Mineral and petroleum industry activity review 2022
Western Australia’s mining industry employed an average of 117,970 operational employees in full-time equivalent (FTE) terms during 2021-22. This was another record for a calendar or financial year.
The major contributors to mining employment continued to be the iron ore (59,724 FTEs), gold (30,651 FTEs), nickel (7,922 FTEs), alumina and bauxite (6,733 FTEs), and lithium (3,361 FTEs) industries.
The numbers of people on mining operations was up year-on-year for most minerals, with the notable exception being iron ore (down 764 FTEs) following the completion of construction on the South Flank project, and diamonds (down 180 FTEs) following the end of production at Argyle.
Employment on minerals exploration operations was its highest level on record at 4,661 FTEs.
These overall results reflected ongoing strong levels of mining, construction, and exploration activity in the State.
 FTE is the average full-time equivalents. It is based on the numbers of hours worked with an FTE considered to be 2,000 hours worked in a year, 500 hours worked in a quarter, and 166.7 hours worked in a month. Changes in reporting requirements under the Work Health and Safety Act 2021 mean the latest data currently available is for the 2021-22 financial year. The Number of Individuals data previously reported is not available due to reliability and reporting issues. It will not be published until these matters are resolved.
However, growth in mining employment did show signs of slowing down with the average FTEs in the June quarter 2022 lower than the average in the June quarter 2021. This represents the first decline between June quarters since the tail end of the mining investment boom in 2016-17. It was due to a fall in employment on iron ore operations following the completion of construction on South Flank. Mineral exploration employment also declined between June quarters for the first time since 2015-16.
Employment in the State’s petroleum operations rebounded in 2022 to an average of 12,661 persons, up from 11,363 in 2021. However, it still remained below the record levels of 2018.
 Petroleum employment data represents the numbers of persons employed in WA in the 'Oil and Gas Extraction' class of the Australian and New Zealand Standard Industrial Classification or ANZSIC as published by the Australian Bureau of Statistics. It includes onshore, coastal waters, and offshore areas and persons mainly engaged in producing crude oil, natural gas or condensate through the extraction of oil and gas deposits, including LNG facilities. It does not include employees engaged in natural gas and petroleum exploration as there is insufficient data available for this to be reported or included in the figures. This data replaces petroleum employment data previously published by DMIRS which included only onshore and coastal waters facilities and pipelines previously covered under the Petroleum Pipelines Act 1969, Petroleum (Submerged Lands) Act 1982, and Petroleum and Geothermal Energy Resources Act 1967. This data was discontinued in March 2022 as it is not required to be reported under the Work Health and Safety Act 2021. Importantly, the new data set should not be combined with the mining and mineral exploration employment data reported above due to differences in methodologies and classifications, and is not directly comparable with the petroleum employment data previously published by DMIRS.
Almost $26 billion was invested in Western Australia’s mining and petroleum sector in 2022. While this was the highest level of investment for a single calendar or financial year since 2016, it remained at only half the level observed during the investment boom between 2011 and 2015.
The level of mining and petroleum investment in Western Australia has now increased for the last 14 quarters after adjusting for seasonal variability.
This result continues to be largely driven by production sustaining projects across the iron ore industry, a ramp-up in work on Scarborough LNG and Pluto Train 2, as well as the Iron Bridge magnetite project. It also likely reflects the impacts of cost inflation.
Western Australia’s share of national mining and petroleum investment was 59 per cent due to higher levels of investment growth in Western Australia compared to the rest of the country. The State’s share was slightly above its 10 year average of 56 per cent.
The resources sector was a key contributor (72 per cent) to growth in total new capital expenditure in Western Australia. However, this remains well below the 80 plus per cent share mark during the investment boom.
DMIRS monitors and collects information on mineral, petroleum, and associated infrastructure projects which are in the investment pipeline and estimates the capital value of these projects.
Analysis of this information shows that as of March 2023, projects under construction or committed had an estimated capital cost of $60 billion, an increase of more than $3 billion from the September 2022 estimate.
Despite the Coburn mineral sands and Abra lead projects entering into the production phase, the estimated capital cost of projects under development still increased. This was due to a final investment decision and cost revision being carried out on the West Musgrave copper-nickel project and the start of construction on the Thunderbird mineral sands project. Higher expected capital costs for a host of projects including Cosmos nickel, Iron Bridge magnetite, and Kathleen Valley lithium also helped boost the value of projects in the under construction or committed category.
Overall, the most significant projects under development and that continued to support investment spending in WA were largely unchanged and included:
- Pluto LNG expansion and Scarborough gas.
- Jansz-Io compression.
- Crux gas.
- Iron Bridge magnetite
- Onslow iron ore.
- Western Range iron ore.
- Mt Holland lithium.
- Eneabba rare earths refinery.
- Mardie salt and potash.
- Mt Weld rare earths mine expansion and Kalgoorlie cracking and leaching plant.
The estimated capital cost of medium to longer-term projects (i.e. feasibility and pre-feasibility stage) was $89 billion, up by $1 billion from the September 2022 estimate.
