More than 170 years after the first Australian gold rush, a new mining boom is kicking off in regional New South Wales.
- High gold prices have seen a shuttered mine reopened in a different way
- The prices are also thought to be driving a jump in exploration for the metal
- But it is no guarantee of increased mining activity in the long term
Soaring gold prices appear to be driving renewed interest in exploration, with a near-record level of licenses granted this year.
The most recent data from the Australian Bureau of Statistics showed expenditure on gold exploration nationally was up more than 19 per cent on the previous quarter.
Existing central west operations, like the Cadia mine near Orange, Northparkes project and Cowal mine near West Wyalong all planned to expand or increase their processing rate.
It has also seen the paused Mineral Hill Mine, 60 kilometres from Condobolin in central west NSW, restart operations — but not in the traditional manner.
Instead of mining deep below the surface, the old tailings dam, built in the 1980s, is being dug up and gold is being extracted.
The waste product of that secondary process is then being pumped into a new, modern tailings dam.
“Fundamentally what we’re doing is taking a waste product that was unrehabilitated and turning that both into revenue and putting that into a tailings dam that’s engineered to 21st-century standards,” he said.
And it is all possible thanks to the growth of the price of gold.
“We’ve got a resource of 1.8 million tonnes of historic tails that previously were not economic to reprocess,” Mr Merrell said.
With the gold price consistently set at more than $US1700 an ounce, it made the project “economic”.
Since operations recommenced in September, eight bars have been poured and stamped.
Each is worth around $250,000, weigh around 16 to 18 kilograms and are around 25 per cent gold, with the remainder silver.
Rising prices drive ‘exploration boom’
Mineral Hill mine’s owners are not the only ones keeping a close eye on the price of metals.
Mining analyst Dr Sandra Close said “gold’s going great guns”.
“There’s been interest, and then interest wanes, and then it comes back again. But this one has certainly been considerably heightened interest,” Dr Close said.
The NSW government is experiencing increased demand for exploration licences.
The deputy secretary of mining, exploration and geoscience, within the Department of Regional NSW, Georgina Beattie, said there was an “exploration boom happening right across Australia at the moment”.
Demand for licences for gold, critical minerals and high-tech metals reached a ten-year high last year.
So far this year, more than 226 applications have been granted or approved — the highest figure since 2008, and only the third time it has passed 200 in two decades.
However, exploration does not guarantee successful mining.
“The average time it takes for a discovery to go from exploration to mining is around ten years,” Ms Beattie said.
“The strong interest in exploration that we have at the moment is really promising, and we anticipate there will be some good discoveries in NSW that will turn into mining projects,” she said.
Fuelling rural economies
For regional communities, mining can be good news for jobs and local economies.
Lachlan Shire Council Mayor John Medcalf was not worried about any potential collision course with agriculture.
“I think [mining is] going to be the future here, even though agriculture’s been important, and always will be, but mining is something that I think we can sustain, and it’ll be a great resource for Lachlan Shire,” he said.
For now, the focus at Mineral Hill is on extracting gold from the old dam, which will eventually see it completely removed.
“We’ve got 1.8 million tonnes to process, that will take us just under three years, in that process we’ll generate somewhere roundabout 42,000 recovered ounces,” Mr Merrell said.
“We’ll use a portion of the profits we get from that to do further exploration and the idea is to get this mine site going back into hard rock,” he said
But the buzzing exploration industry could make that challenging.
“We’re finding it extremely difficult to find people to work here, because there’s just so much activity going on.