This section provides analysis for the Northern Territory's (NT’s) mining and manufacturing industries. It explores activity for a range of commodities, minerals, manufactured products and exports. Mining and manufacturing activities that take place in the NT include mining of metal ores, petroleum production, quarrying and mining of non-metallic minerals, as well as the manufacturing of a wide range of products for both domestic and overseas consumption.
The Northern Territory’s (NT’s) mining and manufacturing industries decreased by 0.2% in 2017-18 to $4.13 billion (inflation adjusted). The modest decline reflected a 3.1% decrease in the manufacturing industry to over $965 million, partly offset by a 0.8% increase in the mining sector to $3.2 billion.
Mining and manufacturing contribute to the NT economy through international trade, private investment and employment. The mining and manufacturing industries also have a significant impact on the NT’s construction industry as mining and manufacturing projects generally require significant levels of construction activity.
In 2017-18, mining and manufacturing accounted for 16.4% of NT economic output. Of the two industries, mining (which includes petroleum and liquefied natural gas (LNG) production) is the key contributor to the NT economy (Chart 1), and contributed 12.9% to the NT’s gross state product (GSP) in 2017-18 compared to 8.2% nationally. The manufacturing sector accounted for 3.5% of GSP over the same period, compared to 5.8% of the gross domestic product.
In 2018-19, mining and manufacturing employed an average of 6,916 NT residents, representing a decline of 25% compared to the previous year. The decrease was driven by a 35% decrease in mining industry employment and a 13.1% decrease in the manufacturing industry. This accounted for 5.2% of the total NT workforce. Nationally, mining and manufacturing increased by 2.1% in 2018-19 and accounted for 9% of total national employment (Chart 2).
These figures may be an underestimate of the resident workforce employed on mining and manufacturing projects in the NT as some jobs attributed to the construction industry are likely related to mining projects. Both industries also employ large numbers of fly‑in fly‑out (FIFO) workers from interstate, who are not included in the NT’s official employment figures. According to the 2016 Census, there were around 8,700 FIFO workers in the NT, with the majority of those employed in mining and mining-related industries (such as construction). This was a significant increase from 5,200 FIFOs employed in the NT as at the 2011 Census, in part reflecting the substantial overall workforce employed in the construction of the Ichthys LNG project, a large number of whom are FIFO, which will make a significant contribution to the NT’s mining output when it commences production.
The NT’s mineral producers sold $4.5 billion worth of commodities in 2017-18, a 23.8% increase from 2016-17 in current prices (Table 1). The majority of mineral commodities produced in the NT are metallic, including gold dore (a mixture of gold and silver), manganese, zinc/lead concentrate (including individual concentrates), bauxite, and uranium (Chart 2).
The NT also produces a range of non-metallic minerals such as diamonds, rock, sand, gravel and quicklime, however these only contributed 1.1% of the total value of mineral commodities sold in 2017-18.
The NT’s metallic mineral commodities are predominantly exported overseas, (with the exception of gold dore production, much of which is transported to the Perth mint for processing).
More detailed information about movements in commodity prices and exchange rates is outlined in the International trade section of this website.
Map 1: Current and pending mineral and onshore petroleum production in the NT1
1 This map is produced from various sources. Department of Treasury and Finance cannot guarantee the accuracy,currency or completeness of the information. To be used as a guide only.
Source: Department of Primary Industry and Resources, Department of Treasury and Finance.
Manganese is one of the raw ingredients used in the manufacturing of steel and production is largely driven by global steel demand. It is produced on Groote Eylandt and at the Bootu Creek mine, near Tennant Creek. The NT’s manganese production in 2017-18 was valued at $2 billion, a 33.0% increase compared to the previous year, increasing production from both operating mines.
Gold is currently produced in the Tanami region (the Granites gold mine) and in the Barkly region (Edna Beryl mine). Gold has also historically been produced around the Pine Creek region in the Top End. Most gold is produced in the form of gold dore, which is transported to the Perth Mint in Western Australia for refining into gold bars.
