Mining in Western Australia, together with the petroleum industry in the state, accounted for 94% of the State's and 46% of Australia's income from total merchandise exports in 2019–20. The state of Western Australia hosted 123 predominantly higher-value and export-oriented 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 2019–20, had a value of $174 billion, up from $145 billion in 2018–19. In comparison, the value of the mineral and petroleum industry in 2005–06 was $43 billion.
Iron ore was, in 2019–20, the most important commodity in Western Australia, accounting for 60 percent of sales in the state's mineral and petroleum industry. The petroleum sector, consisting of oil and gas, followed in second place with 22 percent of the overall value. The third most important commodity in the state was gold, at $16 billion, 9.2 percent of the overall value. Alumina, nickel, and base metals (copper, lead and zinc) followed in order of importance, each achieving a value in excess of A$1 billion. Other major commodities included lithium, mineral sands, salt, coal, cobalt, rare earths, and diamonds.
Employment in the Western Australian mining and petroleum industry has sharply increased over the last decade, from 85,163 in 2010, directly employing an average of 135,001 people during 2019–20. The largest employers were the iron ore (48.5%) and gold (23.4%) sectors.Western Australian Mineral and Petroleum Statistic Digest 2010 Department of Mines and Petroleum website, accessed: 5 March 2021
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 (DMP) on 1 July 2017, which in turn replaced the Department of Industry and Resources (DOIR) 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.Department of Industry and Resources Restructure accessed: 27 October 2010
History
Mining transformed the Western Australian economy. Gold finds in the 1890s brought unprecedented numbers of people and amounts of capital to the state.
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 on agricultural expansion and manufacturing initiatives. The primary sector would experience strong growth until the early 1970s, after which it levelled off. More than 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 (with mining and mineral processing the dominant industries), 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 (notably sandalwood and wool), 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 (and remains) 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: Black Monday (1987) 1989: First liquefied natural gas (LNG) cargo exported to Japan in 1989. 2008: 2008 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 Major commodities in Western Australia in order of their 2021–22 sales values: Iron ore
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 2018–19 was , down on the previous year's 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 $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 , with values rising from A$18.9 billion in 2017–18 to A$29 billion in 2018–19 (A$6.3 billion in 2009). In 2018–19 crude oil production was down 34 percent to , while condensate increased 60 percent to 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.Mining towns of Western Australia, page: 48, accessed: 5 February 2010
In 2018–2019, gold production in the state was steady on the previous year, at , 6.4% of world production, although an improving gold price delivered a 4.6 percent increase in value, from $11.4 billion in 2017–18, to a record annual value of $11.9 billion.
Lithium
Historically, Lithium mining in Western Australia accounted for only a very small share of the state's mining revenues, to the point were the production would not be listed individually by the annual relevant mining department's publication but rather be grouped with tin and tantalum. In 2009–10, for example, the combined value of lithium, tin and tantalum production in the state stood at just under A$75 million in comparison to the state's mining industry value of A$71 billion at the time, with the state's lithium production coming from just one operation, the Greenbushes mine.Western Australian Mineral and Petroleum Statistics Digest 2009-10 Department of Mines, Industry Regulation and Safety, accessed: 8 March 2023 Production values for the three minerals had doubled by 2015,Western Australian Mineral and Petroleum Statistics Digest 2014-15 Department of Mines, Industry Regulation and Safety, accessed: 8 March 2023 and, in 2016–17, seven lithium mines were active in Western Australia, with a combined production of 2.1 million tonnes of spodumene concentrate at a value of A$1.6 billion.Western Australian Mineral and Petroleum Statistics Digest 2015-16 Department of Mines, Industry Regulation and Safety, accessed: 8 March 2023