Cook says magnetite will make WA the ‘California of Australia’

• Australian Financial Review
• MAY 20, 2024
• Reporter – Tom Rabe

West Australian Premier Roger Cook is eager to capitalise on the shift of political and economic power across the Nullarbor, saying his state’s ore riches would fuel a future built on green steel, making it the “California of Australia”.

The Labor leader said Peter Dutton’s attack on billionaire miners via his opposition to the Albanese government’s $14 billion production credit plan would backfire in WA, where Andrew Forrest, Gina Rinehart and others are viewed as major employers, not just Rich Listers.

“The state is moving forward,” Mr Cook told The Australian Financial Review. “My vision for WA is that it should be the California of Australia, we should be a significant player in terms of the national economy and I know that’s been looked upon by those over east with great jealousy,” he said ahead of the Financial Review Mining Summit in Perth on Wednesday.

While acknowledging the state’s vulnerability to a major downturn in iron ore demand, Mr Cook said WA’s future in resources was not just linked to battery minerals, but also to a different variety of iron ore largely overlooked by our mining industry: magnetite.

Magnetite has for years played second fiddle to haematite, the mineral mined mostly out of WA’s Pilbara and responsible for the state’s billions of dollars in royalties. However, the unfashionable cousin is emerging as the preferred basis for green steel, and Mr Cook knows WA has boundless quantities.

“If you say the future for steel is green steel, well then the future for Western Australia is still by and large based around those iron ore resources. It’s just that we will pivot more to a magnetite base, it’s a higher-value product,” Mr Cook said.

“What’s more exciting is the opportunity to process the magnetite, utilising renewable energy to create green steel precursor products, briquettes, things like that, and exporting that, which is a much higher-value product that creates many more jobs.”

Almost a year after taking the top job following his firebrand predecessor Mark McGowan’s shock resignation, Mr Cook has noticed an urgency within WA business and government circles to take advantage of the unprecedented surge of capital and economic power into the state.

Mr Cook said eastern state frustration with the goods and services tax distribution was the manifestation of “tired old power structures” pushing back against WA’s emergence as a leading economy.

“I think the tired old economies, and the tired old power structures on the east coast, will continue to push back on WA – the GST is one manifestation of it. We make no apologies for our ambition and our sense of urgency,” he said.

“Despite the fact that we’ve locked in the no disadvantage clause in relation to the GST arrangement, they still whinge and moan about how hard their lives are.”

The key to WA’s long-term economic success lies in its capacity to diversify an economy that is almost entirely dependent on the export of iron ore, Mr Cook said. Almost $10 billion of WA’s $11.2 billion in mining royalties was sourced from iron ore in 2023-24.

‘There’s a huge sense of urgency’

Mr Cook said he viewed federal Opposition Leader Mr Dutton as a threat to WA, given the party’s hawkish position on the state’s No. 1 customer, China. He said the Coalition had made a grave misstep by opposing the Albanese government’s production tax incentives.

Attacking mining billionaires doesn’t work in WA, Mr Cook said.

“When you attack billionaires, the subtext of that is ‘We’re not going to back the mining industry’ and Western Australians, hundreds of thousands of them, work in the mining industry, or the resources sector, or work for companies that service them,” he said.

As BHP considers its future in nickel mining in WA amid a downturn in prices that has prompted the closure of several other operations across the state, Mr Cook conceded he was anxious about the implications of the Big Australian powering down its smelter in Kalgoorlie.

“We’ve recently passed legislation so that they can bring in third-party feedstock, [but] obviously if they don’t put in the investments there, we don’t have those opportunities for third parties to bring their ore in for smelting,” he said.

Closing in on his first anniversary in the top job, Mr Cook said he had felt the pressure to ensure he didn’t fumble the opportunity.

“It was like jumping on board a fast-moving train. You do have a sense when you get into these roles, you don’t want to break it. We need to maintain momentum,” Mr Cook said.

“If you look around, walk up and down the Terrace at the moment, everyone’s ambitious, and there’s a huge sense of urgency. We’ve got a role in government to make sure we match that.”

As for his predecessor’s style as antagonist-in-chief of east coast premiers, Mr Cook said the villain role didn’t come as naturally to him, but he enjoyed the jealousy his state’s success elicited among his counterparts.

“When I walk into national cabinet meetings, when I go into any sort of national forums, people sort of say, ‘Ah, here you come, here’s WA, you’re going to regale us again about how good it is in WA’,” he said.