Western Australia, the country’s top resource exporting state, is banking on growing demand for liquefied natural gas (LNG) and the metals needed for the green energy transition to sustain its economy in the coming years, the state’s mining minister said.
The state’s LNG output and revenue will rise to a record this year as production at key export facility Gorgon has stabilised, Bill Johnston told Reuters on the sidelines of Singapore International Energy Week.
Spot LNG prices LNG-AS have soared since the Ukraine war broke out in February with Europe turning to LNG imports following cuts to piped Russian gas supplies.
“I’m of the view, and our customers in Japan and Korea tell us this as well, that LNG will be exported for many years to come,” Johnston said, adding that he’s confident that more gas fields will be developed to supply existing infrastructure.
Western Australia is home to Australia’s biggest LNG export facilities including North West Shelf, Gorgon, Pluto and Wheatstone.
As the gas sources for those facilities dry up, the state is counting on new fields to be developed to keep those LNG plants running at full tilt. Partners in the massive Browse field are looking to supply the North West Shelf LNG plant.
“A number of the equity participants have told us they’re trying to accelerate a decision on that project,” Johnston said.
“I think this is their window and they really need to make the decision to invest now, because I think it’d be much harder for them to secure capital in five or 10 years’ time.”
In mining, Australia, the world’s largest iron ore exporter, is forecast to ship 959 million tonnes of iron ore in 2024 up from 920 million tonnes in 2023, government data shows.
Johnston said he’s confident that demand for iron ore will continue for years to come even as China’s economy shifts focus to services, reducing its need for natural resources, as consumption in India, Indonesia and Africa picks up.
Iron ore prices declined this year because of China’s strict COVID-19 restrictions and as a slowdown in its property sector cooled demand for the steel raw material.
Johnston is also bullish that Western Australia could grow into a big producer of copper, a key metal for electric vehicles, wind and solar farms, and transmission lines.
OZ Minerals OZL.AX recently approved the West Musgrave copper project while Rio Tinto RIO.AX is in the development phase of the copper-gold Winu project in the state’s Pilbara region, Johnston said.
“(The Winu) resource appears to be in the top 20 copper resources in the world and there’s expectation that they will continue to find more copper in that location. So that’s got huge upside,” he added.
Source: Reuters (Reporting by Florence Tan; Additional reporting by Sonali Paul and Praveen Menon; Editing by Christian Schmollinger)