969 and Agnew in 1971 coinciding with rising world nickel prices and a prolonged strike at a major nickel in Canada, meant that the discoveries were rapidly developed, bringing about a "nickel boom" between 1967 and 1971.
Base metals
The value of base metals production in the state declined by 12 percent in 2009. The largest base metals producing mine in Western Australia is the Golden Grove Mine near Yalgoo.Copper
Western Australian output of copper increased by ten percent in 2009, having grown from just over 34,000 tonnes per annum in 2000 to 142,490 tonnes by 2009, with a brief dip in production in 2004 due to the closure of the Lennard Shelf mine. In 2009 however, world copper prices fell by 26 percent, causing the industry in the state to lose 11 percent of its value.Lead
Lead mining in Western Australia experienced a boom in 2009, almost doubling its production. This was caused by the reopening of the Magellan mine, ner Wiluna. Overall, the state's lead production in the last 20 years has been varied, reaching a peak of 91,380 tonnes in 2001, falling to 1,170 tonnes in 2004 because of the closure of the Lennard Shelf mine, before reaching another peak in 2006 and a low in 2008.Zinc
Zinc experienced a drop in production and prices in 2009, output in Western Australia falling by 33 percent and the value of the industry decreasing by 35 percent. Because of the close association in nature of zinc and lead ores, zinc has experienced the same variations in production as lead in recent decades.Coal
Coal in Western Australia is currently, as of 2019, mined at Collie, where two mines are operating. Ninety percent of all coal mined at Collie is used in power stations, the remainder in the mineral sands production. While a small amount of Western Australian coal has been exported to India and China in recent years, the majority goes to the coal-fired power stations, mainly located in the Collie area.Coal production in the state has been quite steady in the past decade, with the 2019 production of 6.3 million tonnes being only four percent less than in 2009. Like production, the value of the Western Australian coal industry has remained reasonably constant, too, with a slight increase in sales to A$319 million in 2019.
Diamonds
The bulk of diamonds produced in Western Australia originate from the Argyle diamond mine, located in the far north of the state. The mine produces around 20 percent of the global diamond output and commenced mining in 1985. The mine's most famous product is its pink diamonds, of which it produces around 90 percent of the world's supply, which is, however, only one percent of the mine's overall production. Apart from Argyle, there is only one other operating diamond mine in the state, the Ellendale mine, located 100 km east of Derby, which opened in 2002. Ellendale produces the rare yellow diamonds.In 2009, sale volumes for diamonds fell by 44 percent while the value of the industry in the state decreased by 53 percent in comparison to 2008.
Salt
Eighty percent of all salt produced in Australia comes from Western Australia. Of the state's production, 77 percent originates from Dampier Salt Limited's operations at Dampier, Port Hedland and Lake MacLeod in the Pilbara. Other mining locations in the state include Onslow, Koolyanobbing and Esperance.While the overall salt production in Western Australia dropped by 19 percent in 2009, to 9.5 million tonnes, the value of the industry increased dramatically, by 59 percent, to A$432 million.
Uranium
No uranium mining currently takes place in the state and no developing projects are scheduled to enter the mining phase before 2020.Five projects are in the approval process, the Lake Maitland uranium project, Toro Energy's Lake Way uranium project, Cameco's Yeelirrie uranium project and Kintyre uranium project, and Vimy Resources' Mulga Rocks uranium project. Given the low uranium price none of these projects are progressing to production in the short term. Lake Way, Lake Maitland and Yeelirrie are located within 100 km of Wiluna.
Safety
In the past decade, from 2001 to 2010, 42 employees have lost their lives in the state's mining industry. Of those, gold and iron ore have been the most dangerous, with 14 fatalities each, followed by nickel, with nine. Of the 42 fatalities, 29 have occurred at the surface and 13 in underground mining.Since 1943, the year the Department of Mines records date back to, to 2010, 657 work-related fatalities have occurred in the mining industry in the state.
