Salmon Gums, Western Australia

The first potential use of a townsite was as a watering spot for the proposed Esperance to Norseman Railway,[2] since Salmon Gums is roughly halfway between these two towns. Land for a town-site was set aside in 1912 and the name was recommended in 1916. This land lay within the tribal boundaries of the indigenous Kalaako. The town was gazetted in 1925, when the Esperance to Salmon Gums section of the railway was completed.[5]

Settlement of the area received a boost after the First World War when returning soldiers were given grants of land[6] in this and many other areas around the state. These grantees became known as soldier settlers. At the time Salmon Gums was regarded as being on the fringe of arable land. The low soil fertility and marginal average rainfall of 341mm meant that yields were poor prior to the 1950s. As a result, the land was not in high demand, so the opportunity cost to the government was quite small.

Agricultural research was boosted prior to the Second World War by the establishment of the Salmon Gums Research Station.[6] In 1949 a similar station, the Esperance Downs Research Station was established near Esperance. Research at the latter quickly led to the discovery that soil in the Esperance region was deficient in trace elements, reportedly phosphorus, copper and zinc, and the addition of these greatly improved fertility and crop yields.[7] Since then the region, including Salmon Gums, has become a successful producer of wheat, sheep and cattle.

In 2001 a Perth-based iron ore company announced an investigation into a large lignite deposit at Salmon Gums for use reducing its phosphorus-rich iron ore currently being mined at Koolyanobbing. As of 2009 all plans for the mining of the lignite has been suspended indefinitely due to the stock market collapse in early 2009. The sudden drop in oil prices would make the refinement of the oil suspended in the lignite financially unviable.