KALGOORLIE (miningweekly.com) – Volatile commodity prices and uncertainty around economic growth have combined to drag down Deloitte’s Western Australian (WA) Index by 10.9%, to A$125.6-billion.

In a special edition of the Index, delivered at the opening of Diggers & Dealers, Deloitte’s lead audit partner Tim Richards said the sharp fall in iron-ore prices most significantly affected key mining players Fortescue Metals and Atlas Iron, with A$6.1-billion and A$1.2-billion respectively wiped off their market capitalisation  over the past 12 months.

“Major capital project delays and cancellations have led to significant flow-on effects, with repercussions felt throughout the engineering, construction and other mining support service industries.” 

Richards pointed out that many commodity prices fell significantly over the 12-month period, owing in part to concerns about the strength of the global manufacturing economy and commodity oversupply, with most experiencing market saturation. Gold fell 23.9%, silver 30.4% and iron-ore 14.4% during the financial year 2013, while palladium had the largest increase of 11.2%.

The share price gains from the December reporting season through to February 2013, were more than wiped out by the downward spiral experienced by Western Australian markets from March through to June 2013.

“The performance of the WA Index stands in contrast to the outperformance of financial institutions during the year. The Big Four banks were among the biggest gainers on the All Ordinaries Index, which increased 15.5% in the year,” he said.

“Westpac Banking Corporation took the lead with growth in market capitalisation of 37.9%, followed closely by Commonwealth Bank of Australia, Australia & New Zealand Banking Group and National Australia Bank, which also posted high growth during the year.”

The 10.9% fall in the Deloitte WA Index over the year underperformed in comparison to major international indices surveyed. Japan’s Nikkei was the standout performer, experiencing an increase of 54.1% over the year. The US S&P 500 followed the trend with an increase of 20.9% and London’s FTSE 100 rose by 11.5%.