Iron ore sales may have dropped in 2022 by 20% to $126.4 billion, but WA still reached another record high in its mineral and petroleum sales by 6.5% to $246b.
WA’s bedrock mineral
Iron ore comprised more than half of WA’s mineral and petroleum sales. China remains a key market for WA, taking 84% of its iron ore exports. As such, factors such as China’s steel production cuts and various government policy changes influenced prices throughout 2022.
A record 855 million tonnes of iron ore was sold from WA in 2022, the largest quantity for a calendar or financial year. Driving this were record shipments from Hancock Prospecting, Fortescue Metals Group (FMG) and Rio Tinto.
“The Fortescue team continues to deliver strong, consistent performance and returns for our shareholders, maintaining our position as the world’s lowest cost iron ore producer, while we decarbonise our operations profitably and become a global green energy, metals and products business,” says FMG Executive Chairman Dr Andrew Forrest in the company’s half year results to 31 December 2022 statement.
Sales values for lithium soared last year from $2.7b to $16.3b in 2022.
WA has started producing lithium hydroxide and will begin to export it in greater volumes this year.
The newly built Kwinana and Kemerton processing plants each have a capacity to produce around 25,000 tonnes of lithium hydroxide a year, supplied by lithium concentrate from the Greenbushes and Mt Marion mines. Additional trains are also being built at these plants that will double their production capacities.
The State’s third lithium hydroxide plant is under construction as part of the Mt Holland project and is due for completion in 2025. It will have a production capacity of 50,000 tonnes per year.
The Kathleen Valley lithium project was sanctioned for development in August 2022 and is targeting its first spodumene production in mid-2024.
Other minerals performed well
Several other commodities also supported the mining industry’s record year, including gold sales which valued a record $17.8b – the highest level of production since the mid-1990s.
Nickel sales were up to $5.7b, reflecting the highest level in 15 years largely on the back of strong prices during the same period.
The value of spodumene concentrate sales rose to a record $16.3b, more than double the previous 2021-22 record of $7.9b.
Sales also increased among alumina ($6.9b), mineral sands ($1.3b), rare earths ($797m), salt (a record $625m) and cobalt (a record $528m) – primarily due to higher prices.
Copper sales were down on the previous year due to a fall in the price from record levels, valuing $1.6b in 2022.
An overall weaker Australian dollar also assisted the sector, averaging 69 US cents for the financial year due to strength in the US dollar and financial market volatility.
Petroleum powers on
The petroleum sector, consisting of liquefied natural gas (LNG), condensate, crude oil, domestic gas and liquefied petroleum gas (LPG), reached record sales valued $67b.
LNG was the most valuable petroleum product. Prices and local production reached an all-time high in value from $27.1b in 2021 to $50.7b in 2022.
Despite lower production, some of the highest US dollar oil prices in more than a decade also meant condensate production was valued at a record $9b and crude oil production was valued at an eight-year high of $4.1b.
WA’s share of global supply
WA remained the dominant producer of iron ore, holding 38% of global supply – almost doubling over 10 years.
Brazil was the second largest supplier of iron ore, with 17% of the global market, followed by China with 12%.
In 2022, WA was the world’s leading supplier of lithium, accounting for 54% of global supply, followed by Chile (27%). All Australian lithium produced in 2022 came from WA.