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Energy|Environment|Exploration|Export|Gas|Gold|Health|Iron Ore|Lifting|Mining|Oil And Gas|Oil-and-gas|Ports|Projects|rail|Resources|Roads|Safety|Services|Water|Infrastructure|Operations

Mining drives WA budget

12th May 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – A strong resources sector, which has continued to operate through much of the Covid-19 pandemic, along with higher commodity prices has assisted in Western Australia in reporting an expected operating surplus of A$5.7-billion for 2021-22.

Premier Mark McGowan on Thursday pointed out that the domestic economy grew by 7.2% over the two years of the pandemic, the strongest in the nation, with more than two and a half times the growth of the rest of the country - among the best performing in the world.

“The uninterrupted operation of our resources sector throughout the Covid-19 pandemic, unlike our competitors, has allowed the sector to take advantage of elevated commodity prices, particularly iron-ore, which underpinned Western Australia's record value of commodity exports in 2021. 

“The value of Western Australia's merchandise exports also reached a new high, accounting for more than half of the nation's merchandise exports. This has resulted in billions of additional dollars flowing eastward to support the rest of the country, particularly through company tax collections and the goods and services tax,” said McGowan.

The state’s domestic economy is forecast to grow by 5.25% in 2021-22, which would be the strongest growth in a decade, with solid growth expected over the next four years including four per cent growth in 2022-23. Gross State Product, which includes trade, is expected to increase by 3.75% this year, the strongest growth since 2013-14.

A A$1.6-billion surplus is forecast in 2022-23, with surpluses expected across the forward estimates.

Meanwhile, McGowan on Thursday also announced that the state government would invest more than A$1.3-billion to diversify and expand the capacity of the economy, with investments going towards growing local industries, expanding export markets and developing priority sectors.

The measures include a 50% royalty rebate to support development of the potash industry.

The 2022-23 Budget includes a further record A$33.9-billion investment in infrastructure, including in hospitals, schools, rail, roads, ports and projects in other key areas.

The Chamber of Minerals and Energy of Western Australia (CME) on Thursday said that the state Budget had highlighted the bumper contributions from the mining sector.

CME director of policy and advocacy, Rob Carruthers said the sector’s cumulative contribution of A$12.58-billion reflected the ability of operations around the State to adapt to the pandemic’s evolving conditions and manage a skills shortage being experienced across a variety of industries.

The contribution was only slightly lower than the 2020-21 record of A$12.7-billion, and includes nearly $10.3 billion in iron ore royalties and A$915-million in North West shelf grants from oil and gas projects.

“The total of A$12.58-billion in royalties, North West Shelf grants and lease rentals generated by mining and resources sector operations during 2021-22 accounted for more than 30 per cent per cent of all Western Australian government revenue,” Carruthers said.

“We’re very proud as a sector that our continued contributions help to fund health, education and other essential services, while also serving to assist with the relief of cost-of-living pressures for West Australians.

“We’re also very proud of the way our sector has not just continued operating effectively despite the ongoing challenges of Covid-19, but has done so in a way that prioritises the health and safety of its workforce and surrounding communities.

“Our planning for Western Australia’s current phase of living and working with Covid-19 actually started in the early days of the pandemic and we’re grateful for the collaborative approach progressed with the Western Australian government, including important recent settings for worker furloughing and managing of positive cases when they have presented on-site.

“It’s noteworthy that employment in Western Australia grew 5.0% in 2021-22 and with a record number of workers in the sector, some 156 000 at latest count, the mining and resources sector was clearly a major contributor to local jobs growth.”

Carruthers said projected royalties of nearly A$7.1-billion in 2022-23 reflected the ongoing importance of the Western Australian mining and resources sector.

“There are huge opportunities looking forward with A$156-billion in projects in the Western Australian resources pipeline, and it is crucial that government maintains a strong focus on facilitating the delivery of key projects, including tangibly reducing approval timeframes,” Carruthers highlighted. 

“I note the Premier has emphasised that the Budget is based around conservative price estimations for a range of commodities, including iron-ore, which has been assumed to return to its long-term average price of $66/t from November.

“But pleasingly, revenue from lithium, nickel and gold revenues is expected to increase in 2022-23, along with North West Shelf Grants. Lithium royalties, in particular, are forecast to substantially jump from A$255-million to A$447-million, which reflects Western Australia’s growing position in future-facing commodities. 

“Of course, as a sector we’re very aware that commodity prices do fluctuate and that’s why it’s so important that we continue to plan for the future. 

“There are a number of initiatives in the budget to support investment attraction and further diversification from our existing mineral resources strengths. These will important to help ensure the Western Australian mining and resources sector stays globally competitive and captures the substantial value-adding opportunities available under the current strong cycle.”

The Association of Mining and Exploration Companies (Amec) has welcomed the state government’s drive to diversify, and the further investment in infrastructure and investment into staffing for the Department of Mining, Industry Regulation and Safety.

Some A$20.2-million will go to lifting the Department of Mining, Industry Regulation and Safety’s Resources Advice and Regulation Services capacity, including A$14.6-million for the Aboriginal Empowerment Initiative; A$2.9-million for post grant mining titles compliance; A$1-million for a new Registrar’s office in Geraldton; and A$1.8-million to support a Mining Warden, all facilitating greater mining and mineral exploration. The additional A$1.4M-million will also go towards the Department of Water, Environment Regulation to support staffing stretched by the delivery of reforms. 

Amec has also welcomed expenditure of A$12.4-million for consultation and effective transition of the Aboriginal Cultural Heritage Act.

“The $1.8M funding for support staff for the second Perth Mining Warden, as called for by Amec, is particularly welcome to ensure the efficient and effective operation of the Court,” said AMEC policy director Neil van Drunen.

“The commitment of A$12-million for a state-wide passive seismic survey, the WA Array, will increase the knowledge of Western Australian geology at depth and generate precompetitive data.  The additional A$8-million for Minerals Research Institute of Western Australia (MRIWA) will support greater scientific research to extend the State’s leadership in the sector.

“The A$350-million expansion of Geraldton Port and A$78-million for growth at Lumsden Point will facilitate projects in each port’s hinterland that will benefit from the increased capacity,” said Van Drunen.

“The A$100-million commitment to an Investment Attraction Fund is a welcome addition to the 2022-23 Budget and will facilitate investment in a range of industries.

“However, the A$10-million potash industry royalty rebate schemes, a 50% royalty rebate over two years, is only a modest step forward to support the establishment of a new potash industry in Western Australia.”

“The 2022-23 Budget includes a range of initiatives to support the mining and mineral exploration sector as it drives the state’s growth and provide ongoing benefits to the community,” said Van Drunen.

Edited by Creamer Media Reporter


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