Over the past decade the Australian resources and energy sectors have experienced significant change, starting with the resources boom in the mid-2000s and continuing more recently with deteriorating export markets. In September 2011, Australia’s trade reached its highest level in 140 years.[1] The investment phase peaked in 2011. Since then the number of new exploration and capital expenditure projects has fallen substantially.[2]
Although iron ore resources can be found in all Australian states and territories, almost 90 per cent of identified and accessible resources occur in Western Australia, including almost 80 per cent in the Hamersley region in the Pilbara. It is one of the world’s major iron ore provinces.[3] In 2014–15 Western Australia contributed 98.6 per cent of the total production of iron ore in Australia.[4]
In this year’s top 500 there are 21 corporations that are based in the Pilbara, which is part of the Greater Western Australia region.
Figure 11 suggests corporations located in the Pilbara area appear to have significantly benefited from the mining boom. In 2007–08 the average income of Pilbara-based corporations was virtually identical to the average national income of the top 500 corporations. However, from 2008–09 to 2013–14, Pilbara-based corporations consistently increased their income relative to the national average. The peak occurred in 2013–14 and the decline has been steady but less steep than the rise.
In 2015 many iron ore producers announced cuts to employee numbers and service contracts. As expected, these cuts have affected Aboriginal corporations in the Pilbara. In 2015–16 the average income of Pilbara-based corporations decreased by $0.83 million from 2014–15 (from $7.81 million to $6.98 million), whereas the average income of the top 500 corporations increased by $0.06 million (from $3.77 million to $3.83 million).
Although there was a noticeable decline in average income for the last year, on average, corporations in the Pilbara still had a higher income compared to other corporations across the whole of Australia. The average income in 2015–16 of the Pilbara-based top 500 corporations has dropped to just under double (1.8 times) the average income of all the top 500 corporations ($6.98 million compared to $3.83 million). This average income is still above the best performing region, Arnhem Land and Groote Eylandt, which had an average income of $6.33 million.
The combined total income for top 500 corporations in the Pilbara region declined by 18.3 per cent—from $179.6 million in 2014–15 (23 corporations) to $146.7 million in 2015–16 (21 corporations).
Figure 11: Average income of the top 500 corporations based in the Pilbara compared with average income of all the top 500 corporations, 2007–08 to 2014–15
Figure 12: Percentage change in average income of the top 500 corporations based in the Pilbara compared with all the top 500 corporations, 2008–09 to 2014–15
The annual percentage changes for corporations in the Pilbara have been far more erratic and dramatic when compared to other corporations in the top 500 (figure 12).
While the average income for Pilbara-based corporations segment has declined over the past year, the rate of decline has slowed—and the average value of their asset holdings has increased slightly by 1.4 per cent—from $7,692,251 in 2014–15 to $7,801,365 in 2015–16.
Notes
- Department of Industry, Innovation and Science, Office of the Chief Economist, Resources and Energy Quarterly, March 2016, figure 2.11, p. 25.
- ibid, figures 2.13 and 2.14, p. 26.
- Geoscience Australia, Australian Atlas of mineral resources, mines and processing centres, Iron Fact Sheet, viewed 6 July 2016; Britt, A., Summerfield, D., Whitaker, A., Kay, P., Champion, D., Huston, D., Senior, A., Sexton, M., Roberts, D., Wright, S. and Schofield, A. 2015. Australia’s Identified Mineral Resources 2015. Geoscience Australia, Canberra; Jaireth, S., Summerfield, D. Australian In Situ Iron Ore Resources (Sheet 1: Hematite; Sheet 2: Magnetite), Geoscience Australia, Canberra, 2012.
- Department of Industry, Innovation and Science, Office of the Chief Economist, Resources and Energy Quarterly, June 2017, Statistical data.xlsx, sheet 28.