Industry activity indicators

Mineral and petroleum industry activity review 2021-22

Employment

mining exploration

Western Australia’s mining, mineral exploration, and on-shore petroleum industries employed an average of 157,704 on-site personnel or 123,020 in full-time equivalent (FTE) terms during 2021-22.[1] This was another record for a calendar or financial year.

The mining industry was responsible for the majority of employment with an average of 151,878 people (117,436 FTEs) on-site during the year. This was also a record.

The major contributors to on-site employment continued to be the iron ore (78,974 people or 58,828 FTEs), gold (36,087 people or 30,683 FTEs), alumina and bauxite (9,936 people or 6,713 FTEs), nickel (8,294 people or 8,213 FTEs), and lithium (3,782 people or 3,545 FTEs) industries.

The numbers of people on mining operations was up year-on-year for most minerals, with the notable exception of diamonds (down 269 people or 226 FTEs) following the end of production at Argyle.

Employment on minerals exploration operations was its second highest level on record (after 2021) at 4,626 people or 4,347 FTEs.

By commodity

These results reflected strong levels of mining, construction, and exploration activity in the State.

An average of 1,200 people (1,237 FTEs) were on petroleum operations during the year. The level of employment in the on-shore petroleum industry remained historically low at less than half the level of a decade ago.

[1] Note that this result is based on monthly employment data from July 2021 to March 2022 only. Mining and mineral exploration employment data was not available for the April, May and June period due to data issues. Petroleum employment data was not available for the April, May and June period as it is no longer required to be reported.

Investment

More than $24 billion was invested in Western Australia’s mining and petroleum sector in 2021-22. While this was its highest level for a single calendar or financial since 2016, it was still only half of the level observed during the mining investment boom between 2011 and 2015.

mining investment

The level of mining and petroleum investment in Western Australia has increased for the last 11 quarters after adjusting for seasonal variability.

This result was largely driven by production sustaining projects across the iron ore industry, as well as the Iron Bridge magnetite project.

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 (71 per cent) to growth in total new capital expenditure in Western Australia, though its share remains well below the 80 plus per cent during the mining investment boom.

DMIRS monitors and collects information on mineral, petroleum, and associated infrastructure projects in the investment pipeline and estimates the capital costs of the projects.

Analysis of this information shows that as of September 2022, projects under construction or committed had an estimated capital cost of $57 billion, up by almost $5 billion from the March 2022 estimate.

Major iron ore production sustaining projects including Gudai-Darri and Queens Valley.  LNG backfill projects including Greater Western Flank Phase 3 (for the North West Shelf) and Julimar-Brunello Phase 2 (for Wheatstone) have been completed.

However, there remained a host of significant projects under development or a final investment decision stage that continued to support investment spending. They include:

  • Pluto LNG expansion and Scarborough gas.
  • Jansz-Io compression.
  • Crux gas.
  • 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.
  • Super pit expansion.
  • Kathleen Valley lithium.

The estimated capital cost of medium to longer-term projects (i.e. feasibility and pre-feasibility stage) was $87 billion, up by $3 billion from the March 2022 estimate.

Major projects at this stage included Browse gas, Clio-Acme gas, Dorado oil, the Pilbara hub iron ore, Western Ridge iron ore, Mallina gold, Caravel copper, Kalgoorlie nickel, expansion of the Kalgoorlie Consolidated Gold Mines mill, NiWest nickel, West Musgrave nickel-copper, the Australian vanadium project, and Yangibana rare earths.

Exploration

Activity in Western Australia’s exploration industry continued to grow in 2021-22.

Mineral exploration

Minerals exploration expenditure in the State reached a new single calendar or financial year high of $2.5 billion.

This result reflected strong levels of spending on exploration targeting gold (a new single year record of $1.1 billion), copper ($255 million), and other minerals which includes lithium and rare earths (also a new single year record of $223 million), as well as growth in iron ore (to $592 million) and nickel-cobalt (to $241 million) exploration expenditure to the highest levels in nearly a decade.

Most of the increased spending is targeting brownfields areas or existing deposits.  These areas attracted $1.7 billion (a new high) in expenditure. In comparison, spending in greenfields locations or on new deposits has stabilised with $758 million spent on new deposits in 2021-22, after $780 million was spent in 2021.

The share of expenditure in greenfields locations, compared to brownfields areas, was down compared to recent years at 31 per cent.

This suggests that exploration on existing deposits (already lower cost than greenfields exploration) remains preferred over exploration targeting new deposits. This preference is perhaps being reinforced by cost inflation.

petroleum exploration

Western Australia continued to be responsible for the lion’s share of mineral exploration expenditure for the country as a whole, accounting for 64 per cent of the national spend. This is around the level it has been for several years.

Petroleum exploration expenditure in Western Australia was valued at $567 million in 2021-22. While this was an increase on recent years, it remained weak against historical levels.

A greater increase in petroleum exploration spending in Western Australia, compared to the rest of the country (an increase in expenditure in the Northern Territory was offset by a decline in expenditure in Queensland and Victoria), meant Western Australia’s share of the national spend increased to 49 per cent.

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.

Western Australia’s Principal Resource Projects

Western Australia’s principal resources projects (2021-22) - 109 Kb

Western Australia’s principal resources projects (2021-22)

Western Australia’s principal resources projects (2020-21) - 472 Kb

Western Australia’s principal resources projects (2020-21)

Western Australia’s principal resource projects (2019-20) - 430 Kb

Western Australia’s principal resource projects (2019-20)

Western Australia’s principal resource projects (2018-19) - 272 Kb

Western Australia’s principal resource projects (2018-19)

Western Australias principal mining projects (2017-18) - 143 Kb

A list of Western Australia’s principal mining operations by commodity and financial year.

Western Australias principal mining projects (2016-17) - 116 Kb

A list of Western Australia’s principal mining operations by commodity and financial year.

Western Australias principal mining projects (2015-16) - 115 Kb

A list of Western Australia’s principal mining operations by commodity and financial year.

Western Australias principal mining projects (2014-15) - 119 Kb

A list of Western Australia’s principal mining operations by commodity and financial year.