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from the January 12, 1994 edition New Gold Mining Activity Surges Ahead in Australia
Catherine Foster, Staff writer of The Christian Science Monitor
SYDNEY— AFTER several sluggish years, the Australian gold industry is
seeing an upturn. But analysts are careful not to call it a boom. ``I'd say it's more of a resurgence,'' says John Cairns, gold
analyst, of the Australian Bureau of Agricultural and Resource
Economics. ``It's regaining the strength it had.'' No matter what it is called, just try to find a drilling rig for
rent in Kalgoolie, a Western Australia mining center. ``Nine months
ago, you could get a discount rate,'' Mr. Cairns says. ``Now you
can't get a rig.'' In South Australia, the number of applications for exploration
licenses has tripled in the last nine months. ``We currently have
167 licenses in place,'' says Ric Horn, director of mineral
explorations for the South Australia Department of Mines and
Energy. ``The last time we had that many was 1986.'' A just-completed magnetic survey in South Australia of 197,000
square miles has revealed four prospective new mineral areas
containing gold, nickel, zinc, lead, and copper. ``The new data has identified provinces or terrains not known
before because of the 30 to 100 meters of sand coverage over
prospective rocks,'' Mr. Horn says. ``Once we're able to see below
that, we've identified potential not seen before.'' Kanowna Belle, a mine north of Kalgoolie in Western Australia
has just opened. ``That was an area people went over many times
before,'' says Steven Gerhardy, an economist with the Chamber of
Mines and Energy in Perth. ``In fact, the town of Kanowna used to
be gold producing and became a ghost town. But explorers using new
techniques going deeper came across this fairly major resource.'' Spending is growing Spending on exploration in the quarter ending in September was
$101.1 million, the highest level since the end of 1989. Cairns
says companies plan to expand their exploration budgets further. ``We have a high level of exploration interest due to success in
finding economic ore bodies in Australia,'' Cairns says. ``In
conjunction are the recent higher prices and high level of
efficiency in management in exploration, mining, and
mineral-processing stages.'' Australia, with 234 tons production, this year became the
world's third largest gold-producing area, after North America (477
tons) and South Africa (601 tons), pushing out the Commonwealth of
Independent States. The movement can be attributed to Australian companies becoming
more efficient during a decade of low gold prices, the low exchange
rate for the Australian dollar, as well as to new exploration
techniques. Gold prices have had a turbulent year. After hitting a
seven-year low of $326.30 an ounce in March, gold has once again
begun to rise. Prices rose 26 percent to $407 an ounce in August,
then fell back a bit. Gold has closed recently at about $384 an ounce. Overseas investors, especially from South Africa, are taking a
closer look at Australia because of concerns over potential changes
in land ownership laws in South Africa. ``Australia still presents a tremendous opportunity for
underdeveloped resources,'' says David Galloway, research manager
at McKinley Wilson, an investment house. A few complications Australia historically has been an attractive place to operate
mines because of its stable politics, good infrastructure, and
favorable investment policies compared to many developing
countries. But much has changed in Latin America and Southeast Asia. Many
resource-rich countries in those regions are growing rapidly and
are siphoning off the new investment that is available from outside
sources. The new Aboriginal land-rights legislation has provided another
complication. It has left the industry concerned about negotiations
with Aborigines over access to land.
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