New major projects announced included the Wingellina nickel-cobalt project, Rio Tinto’s investments in renewable energy for its Pilbara iron ore operations, the Manna lithium project, and the West Musgrave mixed hydroxide precipitate project.
They more than offset the transition of the West Musgrave copper-nickel project and Thunderbird mineral sands project into the construction phase category.
Activity in Western Australia’s exploration industry continued to grow in 2022.
Minerals exploration expenditure in the State reached a new single calendar or financial year high of $2.54 billion.
This result reflected:
- Strong levels of spending on exploration targeting gold ($1.1 billion and the 3rd highest level on record).
- Growth in iron ore expenditure (to $649 million) to the highest levels in nearly a decade.
- A new single year record spend on other minerals which includes lithium and rare earths ($293 million).
- A 13-year high in nickel-cobalt expenditure ($267 million).
- Copper exploration expenditure ($195 million) that remained high in a historical context.
Most of the increased spending is targeting brownfields areas or existing deposits. These areas attracted $1.8 billion (a new record) in expenditure. In comparison, spending in greenfields locations or on new deposits was $795 million (also a new record).
The share of expenditure in greenfields locations, compared to brownfields areas, was down compared to recent prior years at 31 per cent.
This suggests that even in the aftermath of COVID-19 restrictions that included limits on regional travel during 2020–21, exploration on existing deposits remains preferred over exploration targeting new deposits. It was also in keeping with an increase in exploration on mature ground for commodities which had not previously been targeted. Brownfields exploration is also lower cost than greenfields exploration, and this preference is perhaps being reinforced by cost inflation.
WA remained the leading destination for exploration investment in Australia, accounting for 63 per cent of the national spend. This is around the same level it has been for several years.
Petroleum exploration expenditure in Western Australia was valued at $447 million in 2022. This was down from $489 million in 2021 and remained weak against historical levels.
However, a lesser decrease in petroleum exploration spending in Western Australia, compared to the rest of the country (expenditure in Queensland, the Northern Territory and South Australia all decreased by more in percentage terms than Western Australia), meant Western Australia’s share of the national spend increased to 46 per cent from 43 percent in the previous calendar year.
Principal resource projects
WA’s mining industry consisted of 129 predominantly higher-value and export-oriented mining projects in 2021-22, up from 125 in 2020-21.
The State’s mining industry also comprised hundreds of quarries and small mines producing clays, construction materials, dimension stone, gypsum, limestone, limesand, and spongolite for the local construction industry. There were 13 principal producers of these products in 2021-22.
With prices still comparatively high, three new iron ore projects entered production – Rio Tinto’s Gudai-Darri project, Atlas Iron’s Miralga Creek project, and Mineral Resources’ Parker Range project. With these new projects, and no sales recorded at Spinifex Ridge, the total number of iron ore projects increased to 34 from 32 the previous year.
The number of gold projects was down to 52 in 2021–22 from 53 in 2020–21. There were six new gold projects – Ramelius Resources’ Tampia, Calidus Resources’ Warrawoona, Capricorn Metals’ Karlawinda, Resources and Energy Group’s East Menzies, Bullseye Mining’s North Laverton, and FMR Investments Hawkins Find. Ramelius Resources also re-started operations at the Penny project. However, six projects were either under threshold or didn’t make any sales this year. Some projects were also re-structured – the Kundana project was integrated into the Mungari operations following its acquisition by Evolution Mining, while Westgold Resources’ Cue and Meekatharra operations were combined into the Murchison gold project.
The number of nickel projects increased to eight this year from six in 2020-21 due to the start-up of Mincor Resources’ Kambalda project and the re-start of Panoramic Resources’ Savannah project.
There was also one additional lithium project with the re-start of Mineral Resources’ Wodgina project (bringing the total number of lithium projects to six), and one more manganese project being Element 25 Limited’s Butcherbird project (bringing the total number of manganese projects to two).
There were no diamonds projects following the completion and production and sales at Argyle the previous year.
There were also 14 major mineral processing operations which transform bauxite into alumina; gold dorè into gold bars; nickel concentrate into nickel matte, nickel powder, nickel briquettes and nickel sulphate; rutile and synthetic rutile into titanium dioxide pigment; zircon into fused zirconia; silica sand into silicon metal; and spodumene concentrate into lithium hydroxide.
This was up from 13, following first production from the Kwinana lithium hydroxide plant in May 2022. The Kwinana nickel sulphate circuit, which is part of the Kwinana nickel refinery, also delivered first crystals in October 2021.
There were 20 principal petroleum projects producing oil, gas and condensates from 51 fields onshore and in the Commonwealth waters around WA.
These projects had associated processing plants for LNG exports and domestic gas sales.
This was down from 22 projects and 55 fields in 2020-21.
Blacktip was previous included as a petroleum project for WA, but was removed as gas is supplied to the Northern Territory. Athena was more appropriately considered as a field under the North West Shelf project rather than a separate project and is no longer producing.
The number of fields declined largely due to changes in the active fields as part of the North West Shelf project.
For an overview of how Western Australia’s key commodities performed, please see mineral and petroleum review 2022.