Following an 18.2 per cent decline in 2016-17, the value of gold and gold dore production in the NT increased by 7.9% over the year from $723.6 million to $780.5 million in 2017-18. The increase was mainly a result of increased production volumes from the relatively new Edna Beryl mine, as well as improved production at the Granites mine. The value of gold production in 2017-18 was also supported by improved prices over the year.
Zinc and lead are produced at the McArthur River mine, located 65 kilometres southwest of Borroloola, in the form of a combined zinc/lead and silver concentrate as well as individual zinc and lead concentrates. The value of total zinc and lead production (including individual concentrates) in 2017-18 was $932.9 million, a 43.5% increase from $650.0 million in 2016-17. The strong increase reflects improved production levels at the McArthur River Mine, following a decline in the previous year. The increase in production was driven by a 15.1% increase in the price of lead and a 25.5% increase in the price of zinc in 2017-18.
The NT’s bauxite is produced at the Rio Tinto mine at the Gove peninsula and at Gulkula mine in Northeast Arnhem Land. Bauxite is the primary mineral used in the manufacture of aluminium.
The value of bauxite production in the NT increased by 16.2% to $524.9 million in 2017-18, from $451.8 million in 2016-17, reflecting an increase in demand.
Uranium is produced at the Ranger mine, which is located within the boundaries of the Kakadu National Park. Total value of production at the Ranger mine was $220.1 million in 2017-18, a 16.2% decrease from $262.8 million in 2016-17. Following the curtailment of open-cut mining in 2012, production has been attributable to the running down of stockpiles. The mine will cease operations in January 2021. Energy Resources Australia released their mine closure plan in June 2018, which outlines their expectation to continue to run down existing stockpiles until the January 2021 closure date, and to have completed final rehabilitation and closure activities by January 2026.
Non-metallic mineral production decreased by 5.5% in 2017-18, the fourth consecutive year of decline, reflecting reduced demand from the construction industry for raw materials.
In 2017-18 there was new production of diamonds, garnet sands and ilmenite, which helped to offset the decline from more traditional non-metallic minerals such as crushed rock and gravel. Diamond production commenced in 2016-17 at the Merlin Diamond Mine, near Borroloola, with the first sales in the 2017-18 financial year. Production of ilmenite recommenced at the Sill80 mine near Mataranka in late 2017, and is expected to continue to increase in the near future.
Petroleum production in the NT includes the extraction of crude oil, condensate and natural gas, as well as the production of LNG, which makes up a large proportion of the NT’s overall production. Onshore petroleum production in the NT occurs mainly in the Amadeus Basin around the central Australia region and at the Darwin LNG plant, located at Wickham Point. The NT’s offshore petroleum production comprises operations in NT and jointly administered waters, such as the Joint Petroleum Development Area (JPDA) (Map 2).
The NT produces oil both onshore, in Central Australia, and offshore, in the Timor sea. Offshore oil production attributed to the NT in 2016-17 was at the Montara and Laminaria‑Corrallina oilfields. Oil produced offshore is exported directly from the fields for overseas trade. This activity is evident in the NT’s international exports data, though its reporting may be limited by confidentiality constraints. The value of the NT’s offshore petroleum oil exports decreased by 17.9% to $175.4 million in 2017-18.
Following the suspension of production at the Surprise oilfield in 2015, the NT’s onshore oil production is solely from the Mereenie oilfield, located west of Alice Springs. The majority of the oil produced there is transported to South Australia for processing to be sold to domestic customers as well as for export overseas. In 2018, total onshore oil production decreased by 10.2% compared to the previous year (Chart 3).
The NT’s onshore conventional gas is produced from the Amadeus Basin, Dingo and Mereenie gas fields, located in the Central Australia region. The NT’s onshore gas production increased by 23.5% in 2018. This was the fifth consecutive annual increase in the NT’s onshore gas production reflecting increased demand for gas, particularly for the Owen Springs power station near Alice Springs and the Pine Creek power station.
The Northern Gas Pipeline was completed in late 2018, providing overland access to the eastern Australia gas market. Anticipation of the pipeline’s completion has led to several developments in the Mereenie and Palm Valley gas fields in 2018. Interstate gas exports through the pipeline commenced in January 2019.
