Gold

 Gold (Au) is a yellow metal that has a high density, is a good conductor of electricity and heat, is malleable and has a lustre that is considered attractive. Gold has a significant historical role in Australia, with the first gold rush of 1851 drawing tens of thousands of immigrants from many parts of the world to the Australian colonies. The principal uses for gold are as an investment instrument for governments and central banks and for private investors, with jewellery accounting for most of its annual usage. The main industrial use of gold is in the electronics industry, which takes advantage of gold's high conductivity and corrosion-resistance properties and small amounts are present in most modern electronic devices. Gold is used also in dentistry because gold alloys are strong, resistant to tarnishing and easy to work.

Gold usually occurs in its metallic state and is commonly associated with sulphide minerals such as pyrite, but does not form a separate sulphide mineral itself. Most gold mined in Australia today cannot be seen with the naked eye. It is very fine grained and mostly has a concentration of less than five grams in every tonne of rock mined. Primary gold deposits are formed from gold-bearing fluids at sites where the chemistry and physical characteristics permit gold deposition. Gold that is liberated through weathering is concentrated in alluvial (placer) deposits such as those that sparked the rushes of the 1850s, but these are no longer major sources in Australia. Gold is also found as a minor component in many base metal deposits and is recovered as a by-product at some smelters and refineries.

Demand for gold has exceeded world mine production for many years and has necessarily relied on recycling, sales by investors and, until recently, sales by central banks. Over much of the past two decades the central banks have sold down their stocks of gold. However, since early 2010, these banks have become net purchasers of gold to augment their reserves. The World Gold Council has noted that, in particular, the central banks of many emerging nations are maintaining a high percentage of their reserves in gold.

Australia's economic gold resource is almost 10 000 tonnes and total JORC resources are almost 15 000 tonnes. Total JORC resources are significant for gold as the industry mines material from all categories in the scheme and not just published ore reserves. Australia is the world's second largest producer, after China.

While these results are relatively strong, industry activity has been under pressure as indicated by a downturn in exploration expenditure and the greater difficulty companies are having in raising capital on the stock exchanges. These pressures relate directly to the gold price which exceeded US$1800/oz briefly in 2011, fluctuated around US$1650/oz through 2012, but collapsed below US$1300/oz in April 2013 which is below the 2010 price of US$1440/oz . The sustained higher gold prices through 2010 and 2011 coincided with expanded mining operations, the upgrading of mills and renewed operations at mines previously on care and maintenance. In contrast, the past nine months has seen the postponement of some planned plant expansions and the closure of half a dozen high-cost mines.

Gold occurs, and is mined, in all states and the Northern Territory (Figure 3.12) with about 43% of resources occurring in Western Australia (Figure 3.13). The Yilgarn Craton in Western Australia is Australia's premier gold province with major Archean greenstone-hosted deposits such as Kalgoorlie, Granny Smith and Boddington. South Australia's Gawler Craton hosts the major iron oxide-copper-gold-uranium Olympic Dam deposit and the Northern Territory hosts the world-class, low-sulphide, quartz vein Tanami deposit. Australia's eastern states host many substantial gold deposits in a range of styles and provinces including Forsterville in Victoria (quartz-vein related), Cadia in New South Wales (porphyry gold copper) and Mount Carlton in Queensland (epithermal). The discovery of the Tropicana deposit (5 million ounces of gold) in the Albany-Fraser Belt of Western Australia highlights the potential for major new gold discoveries in Australia. Ongoing exploration suggests that Tropicana may be the first discovery in a new gold province.

Figure 3.12 is a map of Australia showing the names, locations and size of major gold deposits (i.e., those with more than 30 tonnes of in situ resources). The map also shows the state boundaries and capital cities as well as the major geological provinces of the country. Gold deposits are displayed as filled yellow circles split into six sizes according to the total in situ resources of gold. The six sizes are labelled '30 to 50 tonnes', '50 to 100 tonnes', '100 to 500 tonnes', '500 to 1000 tonnes', '1000 to 3000 tonnes' and 'greater than 3000 tonnes'. In addition, some circles are drawn with a heavy black line indicating that these deposits are operating mines. The map shows that Western Australia hosts the greatest number of significant gold deposits in Australia, all within Archaean or Proterozoic rocks. Olympic Dam in South Australia is the only deposit with more than 3000 tonnes of gold, again hosted by Proterozoic geology. Proterozoic geology also hosts gold in Queensland and the Northern Territory. Gold deposits in New South Wales and Victoria are hosted by Ordovician rocks with a large concentration occurring in the Cadia Valley near Orange

Figure 3.12 Australia's major gold deposits based on total Identified Resources.
Source: Geoscience Australia.

