The National Museum of Australia credits Edward Hargraves with the first official discovery of gold near Orange, New South Wales in 1851. This kicked off the first Australian gold rush and many new finds.
Ever since then, gold has played a key part in the wealth and development of Australia. This remains the case today, but the future of Australian gold rests on the nation’s ability to find new resources and produce them in a way that’s acceptable to the community and environment.
Gold remains a trusted store of wealth and underpins many global currencies. Perhaps surprisingly, more than 50 per cent of new gold supply feeds the jewellery market.
However, it has many other uses that depend on its unique physical and chemical qualities. For example, small amounts of gold are present in most modern electronic devices.
According to the world gold council, approximately 190,040 tonnes of gold has been mined throughout history. Incredibly, all this gold would fit into a single cube around 21 metres on each side.
In 2018, 317 tonnes of gold was produced across Australia, according to Surbiton Associates, putting it second behind China.
This record-high output was worth $17.3 billion, with the average Australian price averaging $1820 in 2019, more than $100 above its $1711 average in 2018.
New gold discoveries are needed to secure future production
Mining is a non-renewable industry and so every ounce produced must be replaced through new discoveries to sustain production.
“Unlike many other commodities, such as base metals and bulk minerals, the typical life expectancy of a gold mine is relatively short at 10 to 15 years at most,” MinEx Consulting managing director, Richard Schodde, says.
“In contrast, copper and iron ore mines typically operate for two-to-three times longer.
“Given that the average delay between discovery and mine development is around 13 years – and getting longer over time – when a company builds a mine it effectively has to immediately start to find its replacement.”
Mr Schodde is worried that if companies start reducing exploration investment, new discoveries will take longer, meaning companies won’t be able to sustain production.
This would have profound implications for the sustainability of the industry and Australia’s future prosperity in the longer term.
“Unit discovery costs have been progressively rising over time and are estimated to be around $US45 per ounce in 2017, which is almost double what it was in 2007 at $US23 per ounce,” he says.
Based on historical trends, Mr Schodde forecasts that costs will continue to rise at $US10 per ounce per decade meaning the outlook for production and profitability will be a growing challenge.
Explorers are looking for gold under Australia's covered landscape
Mr Schodde believes the need to progressively explore and mine under deeper cover to find gold means that discovery and development costs are set to rise over time.
“By their very nature the grade of gold deposits is several orders of magnitude lower than base metals,” he says.
“The metal of economic interest is present in only trace amounts – often less than one part in a million.”
The subtle chemical and physical footprints of gold deposits makes it difficult to use standard geochemical or geophysical methods to find gold deposits buried under cover.
“What the industry needs are smarter ways of identifying and quantifying the amount of gold that is outside the immediate drill core.
“Cracking this nut will result in more reliable exploration and save money, as fewer holes need to be drilled to determine prospectivity.”
A key challenges is that gold grades have declined over the years
Production grades are declining in most commodities including gold, nickel, copper and platinum.
“The reality is that there has been a drop in the quality of gold grade over many years, which increases the production cost and use of other scarce inputs such as the amount of water and energy,” CSIRO Mineral Resources director, Jonathan Law, says.
“The easily accessible areas of Australia have been explored and exploited – but that only makes up about 20 per cent of the countries surface area.”
But it is not all doom and gloom, far from it, with CSIRO undertaking radical new research to sustain gold discovery and mine development and production.
“There is no reason to believe that the remaining 80 per cent of the continent isn’t equally endowed with a wide range of minerals,” Mr Law says.
CSIRO is leading a program of research to enhance gold exploration efforts through cover to find new, high grade deposits.
This includes innovative approaches to geophysics through deep earth imaging technology to allow geologists to create precise images of subsurface rock properties.
CSIRO are also combining artificial intelligence with indepth geoscience knowledge to use the ever-expanding datasets on Australia’s geology to identify prospective areas and drive exploration decisions.
Understanding gold mineralisation using the latest techniques
Complex patterns linked to mineralisation are often beyond the capability of traditional analysis techniques, but new data analysis tools promise important new insights.
But exploration is just one part of the equation. The ability to accurately characterise resources in order to reduce the risks in developing new mines is also critical.
New data tools means the industry can understand the characteristics of the orebody at a range of scales and then use the information to plan the best downstream options for production. This philosophy is not new, but the tools to deliver and integrate it rapidly with unprecedented detail have the potential to transform mining.
