The 2021 Deloitte WA Index has revealed mining companies have added significant value to the state’s total market capitalisation.
According to the WA Index top 20, the top three entities with the largest market capitalisation increases were all resources companies. Piedmont Lithium boosted its market capitalisation by 1737 per cent, which is sitting at $1.15 billion on the ASX at the time of writing.
Resources companies in the WA Index top 100 also saw significant growth, with Venturex Resources growing its market capitalisation by 2722 per cent. The company’s market capitalisation is currently sitting at $530.61 million.
Deloitte Western Australia assurance and advisory partner Dave Andrews said despite criticism for Western Australia’s strict management of COVID-19, companies have seen record growth.
“Our weighting to the commodity price upswing has seen WA companies fair well and while all observed markets achieved growth this year, the WA Index outperformed the broader ASX All Ordinaries, US S&P 500, FTSE 100 and the Nikkei 225 through the year to June 30,” Andrews said.
“While local restrictions have placed significant challenge on our local companies in managing rostering, hygiene and distancing protocols and retaining skilled labour, the economic rebound from the COVID-19 pandemic has been powerful.
“Most notably, the market capitalisation of WA Index participants has not just bounced back, rather, catapulted to record highs in May 2021, and settling at its penultimate best at the end of June 2021.”
The market capitalisation of Western Australian-listed entities reached $239.9 billion in the 2020-21 financial year, marking a 46 per cent increase from the 12 months prior.
New technology minerals and iron ore demand contributed to the rise in market capitalisation.
Deloitte stated that iron ore grew by 112 per cent to $US216 ($292) per tonne in this year’s index, with Fortescue Metals Group growing its market capitalisation by 68.5 per cent.
Fortescue and Wesfarmers’ market capitalisation make up almost $140 billion of the Deloitte WA Index’s total value as of June 30, 2021.
Minerals driving clean energy technology such as nickel, cobalt, zinc, lead, aluminium and copper saw strong price rises that drove up the value of companies mining and exploring these materials.
“The performance of some of these companies really highlights the importance of WA companies at a time when concerns for the national economy have been front and centre across the country,” Andrews said.
According to Deloitte, the top three companies in the WA Index top 20 for market capitalisation included Piedmont Lithium (1732 per cent increase), Liontown Resources (761 per cent increase) and Chalice Mining (752 per cent increase).
The three companies with the largest market capitalisation growth in the WA Index top 100 included Venturex Resources (2722 per cent), Vulcan Energy (2653 per cent) and Eagle Mountain Mining (993 per cent).