Opening the recent Paydirt Magazine gold conference in Perth, Western Australian Minister for Mines and Petroleum Norman Moore said gold was one of the state’s stronger mining sectors.
“It is fair to say that for many investors the name Western Australia is synonymous with gold,” Moore told the conference.
Moore presented a raft of statistics, which he said demonstrated the strength of the WA resources industry.
“In 2010 the value of this state’s mineral and petroleum production was $91.6 billion and that was up from $71 billion the previous year, an increase of some $20 billion.
“Of the $91.6 billion minerals accounted for $70 billion.
“When I was minister last time in 2000 the value of minerals and petroleum in Western Australia was $21 billion dollars.”
In the last 10 years the value of minerals and petroleum production in Western Australia has increased more than fourfold.
Last year alone the value of Western Australian gold production was a record at $7.8 billion dollars, reflecting an increase of 35% on the previous year.
Moore attributed this result to the recent strength of the gold price, which averaged $US1224 during 2010.
Gold production in WA during this time increased by 25% to 5.9 million ounces with the state accounting for some 71% of the total Australian gold production from the 166 gold mines that are currently operating throughout the state.
“The rebound in the gold price has also flowed through to the exploration sector,” Moore explained.
“Exploration expenditure for gold across Western Australia was worth $412 million in 2010. This was an increase of close to 50% on the 2009 level.
“It represents about 30% of the total exploration expenditure of Western Australia.”
Recent exploration activity within WA has been fruitful to say the least with a number of significant discoveries including the Tropicana and Doolgunna gold deposits.
The Doolgunna discovery of Sandfire Resources in particular has reignited a great deal of interest in WA’s gold potential with any number of emerging companies looking to replicate its success.
The project’s location straddles the Great Northern Highway, which has become something of a divining rod for potential miners when targeting gold mineralisation.
One such example is Doray Minerals, which in March last year made the high-grade Andy Well discovery adjacent to the Highway 40 kilometres north of Meekatharra.
“If you look at Australia’s total exploration expenditure Western Australia has gone from 49% five years ago to 57% last years,” Moore said.
“That demonstrates companies are taking a much greater interest in Western Australia.”
Closing his opening address Moore took aim at the federal government’s Mining RR Tax stating the WA government continues to oppose its introduction.
Moore labelled the MRRT a tax on Western Australia, which he said would result in about $8 billion a year leaving WA and heading straight into the federal government’s coffers.
“Probably 60% – 70% of the tax will come out of Western Australia,” Moore said.
“We believe it will place an unfair burden on developers of our resources. It simply ignores the risks, the significant risks, associated with exploration and mining anywhere in the world.
“In addition, a federal tax may compromise the Western Australian community’s right to a fair return of royalties from resources, which Western Australian taxpayers legally own.”
If one tax to rail against wasn’t enough to rail against Moore then reloaded to fire another shot, this time across the bow of the federal government’s proposed carbon tax, which he said, “Poses a threat to all miners, not just coal and iron ore producers.
“We will continue to fight for the best outcomes for Western Australia on both fronts, including a careful assessment of the constitutionality of the federal government’s proposed mining tax.
“The more I look at it the more I see it as a rent or a royalty and that is not something, in my view, the federal government is entitled to access.
“In the meantime the improvements we are making to our exploration and development environment will, we hope, ensure we remain an attractive destination for exploration and investment dollars.”
Western Australian minister for mines and petroleum Norman Moore