The unexpected rise of iron ore prices during the pandemic has ensured the state government has achieved a $1.2 billion surplus.

According to the WA government, the mining sector recorded an operating surplus of $2.4 billion for the nine months preceding March 31, 2020, mainly reflecting the impact of higher than expected iron ore royalty revenue.

The Department of Jobs, Tourism, Science and Innovation reported the monthly value of WA’s merchandise exports reached a record $17.7 billion in March 2020, including $9.1 billion of iron ore exports.

Chamber of Minerals and Energy WA chief executive Paul Everingham says the strict health protocols enabled the resources sector to operate safely and effectively during the pandemic.

He says in the 2019-2020 financial year, the mining and resources sector contributed to a record $9.29 billion royalties to the State Government, which accounted for 28 per cent of all government revenue.

He says even though the pandemic has forced the industry to adapt, the commitment to continuing production safely has allowed the resources sector to “continue to underpin both the State and Federal economies”.

The WA Recovery Plan published in July 2020 describes the mining sector as the backbone of the WA economy, and highlighted the essential role it played in keeping the economy strong throughout the pandemic.

Mining company Element 25 Limited managing director Justin Brown says after the restrictions at the start of the pandemic, the West Australian government’s permit system allowed most workers to operate on the mines.

“Most of the mines in Western Australia were able to maintain operations so from the economy’s point of view, mining definitely played a big role in softening the blow for Western Australia,” he says.

Mr Brown says mining ranked first on this year’s Fraser Institute survey, and buyers want a secure ethical supply, which can be met by Western Australia as the sector is environmentally regulated.

“I think demand here is going to be strong, I think if you look at some companies are getting less enthusiastic about investing in countries like the Democratic Republic of Congo, for example, because of the lack of ethical oversight from the government,” he says.

WA Minister for Mines and Petroleum Bill Johnston says creating jobs is the state government’s priority, therefore is it encouraging to see a record 135,000 employees are working in the resources sector.

“Maintaining our support of the State’s mining and petroleum industries is a key part of the McGowan Government’s Recovery Plan to keep WA in a strong economic position,” he says.

Downhole Surveys general manager Megan Gillies says at the start of the pandemic many projects were expected to be put on hold once the number of coronavirus cases grew, as feared.

However, she says the company has gained more clients and sales have increased, which has left the company unaffected by the global health crisis.

“As scary as the pandemic has been, it really hasn’t rocked this industry because we’ve been able to keep functioning almost business as usual,” she says.  

Ms Gillies believes WA mining is strengthening and the sector is the backbone to both the state and federal economy.

She says even though the gold prices are higher than ever, she “personally is concerned this is an unstable confidence that we have at the moment”.

Iron Ore Research analyst Philip Kirchlechner says iron ore is the number one export product of Australia, and it is mostly produced in Western Australia.

He says the state has a competitive advantage and in spite of weather impacts such as cyclones earlier in the year, the industry has maintained production.

Mr Kirchlechner says this shows the industry is resilient and competitive.

“I think one thing that’s happened in WA and Perth it has become the mining capital of the world in terms of mining technology,” he says.

He says it will ensure unsafe jobs will be conducted by machinery and it will eliminate some jobs, but they will be gained in the technology industry.

“Basically, you know, computer game experts who sit in front of a screen like this, and they actually will manage the mining equipment from here. So, it’s different skills being used,” Mr Kirchlechner says.