The importance of iron ore to Western Australia s economy. By Don Flint*, Nicole Wyche*, Trevor Beardsmore* and Tim Griffin *Geological Survey of WA

Transcription

1 The importance of iron ore to Western Australia s economy By Don Flint*, Nicole Wyche*, Trevor Beardsmore* and Tim Griffin *Geological Survey of WA

2 Outline WA s resources megacycles State revenue and royalty Quantity and value of production Magnetite royalty rebate Mineral exploration trends Additional rent (iron ore) GST distribution

3 WA s resources mega cycles Source: ABS & DMIRS

4 State revenue Source: State Budget papers

5 Royalty receipts & NW Shelf Grants 2016 Total 4,737 M Iron ore 3,642 NW Shelf 742 North West Shelf Grants 12.0% Gold 5.4% Mineral sands 0.4% Nickel 1.0% Petroleum * 0.1% Gold 254 Other 11.1% Other 1.3% Alumina 77 Cu-Pb-Zn 50 Nickel 47 Iron ore 76.9% Diamonds 0.3% Copper, Lead & Zinc 1.1% Alumina 1.6% Source: DMIRS & Treasury

6 Major commodities (value), 2015 v 2016 Value of sales Source: DMIRS

7 Source: DMIRS, DIIS and ABS

8 Merchandise exports 2016 Western Australia Queensland 20.7% Australia New South Wales 15.0% Victoria 9.1% Western Australia 41.5% South Australia 4.2% Northern Territory 1.7% Tasmania 1.0% Australian Capital Territory 0.0% Total Other 6.8% Half is iron ore WA total $106B; Minerals & petroleum $95 billion (90%) Total: $255 billion Source: ABS

9 Iron ore production Western Australia Source: DMIRS

10 Source: WA magnetite royalty rebate announced

11 Magnetite royalty rebate Offered as incentive to a fledgling sector (2% of WA production) Started 9 September 2013; extended for two years in budget; current in % of royalties rebated Cost: $5 M ( ); $12 M ( ); $17 M ( )*; $22 M ( )* Source: DMIRS, State Budget papers Estimates

12 Direct employment (2016) in mineral sector Commodity Employees % Base metals 2,225 2% Bauxite - Alumina 6,715 6% Coal 1,108 1% Diamond 873 1% Gold 25,495 24% Mineral sands 2,397 2% Iron ore 52,315 50% Tin, Ta and Li 888 1% Nickel 5,444 5% Salt 794 1% Other 6,549 6% Total 104,803 Source: DMIRS

13 Source: ABS Mineral exploration expenditure, WA

14 Mineral exploration expenditure Explor ($M) Sales ($M) % , % ,040 52, % , % Explor Iron ore Sales data ($M) Value ($M) % , % , % , % Source: ABS Chart data in 2016 dollars; table data in dollars of the day

15 Mineral Resource estimates Estimates by mineralisation style Source: DMIRS Resource estimates are compiled by industry; collated by DMIRS

16 Additional rent iron ore A lessee shall pay rent calculated at the rate of 25 cents per tonne of all forms of iron ore obtained from the mining lease after the expiry of the period of 15 years from (a) the day on which iron ore is or was first obtained from that mining lease by the lessee; or (b) the day on which the Mining Amendment Regulations 1996 came into operation (13 September 1996), whichever is the later day Source: Mining Act 1978 and Regulations slp.wa.gov.au

17 Additional rent: 25 c/t $5/t? cash-out? Source: The Weekend West 7 8 January 2017 The West Australian 7 May 2017

18 Source: The West Australian 29 June 2017 Government of Western Australia Department of The Mines West and Australian 1 July 2017 Petroleum

19 State s GST distributions, to Source: Minerals Council of Australia, July 2017

20 Conclusion