Record copper sales and soaring commodity prices for gold and iron ore in the second half of 2020 have helped South Australia reach its second-highest year of mining value, the latest State Government figures show.
Figures published last week by the South Australia Department for Energy and Mining show the state’s mineral resource production for the 2020 calendar year reached AUD$7,059,477,619, up from $6.9 billion in 2019. It is only the second time the sector has topped $7 billion in a year and is the second-highest year on record behind the $7.312 billion produced in 2014.
The 2020 figure was achieved despite a struggling oil and gas sector that contributed $1.34 billion compared with $1.65 billion in 2019 and $1.9 billion in the record year of 2014.
Star commodity prices in 2020 were gold, which contributed $952.5 million compared to $554 million in 2019 and iron ore $1.23 billion in 2020 up from $907.3 million in 2019 with both metals benefitting significantly by massive price hikes.
Uranium production in 2020 decreased to $521.4 million from $538.7 million in 2019.
The slide in oil and gas production value coincided with plummeting oil and gas prices in 2020 as global travel ground to a halt during the pandemic.
However, it is also part of a longer-term trend that shows the value of the sector has declined every six months since the first half of 2019 when it contributed $847.6 million through to the $613.5 million it added in the second half of 2020.
Copper continued to be the state’s largest contributor in 2020 with $2.429 billion worth of production. This included $1.35 billion in the second half of the year, which is the highest six-month copper total in the state’s history and bodes well for another strong year in 2021.
Copper prices jumped by 24 per cent in the second half of 2020 despite the increase in the value of the Australian dollar compared to the US dollar. The copper price has surged a further 17 per cent in the first four months of 2021 to more than $12,000 per metric tonne in April.
This has coincided with a 25 per cent increase in copper production at BHP’s Olympic Dam for the nine months to March 2021. South Australia’s largest copper mine produced 100,000 tonnes of copper in the second half of 2020 and a further 55,000 tonnes in the March quarter this year, the highest quarterly production at Olympic Dam in the past five years.
South Australia’s next largest copper producer, Oz Minerals, also reported significant increases in copper production for the second half of 2020 at its South Australian mines at Prominent Hill and Carrapateena.
This was mainly due to the ramping up of production at Carrapateena, which began commercial operation in late 2019.
Other contributors to the 2020 production figures were opals, $17.1 million (down from $18.46 million in 2019), industrial minerals at $277.4 million in 2020 (down from $509.9 million in 2019). Construction materials such as limestone and dolomite were steady at $235 million.
According to figures from the South Australia Chamber of Mining and Energy (SACOME), the State Government received $311 million in mining royalties for the 2019/20 financial year, up from $299 million the previous financial year and $207 million in 2015/16.
CEO of SACOME, Rebecca Knol, said although the 2020-21 State Budget predicted royalties to be $301 million this financial year, it was not yet known how the latest production figures would impact this figure.
“During 2020, the resources sector demonstrated both its resilience as a sector and its importance to the state’s economy,” she said.
“Copper, gold and iron ore were the driving forces behind the growth in 2020 with BHPs Olympic Dam, OZ Minerals Carapateena and Prominent Hill operations and SIMEC’s Middleback Ranges operation collectively contributing to this significant lift in productivity.”
“These results should be sending a very clear message … that the resources sector is in a growth phase and providing well-paid employment in both metropolitan and regional areas.”
Export commodity prices and figures for April recently released by the Australian Bureau of Statistics show that South Australia had $1.321 billion in exports in April following more than $1.1 billion in exports in February and March.
The April figure is the third highest on record behind December 2013 ($1.389 billion) and December 2018 ($1.371 billion) and puts South Australia on track for a record export year in 2021.