Australia - Mining Introduction
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Australia is the world's third largest producer of gold, ABARE reported output of 285.0 tonnes (9.2 million oz) in 2001 a decline of 4% from 296.4 tonnes (9.5 million oz) in 2000. Western Australia alone provides almost 70% of the production.

Gold was first discovered in Australia on the Macquarie river near Bathurst, New South Wales in 1851 by Edward Hammond Hargraves. The same year further discoveries were made at Ballarat and Bendigo in Victoria. By 1856 output was 95 tonnes (3.05 million oz). See gold rushes or Library - Gold Rushes.


Sunrise Dam operation, Western Australia. Gold processing plant,
from which 50% of recovery is through the gravity process
(Credit: courtesy AngloGold)

New discoveries were made by Paddy Hannan at Kalgoorlie in Western Australia in 1893. Along Kalgoorlie's famous Golden Mile over 1,500 tonnes (48.2 million oz) have been extracted since 1893. By 1903 Australia's output was 119 tonnes (3.8 m oz), a record not broken until 1988, for gold mining slowly declined.

By 1980 output was only 17 tonnes (0.5 million oz). Not a single mine on Kalgoorlie's Golden Mile was open, yet by 1990 it had soared to 244 tonnes (7.8 million oz).

The renaissance came not just through a higher gold price triggering fresh exploration that found new deposits, but by the pioneering of a whole new infrastructure of mining finance, complete with gold loans, hedging and the adaptation of new technology to create mobile milling and carbon-in-pulp recovery plants that could be transferred easily from one open pit to another.


Sunrise Dam operation, Western Australia. Gold bearing ore being loaded on 120 tonne
trucks for transportation to the ROM (Run of Mine Pad) where ore is stockpiled by grade
(Credit: courtesy AngloGold)

Low grade open pits, which could be brought quickly into production and often turned a profit within a year, were the heart of the boom that ultimately took Australian production to a new record of 313 tonnes (10.1 million oz) in 1997. It set the pattern for a fundamental new alliance between miner and bullion banker, which was swiftly copied in North America, Africa, Indonesia and Latin America.

Declining gold prices in the 1990s, although mitigated by weakness in the Australian dollar, have led to sharp cuts in exploration and consolidation among mining companies. The cash costs of major Australian companies at the end of 2000 were US$191 per ounce, and total costs at US$245.


Pine Creek. Union Reefs gold mine - View of the 120m deep
cross course pit which will be mined to a final depth of
240m at an average grade of 1.7g/t
(Credit: courtesy AngloGold)

Tax was not levied on gold mining until 1991, but is now at a corporate rate of 36%. Consolidation in the global gold mining industry gathered a lot of momentum in 2001, with several mergers and acquisitions initiated and concluded during the year and into the first months of 2002. Newmont secured control of Australia's largest producer, Normandy, while the country's number two producer, diversified miner WMC Ltd, implemented its decision to divest of its gold assets with the sale of two mines to Gold Fields Ltd from South Africa. As for the local miners, Delta Gold and Goldfields merged at the end of 2001 to create AurionGold, meanwhile, Sons of Gwaila strengthened their production profile thanks to the acquisition of PacMin Mining's Tarmoola and Carosue Dam mines.