Statistics
Annual statistics for the Western Australian mining industry:Production
Commodities measured in million tonnes per annum:| Commodity | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Iron ore | 158.87 | 162.25 | 171.77 | 194.75 | 215.85 | 244.64 | 250.40 | 264.45 | 305.72 | 341.64 | |
| Alumina | 10.0 | 10.75 | 11.0 | 11.23 | 10.99 | 11.35 | 11.87 | 12.17 | 12.25 | 12.42 | |
| Salt | 7.71 | 8.58 | 9.17 | 9.75 | 10.4 | 11.48 | 10.72 | 10.39 | 11.49 | 9.55 | |
| Coal | 6.2 | 6.2 | 6.26 | 6.03 | 6.31 | 6.41 | 7.25 | 5.81 | 6.73 | 6.56 |
Commodities measured in tonnes per annum:
| Commodity | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Nickel | 153,510 | 181,170 | 183,000 | 190,210 | 174,700 | 191,710 | 175,180 | 161,010 | 187,790 | 171,970 | |
| Copper | 34,040 | 50,240 | 64,290 | 58,780 | 42,680 | 83,880 | 99,960 | 119,410 | 129,530 | 142,490 | |
| Zinc | 257,720 | 210,840 | 218,800 | 174,550 | 51,780 | 63,610 | 138,840 | 180,730 | 156,010 | 104,690 | |
| Lead | 73,080 | 91,380 | 70,400 | 56,490 | 1,170 | 30,270 | 74,850 | 42,020 | 13,780 | 26,700 | |
| Cobalt | 3,590 | 4,260 | 4,700 | 5,170 | 4,550 | 4,590 | 5,130 | 4,730 | 4,780 | 4,629 |
Commodities measured in million carats per annum:
| Commodity | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Diamonds | 42.3 | 21.68 | 34.37 | 35.48 | 24.23 | 34.31 | 17.07 | 23.54 | 21.24 | 11.9 |
Commodities measured in kilogram per annum:
| Commodity | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Gold | 199,500 | 192,200 | 188,860 | 187,500 | 164,420 | 169,830 | 163,840 | 152,690 | 131,824 | 142,519 |
Value
Commodities at an annual production value of A$ billion:| Commodity | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Iron ore | 4.365 | 5.245 | 5.064 | 5.061 | 6.173 | 11.308 | 14.751 | 16.165 | 31.896 | 28.085 | |
| Gold | 3.08 | 3.24 | 3.46 | 3.37 | 2.94 | 3.15 | 4.24 | 4.07 | 4.39 | 5.66 | |
| Alumina | 3.188 | 3.767 | 3.339 | 3.14 | 3.179 | 3.656 | 4.767 | 4.704 | 4.901 | 3.594 | |
| Nickel | 2.243 | 2.075 | 2.243 | 2.68 | 3.261 | 3.484 | 5.844 | 6.958 | 4.059 | 3.281 |
Commodities at an annual production value of A$ million:
| Commodity | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Copper | 82.61 | 120.71 | 145.49 | 145.09 | 160.94 | 434.71 | 917.78 | 1,018.75 | 1,041.6 | 923.58 | |
| Mineral Sands | 862.93 | 909.22 | 855.87 | 760.75 | 749.08 | 880.37 | 883.67 | 780.28 | 797.89 | 620.61 | |
| Salt | 197.32 | 249.24 | 250.53 | 197.01 | 185.08 | 213.78 | 241.64 | 229.6 | 276.72 | 432.44 | |
| Coal | 257.84 | 258.21 | 266.4 | 266.41 | 281.91 | 283.26 | 317.9 | 265.15 | 305.5 | 308.16 | |
| Diamonds | 713.68 | 499.53 | 650.34 | 661.86 | 414.81 | 740.1 | 446.9 | 555.0 | 490.71 | 230.0 | |
| Zinc | 290.11 | 208.72 | 173.06 | 139.73 | 57.78 | 118.91 | 607.12 | 695.54 | 329.13 | 213.47 | |
| Cobalt | 157.66 | 146.27 | 118.95 | 145.04 | 262.18 | 166.95 | 220.43 | 343.08 | 378.71 | 178.9 | |
| Lead | 25.76 | 44.90 | 32.69 | 24.32 | 0.31 | 41.17 | 130.61 | 115.57 | 32.61 | 44.33 |
Employees
Employment figures for the major commodities and overall figures for the complete mining industry:| Commodity | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
| Iron ore | 8,604 | 9,103 | 9,289 | 11,184 | 12,585 | 13,727 | 16,203 | 18,387 | 23,185 | 26,051 | |
| Gold | 10,879 | 11,938 | 12,653 | 12,801 | 13,398 | 12,121 | 12,314 | 13,733 | 14,459 | 16,686 | |
| Alumina | 6,706 | 6,569 | 6,633 | 7,015 | 7,613 | 9,711 | 8,967 | 8,559 | 8,201 | 8,212 | |
| Nickel | 5,038 | 5,160 | 4,699 | 5,714 | 6,704 | 9,423 | 10,583 | 12,736 | 13,307 | 7,561 | |
| Mineral Sands | 2,243 | 2,338 | 2,170 | 2,224 | 2,435 | 2,789 | 2,914 | 2,840 | 2,670 | 1,934 | |
| Diamonds | 940 | 1,009 | 1,101 | 1,094 | 1,397 | 1,479 | 1,614 | 1,863 | 2,218 | 1,602 | |
| Base Metals | 1,331 | 1,301 | 1,295 | 1,100 | 888 | 670 | 912 | 2,241 | 2,242 | 1,456 | |
| Salt | 698 | 699 | 648 | 658 | 679 | 853 | 838 | 865 | 867 | 778 | |
| Coal | 709 | 677 | 649 | 641 | 651 | 716 | 771 | 808 | 897 | 725 | |
| Overall | 39,028 | 40,870 | 41,288 | 44,392 | 48,385 | 53,598 | 57,053 | 64,608 | 71,225 | 70,063 |
Official reports
- Recent official Department of Mines and Petroleum reports:
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