Resources and Reserves

Table 3.17 Australia's resources of gold and world figures as at December 2012.
Units JORC Reserves (% of EDR) Economic Demonstrated Resources (EDR) Paramarginal Demonstrated Resources Submarginal Demonstrated Resources Inferred Resources Accessible EDR Mine Production in 2012 World Economic Resources World Mine Production in 2012
Source: Geoscience Australia, the Bureau of Resources and Energy Economics and the United States Geological Survey; Paramarginal and submarginal demonstrated resources are subeconomic at this time; t = tonnes; Moz = million ounces.
t 4119 (42%) 9909 372 122 4571 9879 251 54 300 2660
Moz 145.3 349.5 13.1 4.3 161.2 348.5 8.9 1915.4 93.8

Figure 3.13 comprises two pie charts side by side. The one on the left shows the percentage of Economic Demonstrated Resources (EDR) of gold held by each state and territory in Australia as at December 2012. The chart on the right shows the percentage of total gold resources held by each state and territory in Australia as at December 2012. Western Australia has the most gold EDR with 43% followed by South Australia with 28%, New South Wales with 18%, Queensland with 5%, the Northern Territory with 4% and Victoria and Tasmania with 1% each. The proportions held by each state and territory of total resources is almost identical.

Figure 3.13 Percentages of Economic Demonstrated Resources and total resources of gold held by the states and territories in Australia. Total resources comprise all Demonstrated and Inferred Resources. Numbers are rounded so might not add up to 100% exactly.
Source: Geoscience Australia.

World Ranking

Table 3.18 World economic resources for gold.
Rank Country Gold (t) Percentage of world total
Source: United States Geological Survey and Geoscience Australia; Figures are rounded to the nearest hundred tonnes; Percentages are rounded so might not add up to 100% exactly; t = tonnes.
1 Australia 9900 18%
2 South Africa 6000 11%
3 Russia 5000 9%
4 Chile 3900 7%
5 Indonesia 3000 6%
6 Brazil 2600 5%
7 Peru 2200 4%
8 China 1900 3%
9 Uzbekistan 1700 3%
10 Ghana 1600 3%
  Others 16 700 31%
  Total 54 500  
Table 3.19 World production for gold.
Rank Country Gold (t) Percentage of world total
Source: United States Geological Survey and the Bureau of Resources and Energy Economics; Percentages are rounded so might not add up to 100% exactly; t = tonnes.
1 China 370 13%
2 Australia 251 9%
3 United States of America 230 8%
4 Russia 205 7%
5 South Africa 170 6%
6 Peru 165 6%
7 Canada 102 4%
8 Indonesia 95 3%
9 Uzbekistan 90 3%
10 Mexico 87 3%
  Others 1096 38%
  Total 2861  

Trends

Gold EDR has increased steadily since 1975 with a clear increase in the rate of growth since 1983 (Figure 3.14). Much of the increase can be attributed to the successful introduction of carbon-based processing technology that allowed the profitable processing of relatively low-grade ore deposits. In addition, the higher than previous prevailing gold prices (denominated in US$) supported high levels of exploration for gold to the extent that gold accounted for more than half of the total mineral exploration expenditure in Australia for many years. Increased exploration contributed to the increases in EDR.

Figure 3.14 shows the Economic Demonstrated Resources (EDR) of gold from 1975 to 2012. There is one line on the graph. The vertical axis is labelled in tonnes beginning at 0 and in increments of 1000. The horizontal axis is labelled with the year starting with 1975 and ending with 2012. In the graph, the line begins at 155.7 tonnes in 1975 and steadily increases to 394 tonnes in 1983. The EDR of gold then increased more rapidly from this point to 9909 tonnes in 2012.

Figure 3.14 Trends in Economic Demonstrated Resources for gold since 1975.
Source: Geoscience Australia.

Resource to Production Ratio

Table 3.20 Indicative years of gold resources (rounded to the nearest 5 years) as a ratio of Accessible Economic Demonstrated Resources divided by the production rate for each year.
Year 1998 2003 2008 2009 2010 2011 2012
The AEDR/production ratio is heavily skewed by low-grade copper deposits, which have an AEDR/production ratio of 65 years. Lode gold deposits have an AEDR/production ratio of 20 years.
Source: Geoscience Australia.
AEDR/Production 15 20 30 30 30 35 40