PERTH (miningweekly.com) – The mining industry’s contribution to Western Australia’s economy was likely to significantly increase as the sector transitioned from construction to an operating phase, the Western Australian Chamber of Minerals and Energy (CME) reported on Tuesday.

In the latest edition of its Western Australian Resources and Economics report, compiled by KPMG, the CME states that, despite the anticipated deceleration in mining investment, the operating phase would see a significant shift in production levels in coming years, most notably in the bulk commodities and liquefied natural gas (LNG) sectors, which would result in greater economic benefit to the state through company profits and additional royalty payments.

“Notwithstanding the softening of prices towards the end of last year, Western Australia and the wider economy continues to benefit from the growth in the resources sector. Ongoing investment and growth is maintaining record levels of employment in Western Australia,” CME CEO Reg Howard-Smith said.

Data from the Australian Bureau of Statistics noted that actual and expected capital investment expectations indicated that investment for 2012/13 would post modest gains – in the order of 5% over the previous year – but there would be an overall decline in capital expenditure in 2013/14 of a similar magnitude.

The first-quarter report also noted that the shift in the sector would require a change in the skills set of employees, with the CME predicting that the construction workforce on resources projects would peak in 2014, before declining, while the operating workforce would increase strongly through to 2018, with an additional 19 000 operational staff required.

Furthermore, the report predicted that total mineral exploration expenditure continued to decline. After falling by 19% in the September quarter, exploration expenditure fell by a further 4% in the December quarter to A$471-million.

“While the decline over two quarters in exploration expenditure is likely due to the weak commodity price environment, a continuation of the downward trend should be of concern to all stakeholders,” said Howard-Smith.