“In addition to new data analysis tools, CSIRO has a strong focus on near-real-time sensing technologies that provide relevant data spanning from the orebody in the ground, to material moving through the process plant and for waste and environmental management,” Mr Law says.
To characterise orebodies, CSIRO has developed integrated borehole characterisation techniques as well as a suite of analytical tools. The Maia Mapper, for example, provides detailed elemental image analyses for ore samples from the micron to metre scale.
CSIRO also spearheaded the development of an X-ray based replacement for fire assay, a 500-year old method traditionally used to analyse gold across the value chain.
X-ray analysis – which offers a much faster turnaround on results – was commercialised through Chrysos Corporation at the end of 2017 and is now offered through Ausdrill’s MinAnalytical in Perth.
Mr Law says CSIRO is also working on a suite of sensors that measure physical properties within a processing plant so that operators can measure, monitor and optimise their unit processes in real time.
Meeting growing community and environmental expectations
Another big challenge for the industry is growing community concerns on the use of cyanide in gold processing. Cyanide is used in more than 90 per cent of global gold production and producers are facing increasingly tough regulations that prevent or restrict its use due to environmental and health concerns.
“We’ve developed an exciting non-toxic, cyanide-free recovery process that is particularly suited to refractory ores that often perform poorly with cyanide,” Mr Law says.
Not only does it offer a greener option, the technology has a lower capital cost than traditional cyanide plants of equivalent size. It was successfully trialled in 2018 with Eco Minerals Research and is close to being commercially available.
These technologies being born out of Australia will benefit the local gold industry and the globe more broadly.
Australia's competitive advantage
“Australia has several key advantages – we have a strong gold endowment, we have excellent geoscience infrastructure and data, and an innovation system that puts us at the cutting edge of mining advances.” Mr Law says.
Producers are in agreement.
“I think there are a lot of benefits from producing gold in Australia,” Evolution Mining group manager for information technology, Peter Abela, says.
“We have sustainable advantages such as our low sovereign risk and the fact that our government and community are generally supportive of the industry.
“We also have a skilled and experienced workforce, great access to technology solutions developed locally and overseas, a large mining, engineering, technology and services community, and well-credentialed research establishments.”
Other advantages that change depending on macroeconomics is the price of gold and the value of the Australian dollar, which are both working in Australia’s favour at the moment.
When asked about what the world could learn from Australian gold innovation, Mr Abela highlights approaches and techniques that improve the environmental outcomes and enhance the sustainability of products and industries.
“This includes digital innovation that helps to optimise the value chain, as well as how a partnership approach between industry and research bodies to collaborate on solutions to industry challenges can enhance the long-term economic, environmental and societal outcomes that can be achieved.”
Evolution Mining applying innovative techniques to treat mine water
Evolution Mining is investigating using CSIRO-developed technologies and constructed wetlands to treat mine affected water at their Mount Rawdon operation near Mount Perry in Queensland.
“The ability of natural wetlands to remove contaminants from water is well known. Physical, chemical and biological processes combine in wetlands to remove contaminants from wastewater in a process called “wetland filtration”, Evolution Mining’s environment superintendent, Sven Sewell, says.
“Wetlands can remove excess suspended particulate matter, nutrients, salinity and heavy metals. This is done by natural mineral and organic components of a wetland such as the wetland plants, sediments and naturally occurring bacteria.”
Evolution is progressing a pre-feasibility investigation into using constructed wetland approach, coupled with CSIRO developed bioremediation techniques and Virtual Curtain technology which uses a synthetic clay to reduce the amount of contaminants in mine water. Australian Wetlands Consulting is also contracted to provide specialist expertise to the project.
This approach could allow Evolution to safely, and cost-effectively, treat water from its Mount Rawdon mine so that it is good enough to return it to the environment via the Perry River.
“If the concept proves viable and we are confident that it is environmentally safe, Evolution Mining will progress to the feasibility stage of constructing the wetland and evaluating its performance in the field,” Mr Sewell says.
Evolution Mining has had its own breakthroughs exploring glycine leaching as a way of more effectively extracting gold at a lower cost and reducing cyanide use.
The use of data analytics and machine learning has helped to optimise their processing plants and improve mining cycle times, while big data techniques are being used to attempt to predict seismic activity underground.
Aside from having world-class resources, it’s this kind of innovative thinking and focus that has set Australia’s gold industry apart from the rest of the world. By continuing to do things smarter, the next 170 years could be just as bright.