While Western Australia continues to benefit from the resources sector, uncertainty around the Greek debt crisis, a possible slowdown in China’s economic growth and three tropical cyclones, which affected the production of key commodities, has translated to falling business confidence.
These factors are reviewed in the June 2012 edition of the WA Resources and Economics Report, prepared by the Chamber of Minerals and Energy of Western Australia (CME), in conjunction with KPMG.
CME CEO Reg Howard-Smith said that while continuing to be the powerhouse of the nation, the WA resources sector was facing some challenges.
“Over the March quarter WA has seen decreases in production of several commodities, particularly iron ore largely due to cyclonic weather shutting port operations,” Mr Howard-Smith said.
“Continued speculation on what impact the Greek debt crisis will have on Australia has hit the market pretty hard and particularly affected small and mid-tier miners who are susceptible to these types of jitters.”
“With this uncertainty, it’s not the ideal time to throw in some new taxes but that’s the reality with the implementation of the Minerals Resource Rent Tax and Carbon Tax now in effect.”
“China is expected to remain a big consumer of Australia’s mining exports and a good indicator of that is the monthly crude steel production in China to May this year being higher than the same period in 2011.”
“These and other factors support a robust short to medium term outlook for the WA economy, with close to five per cent real GDP growth per annum over the next three years.”
After declining for three quarters of 2011, the average export unit value of iron ore remained relatively unchanged for the March 2012 quarter.
Investors remain confident in the viability of minerals and energy exports, demonstrated by the large amount of projects in the pipeline.
The quarter saw ten major project completions including Woodside’s Pluto, First Quantum’s Ravensthorpe nickel, BHP Billiton’s Mount Keith redesign and Rio Tinto’s Dampier Port expansion.
The report’s ‘Spotlight Issue’ focuses on securing a skilled labour force and the ways resource companies are looking at to meet this challenge, including training, succession planning and workforce delivery.
The June report also features an interview with Chevron Australia managing director Roy Krzywosinski, who provides an insight into the impact Chevron’s projects are having on the wider Australian economy and the importance of local industry participation to deliver projects.
Chamber of Minerals and Energy of Western Australia
For the latest news click here
For the latest Drive features click here
For the latest Travel features click here
For the latest Food & Drink features click here
Follow myresources.com.au on Twitter