Investment in the WA resources sector continues to surge and will be the key driver of growth in the WA economy for 2012-13, according to a report by the Chamber of Minerals and Energy of Western Australia (CME) in conjunction with KPMG.

The December 2011 edition of the WA Resources and Economics Report  shows the resources sector continues to provide stability to the economy and is keeping unemployment down.

CME Chief Executive Reg Howard-Smith said seven projects – one energy, five mineral mining and one infrastructure – were completed in the six months to October 2011.

“A number of major projects are expected to begin production over the next two years, while demand for iron ore and natural gas remains very strong,” Mr Howard-Smith said.

“Labour demand in the WA resources sector has contributed to the lowest unemployment in the country at 4.3 per cent and direct employment in the resources sector cracked the 100,000 mark for the first time in December.”

“Growth in exports is forecast at a rapid pace of 8.56 per cent in 2011/12, with even stronger growth expected in 2012/13, in line with higher production of LNG over the medium term.”

The largest increases in production were recorded for iron ore (8.9 per cent) and titanium minerals (22.6 per cent). However the average export unit value of iron ore fell 5.8 per cent during the quarter and marks the second consecutive quarter in which the export unit value has fallen.

The European debt crisis has seen investors flock to gold which continues to be a sensible bet with the gold price increasing by 14.1 per cent during the quarter.

Mr Howard-Smith said an increase in uranium exploration of 28 per cent showed the market was recovering from the Fukushima nuclear incident.

“News of the Federal Labor Party agreement to overturn its ban on uranium exports to India and a slight relaxation by WA Labor its uranium policy may also continue to see a positive impact on exploration in 2012,” he said.

Other key findings in the December 2011 WA Resources and Economic Report:
• The WA resources sector continues to out-perform the All ASX and S&P/ASX 300 indexes
• Mineral exploration accounted for almost half of the total $970million exploration expenditure in WA, rising by 7 per cent to $482million
• Gross State Product is expected to grow to 4.3 per cent in 2011/12, climbing to 6 per cent in 2012/13 and 2013/14
• At the end of October 2011, there were 40 projects at an advanced stage of development in WA. Total capital expenditure on these projects was at a record $147.5billion – an increase of $38billion or nearly 35 per cent from April 2011

The December report also identifies key challenges for infrastructure development to support the resources sector.

The report is available here.

The Resources Safety unit within the WA Department of Mines and Petroleum is developing  a draft code of practice  to help identify hazards and risk factors associated with drilling operations.

The Minister for Defence Stephen Smith has released a progress report from the expert panel preparing the Defence Force Posture Review.

The December edition of the WA Resources and Economics Report, released by the Chamber of Minerals and Energy of Western Australia (CME), shows that the resources sector is continuing to display strong growth.

Gold mining company, Silver Lake Resources, has announced an agreement with Phillips River Mining Ltd to merge the Phillips River’s assets into Silver Lkae by a Schem of Arrangement. The acquisition has a transaction value of approximately $20m or about 2.5% of Silver Lake’s current market capitalisation.

Queensland’s best agricultural land is now officially protected from mining under Strategic Cropping Land Act 2011.

A joint venture between Thiess and Belgian company Besix has won a $260 million contract to develop the breakwater and materials offloading facility (MOF) of the Chevron-operated Wheatstone Project, a liquefied natural gas (LNG) and domestic gas project in Western Australia.

Brockman Resources Limited has appointed Russell Tipper, formerly General Manager with Aquila Resources Limited, as Chief Executive Officer.

The Queensland Co-ordinator General has declared the Central Queensland Integrated Rail Project (CQIRP) as a “significant project”, clearing the way for QR National to embark on the environmental impact statement.

Woodside Petroleum has confirmed in a statement to the Australian Securities Exchange that it is considering the sale of some of its equity in the Browse LNG development. The statement follows an announcement in December that it was seeking to delay its final investment decision, required by mid-2012 under the terms of the Browse Basin retention lease, until into the first half of 2013.

Environment and Water Minister Tony Burke has appointed an interim committee of experts to provide independent scientific advice on coal seam gas and large coal mining.

A decision by Fair Work Australia to allow 154 workers at Xstrata’s Newlands coalmine in Queensland  to opt out of a collective union agreement in favour of common law contracts could have wider implications for future work relations cases.

Aurecon and mining services company JKTech have entered into a strategic alliance to be known as JK Aurecon to provide assessment of mine processing and enabling infrastructure.

Chinese oil giant Sinopec has announced an amended deal with Australia Pacific to buy 7.6 tonnes per annum (mtpa) of LNG through to 2035, up from 4.3 million (mtpa).

Gina Rhineheart, already Australia’s richest person, has nearly doubled her wealth after her company, Hancock Prospecting, sold a 15 per cent stake of its Pilbara Roy Hill project to South Korean steel giant Posco.

The Federal Government has released a report analyzing the extent to which existing regulatory frameworks support action by major infrastructure sectors in adapting to climate change.

Researchers from Cornell University in the United States have found a connection between hydraulic fracturing, or fracking, and the release of substantial amounts of stored methane gas.

Rio Tinto’s $1.4 billion bauxite mine expansion on Cape York could be subject to  reconsideration by the Federal Government following pressure from environmental groups  for Rio Tinto to be prosecuted for failing to identify threats to the Great Barrier Reef resulting from the passage up to 700 ships annually between Cape York and the Gladstone alumina refinery.

Recruitment specialist Hays has released its January to March quarterly report into labour and skills demand, examining the ‘current hotspots of recruitment activity and trends’.

Australia-Pacific LNG (APLNG) has signed a binding agreement with the Sinopec Group of China that will see Sinopec take a total of 7.6 million tonnes of liquefied natural gas (LNG) per annum from the APLNG Project in Gladstone in Queensland. It is the largest LNG supply agreement in Australian history.

The Reserve Bank of Australia (RBA) has released a report into the state of the mining industry in Australia, detailing the ‘remarkable turnaround' of the sector during the 2000s.

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