Executive Summary: Western Australia’s Resources Sector in Transition: Securing long term value in a changing world

Executive Summary

Western Australia’s prosperity has been shaped by one of the most remarkable resource endowments in the world.

Over the past several decades, the state’s resources sector has transformed it into a global economic powerhouse. Resources now contribute around $195 billion to the state economy, account for almost 44 per cent of economic activity, support hundreds of thousands of jobs across Australia and generate billions of dollars in public revenues each year. The sector underpins exports, wages, regional development, public services and living standards, and provides substantial economic benefits well beyond WA’s borders.

Yet the environment that delivered this prosperity is changing.

The global economy is entering a period of profound structural transformation. Decarbonisation, technological disruption, geopolitical fragmentation, changing trade relationships and intensifying competition for investment are reshaping resource markets and industrial strategies around the world.

For Western Australia, these developments present both opportunity and risk. The state is exceptionally well positioned to benefit from growing demand for critical minerals, decarbonisation and renewable technologies and lower-emissions industrial products.

Western Australia possesses globally significant reserves of lithium, rare earth elements and other minerals central to the energy transition.

At the same time, the state’s prosperity remains highly concentrated. Iron ore continues to dominate exports and public revenues.

This report examines how WA can capitalise on these opportunities, while at the same time mitigating risks. Drawing on new modelling, scenario analysis and evidence from Australia and abroad, the report explores the contribution that WA’s resources sector makes to the economy, the structural forces reshaping its future and the policy choices available to strengthen resilience and secure long-term value.

A central message emerges.

The greatest challenge facing Western Australia is not resource depletion. Nor is it whether resources will remain important to the economy. The challenge is ensuring that finite natural resources continue to generate enduring economic, social and fiscal value in a changing world.

Future prosperity will depend increasingly on how effectively Western Australia converts resource wealth into broader economic capability, industrial competitiveness, innovation, public value and intergenerational prosperity.

The next phase of prosperity will depend less on what the state extracts from the ground and more on how much value it creates from what it extracts.

Key Findings

• The resources sector contributes close to $200 billion each year, underpinning jobs, exports and government revenue.
• Iron ore generates around $126 billion in output and more than 80 per cent of WA’s royalty revenue, highlighting exposure to a single commodity.
• Four in every five export dollars earned by Western Australia come from trade with China.
• The sector supports around 700,000 jobs nationally and generates approximately $241 billion in economic activity across Australia.
• Resource companies contribute almost 40% of total company tax revenue in Australia.
• Critical minerals, processing and value-added industries could exceed $100 billion annually by 2050, up from around $20 billion today under an accelerated scenario.
• Mining and petroleum royalties delivered almost $10 billion last year, accounting for around 20 per cent of State revenue.
• Fiscal policy settings can materially alter long-term public value capture, with differences measured in billions of dollars over the life of major projects.
• Future growth will be driven by value, not volume. The next phase of prosperity will depend on capturing more value from resources through processing and downstream industries.

Read the full report