The importance of iron ore to Western Australia s economy By Don Flint*, Nicole Wyche*, Trevor Beardsmore* and Tim Griffin *Geological Survey of WA
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
WA s resources mega cycles Source: ABS & DMIRS
State revenue 2016 17 Source: State Budget papers 2016 17
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
Major commodities (value), 2015 v 2016 Value of sales Source: DMIRS
Source: DMIRS, DIIS and ABS
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
Iron ore production Western Australia Source: DMIRS
Source: www.metalprices.com WA magnetite royalty rebate announced
Magnetite royalty rebate Offered as incentive to a fledgling sector (2% of WA production) Started 9 September 2013; extended for two years in 2016 17 budget; current in 2017 18 50% of royalties rebated Cost: $5 M (2014 15); $12 M (2015 16); $17 M (2016 17)*; $22 M (2017 18)* Source: DMIRS, State Budget papers 2016 17 Estimates
Direct employment (2016) in mineral sector Commodity Employees % Base metals 2,225 2% Bauxite - Alumina 6,715 6% Coal 1,108 1% Diamond 873 1% Gold 25,495 24% Mineral sands 2,397 2% Iron ore 52,315 50% Tin, Ta and Li 888 1% Nickel 5,444 5% Salt 794 1% Other 6,549 6% Total 104,803 Source: DMIRS
Source: ABS Mineral exploration expenditure, WA
Mineral exploration expenditure Explor ($M) Sales ($M) % 2000 26 4,365 0.59% 2012 1,040 52,283 1.99% 2016 279 53,931 0.52% Explor Iron ore Sales data ($M) Value ($M) % 2000 25.6 4,365 0.59% 2012 1040 52,283 1.99% 2016 278.6 53,931 0.52% Source: ABS Chart data in 2016 dollars; table data in dollars of the day
Mineral Resource estimates Estimates by mineralisation style Source: DMIRS Resource estimates are compiled by industry; collated by DMIRS
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
Additional rent: 25 c/t $5/t? cash-out? Source: The Weekend West 7 8 January 2017 The West Australian 7 May 2017
Source: The West Australian 29 June 2017 Government of Western Australia Department of The Mines West and Australian 1 July 2017 Petroleum
State s GST distributions, 2000 01 to 2016 17 Source: Minerals Council of Australia, July 2017
Conclusion