Minerals and Energy
- Gross Regional Mining product was valued at $356M in 2016-17
- Mining and Petroleum sales have declined in recent years with the closure of iron ore mines (Koolan and Cockatoo Islands) and ramping down or cessation in diamond production at Argyle and Ellendale mines respectively.
- Future prospects are strong with Sheffield Resources Thunderbird mineral sands (zircon & titanium) and Northern Minerals Heavy Rare Earth Minerals coming into production.
- Improvements in the global oil price have initiated production restart on existing onshore oil fields.
History of Kimberley Mining
The Kimberley region has a long history of mining activity, commencing with the discovery of gold in Halls Creek in 1885 which led to a brief gold rush, opened up the east Kimberley, the port of Wyndham and the establishment of a number of cattle stations.Continue reading
Western Australia’s resources industry grew significantly over the past decade due to unprecedented overseas demand, which resulted in a mineral production and revenue increase from $27.9 billion in 2002-03 to $105 billion in 2016-17.Continue reading
In 2016-17, the Kimberley’s total mineral, oil and gas production contracted by around 70% with approximately 90% of value from diamonds and gold, then other precious metals, base metals and construction materials as shown in the chart below. All commodities declined in volume and value except gold, silver and gems.
Kimberley Production by Commodity Share 2016-17
Iron ore production previously dominated the mineral production values in the Kimberley. The dramatic decline is due to the closure of iron ore mines on Cockatoo and Koolan Islands, which had averaged over the previous decade annual production value of $340 million, however, these are expected to reopen in 2018 once port facilities are again functional. Similarly, mines going into ‘care and maintenance’* in 2016 led to 90% decrease in copper, cobalt and nickel.Continue reading
The value of minerals produced in the Kimberley has been fairly volatile as production is dependent on world demand. Geographically the Shire of Wyndham East Kimberley produced the greatest value of minerals ($270 million) in 2016/17, followed by the Shire of Halls Creek ($81 million), the Shire of Broome ($4 million) and the Shire of Derby West Kimberley ($1 million).
Source: Department of Minerals and Petroleum and Department of Regional Development, Mineral Production in Western Australia Adjusted for Petroleum 2016/17.
Iron Ore has been a valuable mining commodity with ore bodies on the Kimberley islands in the Buccaneer Archipelago of a very high grade. Recent closures of iron ore mines have impacted the Kimberley community and economy, however, operations may recommence in the future pending market / economic conditions and overcoming access issues to the Koolan Island pit due to inundation.Continue reading
Pluton Resources Cockatoo Island ceased production in 2015 (due to insolvency) and ore pit filled with seawater in October 2016 after the power supply for the de-watering pumps was discontinued.
While the Kimberley is famous for producing rare pink (Argyle) and yellow (Ellendale) diamonds, the outlook is for gradual reduction in the industry and production with the:
- Kimberley Diamond Mine at Ellendale closed in mid 2015 and remains in care and maintenance;
- Argyle Mine in transition to shut down mode in 2020
The east of Broome, the Ellendale Mine diamond mine which produced 50% of the worlds yellow diamonds closed in mid 2015. Recent exploratory drilling further to the east has identified new prospective and is considered a significant discovery by a global miner.
New Prospects, New Investment in Regional Projects
Mineral sands include Titanium dioxide and Zircon products used in the manufacture of paints and plastics, ceramics, sunscreen, toothpaste, artificial joints and welding rods.
The Sheffield Resources Thunderbird Project is large-scale, long-life mineral sands mining and processing project located on the Dampier Peninsula located halfway between Broome and Derby, north west of the Great Northern Highway.Continue reading
Current plans include up to 100 jobs during construction through to processing production and the development of export capability through the Derby Port using ‘ship-loader’ infrastructure previously used for lead and zinc exports. With local contractors and a number of local aboriginal employees, Thunderbird has commenced initial approved earthworks in January 2018. First production is planned for the second half of 2019.
Heavy Rare Earth Elements
Heavy Rare Earth Elements (eg Dysprosium, Lutetium and Terbium) are important elements in the manufacture of modern electronics, medical imaging, permanent magnet motors of wind turbines and hybrid vehicles in renewable energy technology.Continue reading
Energy – Oil and gas
Major resource companies have invested heavily in Western Australia to increase production of liquefied natural gas (LNG) for Asian markets with combined Ichthys and Prelude capital expenditure in WA of $31.6B. In the last decade, investment in LNG export capacity is at record highs, but remains susceptible to global changes in demand linked to oil and shale gas prices.Continue reading
However, the offshore extraction and processing of natural gas and the allied industrialisation of the Kimberley led to widespread protest and divided Broome. Consequently, gas processing trains are now located in the Northern Territory or floating LNG vessels. Floating LNG on Prelude is now hooked up and commissioning complete for start up in Q3 2018.
There is significant global interest in developing predominately onshore Canning Basin gas reserves and these projects could make significant positive impact on the Kimberley economy with resident service and operational workforces.
Most onshore oil and gas in the Canning Basin is shale gas and considered ‘tight’. Deposits in such geology require hydraulic fracturing or fracking to enable commercial extraction. Fracking is controversial in the Kimberley (as in southern regions) and campaigns by environmental groups have impacted the social licence for production and exploration ventures. In September 2017, the WA Government implemented a moratorium on fracking while a scientific enquiry is conducted in 2017-18. This ban applies during exploration and production for existing and future petroleum titles in the Kimberley.
Buru Energy is operating the Ungani conventional oilfield in the Canning Basin recommenced shipping crude oil out of the Wyndham Port in June 2017. Production ramped up from 1000 barrels per day (BOPD) in Q2 2017 to 1500 BOPD in Q4 2017 with a target of 3000 BOPD in Q2 2018. Buru Canning portfolio includes the Blina oil field east of Broome which went into care and maintenance after suspension of operations in February 2013.
Page last updated: Tue Aug 7 2018 3:47:43 PM
Don't hesitate to call the Kimberley Development Commission with any queries or comments.
7 Ebony Street (PO Box 620)
Kununurra Western Australia 6743
T: +61 8 9148 2100
F: +61 8 9168 1473
Upstairs: Cnr Napier & Dampier Terrace (PO Box 172)
Broome, Western Australia 6725
T: +61 8 9194 3000
F: +61 8 9193 6142
Derby Western Australia 6728
T: +61 8 9194 3000 (Broome)