The NT has a number of offshore gas reserves in NT waters and in the jointly administered JPDA (Map 3). Current offshore NT gas production is located at the Bayu‑Undan gas field in the JPDA, the Blacktip gas field near the NT and Western Australia border and, as of late 2018, the Ichthys gas field, 220 km off the coast of Western Australia. Gas produced at the Blacktip gas field is transported by pipeline to an onshore processing plant in Yelcherr, near Wadeye, for domestic consumption, supplying the Darwin‑Katherine power network. Gas from Bayu‑Undan in the JPDA is transported by pipeline to the ConocoPhillips LNG plant for processing. Gas from the Ichthys gas field is transported by pipeline to the INPEX LNG plant for processing.
LNG production is the largest manufacturing activity in the NT and total goods exported, however, is included in the mining industry classification by the Australian Bureau of Statistics (ABS). In 2018, LNG production at the ConocoPhillips LNG plant increased by 4.7%. Production at the INPEX LNG plant is currently not available.
Map 2: Petroleum activity1
1 This map is produced from various sources. Department of Treasury and Finance cannot guarantee the accuracy, currency or completeness of the information. To be used as a guide only.
Source: Department of Treasury and Finance.
The NT produces a wide range of manufactured goods, the most prominent of which is helium, as well as smaller scale manufacturing such as steel fabrication, wood, paper and food. The NT’s manufactured goods production contributed $965 million to GSP in 2017-18, in real terms. This was a 3.1% decrease from the previous year.
The NT’s manufacturing industry is markedly different to the national industry, with little manufacturing in the NT occurring in traditional factory environments and instead is driven by manufacturing related to the resources and construction industries. Following a period of strong growth through 2009-10 to 2011-12, the NT’s manufacturing industry has steadily declined over the past few years, reflecting lower demand for construction materials.
The manufacturing industry employed an average of 3,642 persons in the NT throughout 2018-19, below the 10 year average of 4,041 persons. The manufacturing industry accounted for 2.8% of the NT’s total resident employment in 2018-19. This was lower than the national manufacturing industry, which contributed 7.1% to Australia’s total resident employment.
Helium is extracted from gases during LNG refinement and is manufactured at the BOC Darwin helium plant, which is next to the Darwin LNG plant located at Wickham Point near Darwin. The plant in Darwin is the only liquid helium processing plant in the southern hemisphere and produces helium to meet Australia’s domestic demand as well as for export overseas. Helium is used in the medical, electronic, space and defence industries.
The Australian Agricultural Company (AACo) abattoir in Livingstone had been producing boxed beef, however facility closed in August 2018, and as such, while there are smaller abattoirs operating in a number of small communities, meat processing is expected to play a much smaller role in NT manufacturing into the future. More detailed information on boxed beef production can be found in the Agriculture section of this chapter.
Other manufacturing activities are supported by domestic construction activity, which generates demand for local manufacturing such as timber products, steel fabrication and concrete structures.
The NT’s mining and manufacturing industries’ data are reported together for the purposes of this publication as ABS includes the gross value added of manufactured LNG in the mining industry classification. Mining and manufacturing activities in the NT include mining of metal ores, petroleum production, quarrying and mining of non-metallic minerals, as well as manufacturing of a wide range of products for both domestic and overseas consumption such as concrete, wood chips and food products. The NT’s mining industry data also includes offshore petroleum production in NT waters.
Analysis of the components of this industry is informed by a number of different data sources, including the ABS, information published in company reports and data provided by the Department of Primary Industry and Resources.
The NT has a number of offshore gas reserves in NT waters and in the jointly administered JPDA (Map 3). Current offshore NT gas production is located at the Bayu‑Undan gas field in the JPDA and Blacktip gas field near the NT and Western Australia border. Gas produced at the Blacktip gas field is transported by pipeline to an onshore processing plant in Yelcherr, near Wadeye, for domestic consumption, supplying the Darwin‑Katherine power network. Gas from Bayu‑Undan in the JPDA is transported by pipeline to the ConocoPhillips LNG plant for processing. Gas from the Ichthys gas field is transported by pipeline to the INPEX LNG plant for processing. Royalties from resources production in the JPDA is split between the Commonwealth and East Timor, however, the ABS allocates the Australian portion of production to the NT for reporting purposes.