Mining, oil and gas - growth drivers in WA index

The increase makes it seven consecutive months of growth for the Deloitte WA Index, and according to Deloitte Perth office managing partner Keith Jones, recent developments in the oil and gas industry, in particular, augur well for further growth for WA business.
“When final investment approval for the $50 billion Gorgon oil and gas project is given by Chevron and its partners it will represent the most significant capital expenditure to be incurred on one project in Western Australia’s history,” Jones said.
“This approval is expected to promote positive growth across the wider contracting, service and support industries in Western Australia.
“We expect to see not only greater interest and focus on the oil and gas industry but positive flow on effects across the WA market. This augurs well for the future growth of Western Australian businesses,” Jones said.
The Mining and the Oil and Gas sectors were the key drivers behind the growth in the WA Index for August, with mining companies collectively increase 6.6 per cent and oil and gas companies by 5.8 per cent. The Index tracks the market capitalisation of companies with Perth as their home exchange.
Movers and shakers within the Deloitte WA Index during August included Herald Resources Ltd, Grange Resources Ltd and Aditya Birla Minerals Ltd, with their market capitalisation increasing by 100 per cent, 62.0 per cent and 52.5 per cent, respectively.
The significant increase in Herald Resources followed an unsolicited off-market takeover offer during the month by Calipso (wholly-owned subsidiary of PT Bumi Resources, owners of 84.2 per cent of Herald). This offer has been rejected by the Independent Directors of Herald Resources.
Grange Resources announced a number of capital raising initiatives, including a one-for-one rights issue to raise approximately $124m, and $29m in placements to major shareholders.
Aditya Birla attributed its increase in share price to the steady growth in the London Metals Exchange copper price over the period, and market reassessment of their copper resources at both the Nifty Copper and Mt Gordon projects.
The major world indices have all recorded positive growth across August. The FTSE gained the most ground with 6.1 per cent growth, the Australian All Ordinaries index gained 5.5 per cent and the US S&P 500 recorded a gain of 4.3 per cent. In comparison the Nikkei increased by a more modest 1.3 per cent.
The commodities market has seen continued positive growth across the board with the strongest growth seen by Copper, Lead and Palladium, up 13.0 per cent, 12.6 per cent and 10.1 per cent, respectively. Other commodity prices to gain during the month included Zinc, Nickel, Silver and Oil up 7.5 per cent, 6.5 per cent, 5.1 per cent and 4.7 per cent, respectively. Platinum and Tin remained relatively consistent with the prior month, with more modest increases of 2.4 per cent and 1.9 per cent, respectively. Both Gold and Uranium recorded virtually nil movement in August.