This was published 8 months ago
The WA companies that boomed and bombed in 2023
By Peter Milne
Normally, the saying is you need money to make money, but in WA it seems you need ore to make more.
Andrew Forrest’s Fortescue shook off concerns about high executive turnover and a hyper-ambitious move into green energy to achieve a 42 per cent hike in its share price in 2023.
Iron ore mining remains the financial backbone of WA.Credit: Rio Tinto
It all happened in the last four months of 2023. From a near low for the year, the iron ore stock rose 50 per cent, adding nearly $11 billion to the wealth of Forrest, his now ex-wife Nicola Forrest, and their charity Minderoo.
Not a bad way to shake off a year of near-endless negative press.
The boost came from massive rebound in the price of the steelmaking ingredient since August, driven by a resurgence in Chinese demand. It also helped the share price of the two out-of-towners that dominate WA iron ore: BHP and Rio Tinto rose 11 and 18 per cent respectively thanks to end-of-year rallies.
The fortunes of Australia’s richest person, Gina Rinehart, have no doubt soared as well but the latest results from her private company Hancock Prospecting for the 12 months to June missed the iron ore price surge and showed a profit dip to $5.0 billion, down from $5.8 billion the year before.
And Rinehart’s wealth will take a dent from her foray into lithium.
In September and October she snapped up almost 20 per cent of Liontown that was in the final stages of a takeover by US battery chemicals giant Albemarle. It appeared her interest killed the deal and pushed Liontown’s share price from almost $3 a share she was paying to as low as $1.24, losing Rinehart an estimated $400 million.
Holders of Liontown scrip did enjoy a 34 per cent rise in value during 2023 to $1.65 a share, but are likely rueing not selling to Rinehart when they could.
Liontown’s chair Tim Goyder, who was briefly a billionaire when the Albemarle deal looked likely, had to go to investors and the banks to fund the development of the company’s Kathleen Valley project.
All resource projects in WA are pressured from rising costs as demand for workers exceeds supply.
Employment services provider APM – that rare thing, a large WA-based company that does not move rocks – also suffered from a tight labour market as there were fewer unemployed people needing its help. Once a market darling, its share price halved in 2023.
It was a smoother but downward ride for old-school energy stocks.
The share price of Woodside, the biggest Australian company that produces oil and gas, slipped 12 per cent last year as the prospect of long-term high gas prices from Russia’s invasion of Ukraine faded.
Chevron, the company that produces the most Australian oil and gas, suffered a similar fate with a 14 per cent dip.
The share price of Chris Ellison’s Mineral Resources that has ambitious forays into the entire troika of products powering WA’s economy – iron ore, lithium and gas – ended the year down seven per cent.
It was a mixed bag for other big WA-based miners you hear less about because they don’t have high-profile billionaire bosses.
Scrip in diversified South32 lost 15 per cent of its value in 2023 while shareholders in gold miner Northern Star saw their investment grow 23 per cent.
In November Melbourne-headquartered Newcrest, which runs the Telfer gold mine in the Pilbara, was swallowed by US gold giant Newmont. The Colorado-based miner that also owns the Boddington gold mine 100 kilometres south-east of Perth had a less successful year than Northern Star, with its US share price dropping 17 per cent.
Fellow American Alcoa, which mines more than 70 per cent of its bauxite in WA, had a tough time with investors due to delays to approvals to clear more jarrah forest.
Its share price more than halved from its January announcement of the delays to mid-December, when it won a reprieve from the Cook government, after which the price jumped 40 per cent by year-end. The aluminium specialist still ended 24 per cent down for the year as it faces years of mining lower-grade ore.
Entering 2024 there will be plenty of surprises for the big companies that operate in WA but for many the big three trends to watch will remain China, the energy transition and a stretched labour market.
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