Western Australia budget: lithium charging drives growth

The surge in mining costs is expected to support Western Australia's return to surplus, and the country's iron ore spot cattle will complement the growth of emerging lithium.

Australian Finance Minister Ben Wyatt said yesterday that 15 waves of lithium-based developments planned or under construction across the state - designed to benefit from the global boom in electric vehicles and lithium batteries - represents a potential investment of about $4.7 billion in the state.

Although iron ore prices remain the biggest determinant of national wealth, the contributions of other mines in the state are exploding. In 2016-17, other commodities other than iron ore contributed US$ 564 million to the state's earnings but jumped to US$ 724 million in 2017-18. It is expected to climb to US$ 834 million in 2018-19.

As the government tries to curb spending growth, the extra income will bring the state closer to entering the debt burden after the sudden end of the last mining boom.

The increase in revenue from other commodities was mainly due to the rapid growth of the state's lithium industry. Lithium created a $24 million royalty in 2016-17 and is expected to provide $131 million in royalties in 2018-19.

This growth reflects the current strength of the gold industry, which is the goal of Mr. Wyatt's failure to increase royalties last year.

Mr. Wyatt warned the gold industry in his speech yesterday that the government still believes that the increase in royalties is justified. "The Liberal Party and the Kuomintang both prevented this small increase, and its net impact was around $14 per ounce.

“Since then, the price of gold has risen by $142 per ounce, completely undermining the claim that raising interest rates will hurt the industry and cost work,” he said.

"Although the government does not intend to reintroduce the increase in royalties in this year's budget, we believe that raising the tax rate is still reasonable."

Although the mining sector has avoided any new enforcement measures, the state's miners have been asked to take some new measures.

Mining apartment rents will increase by 6% to recover the $10 million annual cost of the WA Exploration Incentive Program. The industry will also lose exemptions from the construction and construction industry training fund levy, which will generate approximately $25 million in annual retraining and apprenticeship training.

According to the budget document, China-owned magnetite miners CITIC and Angang will continue to receive financial assistance from the state. The income of the duo is 50% and extended to the end of 2018.

The company's loss of magnetite business assistance was valued at $31.5 million.

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