Monsters of Rock: WA resources sector added $100 billion to the Aussie economy in 2021, CME says ahead of budget
Link copied to
The Chamber of Minerals and Energy is one of the most powerful lobby groups in WA, and come budget and election time they tend to have a tight bind around government policy.
Having won a succession of battles with governments on a range of policies from mining taxes, to mining lease rentals (kind of like mining taxes) to gold royalties (not really taxes, but happy to call them that if it makes folks angry), few governments would be in their right mind to step in the ring with them these days.
Just a reminder of the sector’s power to ring in Aussie Treasurer Josh Frydenberg’s ear ahead of budget day then.
The CME has chosen an apropos and frankly obvious time to release its survey of member companies claiming WA’s mining folk tipped $100 billion into the national economy in 2020-21.
They’ll certainly be grateful, the numbers tomorrow are likely to reveal just how much booming iron ore, gold, coal and gas prices have added to a national economy after its pandemic spending spree (Jobkeeper anyone).
“It’s well-acknowledged that the past couple of years have involved some significant challenges for our sector – including the management of COVID-19 and ongoing skills and supply chain constraints,” CME director of policy and advocacy Rob Carruthers said.
“CME is extremely proud of the way WA mining and resources has been able to operate both safely and effectively during the pandemic, and we’re extremely grateful for the hard work, professionalism and dedication of our workforce.
“They haven’t just got the job done, they’ve doubled down when the sector needed them most, and this economic contribution data reflects that.
“The results of this survey capture only a snapshot of our members’ direct contribution, so the ‘total’ sector-wide figure to the broader economy is likely to be significantly more than the $100 billion.”
The CME says its 56 member companies made a direct contribution to the WA economy of $61b, with more than $52.5b on purchasing goods and services from suppliers and to community organisations and local governments.
They also claim $12.67b in wages and salaries were paid to over 70,000 full time workers with another 13,177 full-time contractors, more than $10.98b in payments made to the WA State Government and $24.21b to the Federal Government.
“Both the direct and indirect contributions of CME’s member companies spread far and wide throughout communities around WA and, indeed, across Australia,” Carruthers said.
“In fact, our sector supports close to one in four full-time jobs in Western Australia and at least one in 16 Western Australian businesses have resource sector companies within their customer bases.
“With more than $127 billion of projects under development in the WA resources sector pipeline, these types of contributions should continue to flow through for decades to come.”
Keep that ringing in yer ears Josh.
Gold Road Resources (ASX:GOR) has offered a 0.5c a share dividend payment after posting a $36 million net profit after tax from its share of the Gruyere gold mine in WA in 2021.
It was a big drop in profits from $80.8m a year earlier.
Gold Road’s revenue fell year on year from $294.7m in 2020 to $274.8m in 2021 with average realised gold prices slipping from $2330/oz to $2210/oz and gold sales slightly lower at 124,335oz after production was impacted by mill issues in the June and September quarter.
GOR’s EBITDA slid from $170.6m in 2020 to $120.2m in 2021.
But it remains debt free with $131.5m in the bank (up from $126.4m a year earlier), with plans afoot to see Gruyere’s annual gold production increase to 350,000ozpa (shared with JV partner Gold Fields) by 2023.
Meanwhile, Perseus Mining (ASX:PRU) has added 4 years to the mine life of its Sissingue operations in Cote d’Ivoire.
Having produced 367,500oz of gold over the past four years, exploration has extended the mine life at Sissingue to March 2026, with Perseus expecting to deliver 72,000ozpa at an all in cost of US$1261/oz over that time.
“The Sissingué Gold Mine has been an important part of Perseus’s geopolitically diversified asset portfolio since commencing commercial production in 2018 with an estimated 4.5-year mine life. Since then, the mine has consistently produced gold in excess of forecasts and importantly, generated significant amounts of free cashflow,” PRU MD Jeff Quartermaine said.
“This updated LOMP incorporates the processing of ore from satellite deposits at Fimbiasso and Bagoé as well as the Sissingué Gold Mine, and results in the life of the Sissingué operation being extended out till at least March 2026 which enables Perseus to continue generating material benefits for all of our stakeholders, including the residents of our host communities at Fimbiasso and Bagoé.”