Mining activity in the Kimberley has a long history, commencing with the discovery of gold near Halls Creek in 1885. Construction of an iron ore mine on Cockatoo Island began in 1944, with the first shipments of iron ore made in
1951. In the 1980s, diamonds and zinc/lead deposits were discovered and mines were commissioned at Argyle (diamonds) and Cadjebut (zinc/lead). Further exploration for a variety of resources, including gold near Halls Creek, continues.

In 2004/05, the top five mineral and petroleum commodities in the Region were diamonds, nickel, iron ore, crude oil and rock. The Region's total mineral and petroleum production was valued at $660.6 million. This was an increase of 12 per cent compared to the previous year. The Region currently contributes 2 per cent of the State's total mineral production by value.

During the seven years from 1995/96 to 2002/03, the total value of mineral and petroleum production increased by 55 per cent to $948.5 million. Value declined in 2003/04 due to the temporary closure of zinc and lead mining at the Lennard Shelf, near Fitzroy Crossing. However, the Region's mineral production was boosted in 2004/05 by the commencement of the new Sally Malay nickel project, located near Halls Creek. This has translated into a 12 per cent increase in the value of production for 2004/05 from the $591.3 million in 2003/04.

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Diamonds
In 2004/05, the Kimberley Region produced 22.8 million carats of diamond valued at $467.5 million, 92 per cent of which were produced by the Argyle Diamond Mine in Wyndham- East Kimberley. The rest came from Ellendale Diamond Mine in Derby-West Kimberley.

The volume of diamond production in the Region in the past year has fallen substantially (30 per cent) from 32.5 million carats down to 22.8 million carats. However, the increase in the average price helped offset declining production to ensure the value only fell by a relatively modest 10 per cent. Diamonds remain the Region's dominant mineral commodity, accounting for 71 per cent of the Region's total value of mineral production in 2004/05.

Rio Tinto's Argyle Diamond Mine (ADM) remains a leading world producer of diamonds, producing 99.6 per cent of Australia's lower-grade diamonds and approximately 25 per cent of the world's diamonds by volume. Small volumns of high quality diamonds are also produced. The company's main plant was commissioned in 1985 at a cost of $430 million, and is located south east of Kununurra near Lake Argyle.

In December 2005, Rio Tinto approved ADM's proposed underground mine development. The US$760 million block cave underground project is expected to extend operation from 2007 to about 2020.

Kimberley Diamond Company's Ellendale mine is another major diamond operation in the Region. The Ellendale Lamproite field is located 130km east-south-east of Derby. Mining operation commenced in mid-2002 and production is expected to increase following the expansion of the diamond production facility in Ellendale Pipe 9.

Exploration of additional diamond prospects at Blina, Beta Creek and North King George and marine diamonds to the north of Wyndham continues. It is highly likely that rapid expansion of the Kimberley's offshore oil and gas will occur over the next few years, necessitating further infrastructure development to service the industry , at appropriate locations.

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Nickel
In 2004/05, total nickel production was valued at $122.5 million, consisting of 757 tonnes of nickel concentrate valued at $112.3 million and 321 tonnes of cobalt by-product valued at $10.1 million. The construction of the Sally Malay nickel project, 120 kilometres north of Halls Creek, was completed in early 2004. The project consists of an open-cut and underground mining venture with the ore processed at a capacity of 750,000 tonne per annum. Bulk nickel/copper/cobalt concentrate is transported by road to the Port of Wyndham for export to China. The $50 million project is estimated to have a life of 5.5 years and employed around 150 personnel during construction, with 120 employed during operation.

Iron Ore
Iron ore mining in the Kimberley occurs on Cockatoo Island, 140 kilometres north of Derby. The site previously produced 68 million tonnes of high-grade iron ore between 1959 and 1993 when it was operated by BHP-Billiton. All of the iron ore mined in the Region is exported and in 2004/05 was valued at $39.7 million. Iron ore mining on Koolan Island is expected to recommence production in late 2006. The mine will amalgamate five previously mined pits into three active pits and construction of associated infrastructure will include a new port.

A potential iron ore resource to the south of Kununurra is being examined and if further developed it would create a major expansion of activity at Wyndham port.

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Oil and Gas
Oil production currently occurs in the Canning Basin, east of Derby at the Blina/Boundary and Sundown/West Terrace/Lloyd well sites. In 2004/05, 37,740 tonnes of crude oil were produced at an estimated value of $14.7 million. This is a relatively small percentage of Western Australia's total production of over $5.2 billion. However, the Canning Basin is a highly prospective area for onshore petroleum and remains one of the most under-explored sedimentary basins in the world.

The Region has large reserves of petroleum and gas at offshore locations in the Browse and Bonaparte basins. Exploitable reserves of petroleum in the Browse Basin include Brecknock, Alliance (Brecknock South), Torosa (Scott Reef), Brewster and Ichthys. Known gas reserves in the Browse Basin are at 31 trillion cubic feet. There are also large reserves of petroleum and gas in the offshore Bonaparte Basin north of Wyndham at Tern, Petrel (subject to test drilling), Blacktip and Turtle. Other offshore fields included Laminaria East, Buffalo, Elang-Kakatua, Bayu-Undan, Jabiru and Challis/Cassini as well as numerous proposed fields (see inside cover map).

The Port of Broome is currently being used as a supply base for offshore oil and gas exploration activities. The geographic proximity of Broome to major offshore oil and gas exploration permit areas in the Browse Basin makes it an ideal location for rig servicing and supply logistics. Continued infrastructure development at the port provides increased capability and capacity to meet the needs of an expansion of the industry.

Zinc and Lead
Zinc and Lead were major contributors to the Region's mineral production. In 2003/04, the Kimberley produced 48.5 per cent of Western Australia's total value of zinc and over 94 per cent of Western Australia's total value of lead. Lead and zinc are usually found together in deposits and therefore the same operations that produce zinc also produce lead as a co-product. Both minerals were mined in the Lennard Shelf operation, south-east of Fitzroy Crossing from 1988. However, in late 2003, the operation was placed on care and maintenance. A decision to restart the mine would depend on the outcome of redevelopment studies as well as market conditions.