The Western Australian mining sector, a powerhouse of the national economy, is navigating a complex path towards 2026. Industry experts are forecasting a landscape of contrasts, where traditional heavyweights like iron ore face headwinds, while strategic commodities like rare earths and a potential lithium recovery offer new avenues for growth.
Iron Ore: The Pillar Under Pressure
The outlook for iron ore, the state's most significant export earner, is one of cautious moderation. Analysts from leading firms like Wood Mackenzie and GlobalData point to a projected price decline. Wood Mackenzie forecasts an average price of $US90 per tonne in 2026, down from current levels, while GlobalData's projection sits slightly higher at $US95 per tonne.
This anticipated softening is largely tied to expectations of reduced steel production in China as its economy continues to mature and its property sector adjusts. The focus for major producers like BHP, Rio Tinto, and Fortescue will intensify on maintaining low costs and operational efficiency to preserve healthy margins in a less buoyant market.
Gold's Enduring Shine and Battery Metals' Volatile Path
In contrast, the gold sector is expected to maintain its lustre. Driven by ongoing global economic uncertainty and central bank purchasing, gold prices are predicted to remain elevated, potentially trading between $US2,600 and $US3,000 per ounce by 2026. This environment continues to favour WA's prolific goldfields, supporting both established miners and exploration activity.
The battery metals story is more nuanced. The lithium market, after a dramatic price crash, is not expected to see a rapid return to the record highs of 2022. However, consensus suggests a price recovery is likely as current low prices stifle new investment, while long-term demand from the electric vehicle revolution remains intact. The key for WA's lithium miners will be surviving the short-term volatility to position for the next growth phase.
Rare Earths: The Strategic Frontier
Perhaps the most strategically significant forecast is for rare earths. With global powers seeking to diversify supply chains away from China, Western Australia is poised to become a major player in this critical sector. Projects like Iluka Resources' Eneabba refinery and Lynas Rare Earths' operations are central to this vision.
Government support, both federal and state, through initiatives like the Critical Minerals Strategy, is actively accelerating project development. By 2026, WA is expected to have moved significantly up the value chain in rare earths, processing ore into more advanced materials essential for high-tech and defence manufacturing.
The overarching theme for WA mining in 2026 is diversification and resilience. While the iron ore windfall may ease, the state is strategically building capacity in the critical minerals that will power the global energy transition and modern technology. Success will depend on navigating price cycles, maintaining a competitive cost base, and leveraging its geological endowment and established expertise to secure investment in new commodity frontiers.
