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The value of Western Australia’s mineral and petroleum sector in 2012 reached  $97 billion.  This achievement is the industry’s second highest, only surpassed in 2011 when the value was a record $108 billion. 

Considering the continuing strength of the Australian dollar, which has maintained an average exchange rate in excess of US$1 over the past two years and weakening commodity prices, this achievement is remarkable.  While traditionally perceived as a commodity currency, the Australian dollar did not decrease in line with falling commodity prices which normally would have helped to shield producers from lower prices.

Global economic conditions remained uncertain in 2012.  This resulted in significantly lower prices for almost all commodities in the minerals sector, with the notable exceptions of gold and mineral sands.

The iron ore sector increased output by 12 per cent however it was not enough to counter lower prices resulting in a drop of $11.7 billion in sales from the 2011 period. 

Iron ore and gold together accounted for $60.4 billion (or 83 per cent) of all mineral sales in 2012. 

Iron ore remained the State’s highest value commodity, accounting for $51 billion (or 70 per cent) of total mineral sales in 2012.  With strong demand, led by China, the sector achieved record levels of export quantities which resulted in 476 million tonnes exported, an increase of 12 per cent over the previous calendar year.  Lower prices, however, resulted in a fall in total sales of 19 per cent.

The gold price continued its upwards momentum in 2012, resulting in total sales of $9.4 billion. This represented an increase of six per cent over the previous calendar year.  Output remained static at 5.8 million ounces.
 
The petroleum sector, which includes crude oil, condensate, LNG, natural gas and LPG (butane and propane) was valued at a record $24.4 billion, marginally rising by one per cent in comparison to the 2011 calendar year.  Most of this increase came from LNG which was boosted by the Pluto field coming on-stream during 2012.

Notwithstanding continued global economic uncertainty, investment activity in Western Australia remained strong during 2012, with the State’s mining industry investing $51 billion, a 45 per cent increase compared to 2011.

Western Australia remained the nation’s leading mining investment destination, attracting 54 per cent of total national mining capital spending valued at $95 billion.  Fuelled by strong demand for resource commodities from Asia, new capital expenditure by the State’s mining industry has grown at an annual rate of 27 per cent during the five years to 2012.

Mineral and petroleum exports comprised 87 per cent of the State’s total merchandise exports of $114 billion, representing by far the major contributor to Western Australia’s 46 per cent share of the nation’s total merchandise exports of $248 billion. 

This dominance is expected to continue given the large number of resource projects, particularly in relation to the iron ore and LNG industries.  While the recent falls in commodity prices have caused some mining companies to re-evaluate their investment positions, a review in March–April 2013 showed Western Australia still has an estimated $177 billion worth of resource projects under construction or in the committed stage of development.  A further $120 billion has been identified as planned or possible projects in coming years.

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Iron ore remains the State's most valuable sector of the mining industry, accounting for $51 billion (70 per cent) of the mineral sector’s total sales. Continuing strong demand for iron ore saw the quantity sold in 2012 increased by 12 per cent however this was not enough to offset lower prices and a high Australian dollar which saw total sales fall by 19 per cent.

Petroleum, which includes crude oil, condensate, LNG, natural gas and LPG (butane and propane), is the second most valuable sector and was valued at a record $24.4 billion in total.  This represented a slight increase of one per cent on the previous year.  The majority of this increase was due to the Pluto field coming on-stream midway through 2012. 

LNG was the most valuable petroleum product in the State in 2012. 
Output increased by 14 per cent to a record 18.3 million tonnes with the value of LNG sales rising to $11.3 billion, up 21 per cent compared to the previous calendar year.  LNG remains second only to iron ore in value to the State.

Sales of crude oil, the second most valuable petroleum product in 2012, fell by 17 per cent to 63 million barrels, with the total value falling by 16 per cent to $7.1 billion.  Crude oil output is continuing its downward trend due to maturing fields. 

The value of condensate decreased by six per cent to $3.9 billion and output fell by five per cent to 38 million barrels.

In 2012 domestic natural gas sales increased by a modest two per cent to 9 billion cubic metres whilst the value of sales rose by three per cent to $1.5 billion.  Output of LPG (butane and propane) fell by six per cent and the sales value also fell to $729 million, which was down two per cent on the previous calendar year.

Gold was the second most valuable mineral sector, with total sales of $9.4 billion, representing 13 per cent of the total mineral sales.  The gold price continued its upwards momentum in 2012, resulting in an increase of six per cent in the sales value over the previous calendar year.  The quantity sold remaining static at 5.8 million ounces in 2012. 

Nickel and alumina maintained their long-held positions as the State’s third and fourth most valuable sectors. While prices for both commodities were negatively impacted this calendar year, it was most keenly felt by nickel.  Although the quantity of nickel sales increased by 22 per cent, the total value decreased by four per cent, from $4 billion in 2011 to $3.8 billion this calendar year.  In comparison, the total value of alumina decreased by 12 per cent to $3.6 billion on a four per cent increase in quantity sold.

The overall value of base metals (copper, lead and zinc) increased by three per cent to $1.4 billion in 2012.  Copper represented by far the most significant base metal with total sales of $1.3 billion.  This amounted to an increase of eight per cent on the previous calendar year despite the quantity of sales increasing by 21 per cent to 179 thousand tonnes.  Lead output improved by four per cent however weak prices resulted in sales of $16 million dollars, a drop of 21 per cent in comparison to 2011.  Zinc production levels fell by 23 per cent, with the total value of sales falling 32 per cent from $153 million in 2011 to $104 million.

The total value of mineral sands sales increased significantly by 59 per cent to $951 million. Sales revenues benefited from escalating prices for rutile, ilmenite and zircon which have rebounded strongly since the global financial crisis and have compensated for the general decline in volumes. 

In 2012, the value of salt sales rose by 24 per cent to $417 million while volumes increased by two per cent to 12.5 million tonnes.

While diamond sales volumes rebounded by 29 per cent to almost ten million carats, average prices saw total sales increase by only 19 per cent to $346 million in comparison to the previous calendar year. 

Coal production was up by seven per cent to 7.5 million tonnes, resulting in an increase in sales value of 11 per cent to $315 million.
 
Output for cobalt, as a by-product of nickel mining increased by 53 per cent.  However, weaker prices resulted in only a 22 per cent increase to $156 million for the period.

Western Australia’s mineral and petroleum resources, in order of value for 2012, were:
 

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