Karratha's economic base includes the iron ore operations of the Rio Tinto Group, sea-salt mining, ammonia export operations, North West Shelf Natural Gas Project, Australia's largest natural resource development and the newest Natural Gas Project called Pluto LNG which is situated adjacent the existing North West Shelf LNG facility.
Karratha came into being in 1968 due to the tremendous growth of the iron-ore industry and the need for a new regional centre caused by a shortage of land in Dampier.
Karratha has the largest shopping centre in the Pilbara, Karratha City, which has major food and grocery retailers and department store chains. It was opened in 1986 as Karratha City and expanded in 2005. The centre also serves the neighbouring towns of Dampier, Wickham and Roebourne. There is also a smaller centre, Karratha Village, which has health services including a pharmacy and medical and dental practices. There is only one hospital in Karratha, the Nickol Bay Hospital. The notable feature of the hospital is its wind resistant design due to the threat of seasonal cyclonic activity.