Newcrest Mining - Industry Development

Industry Development

The discovery of gold has been a major contributor to Australia’s economy and infrastructure. Gold mining provided transportation, communication, road and rail and raw material for export around the colonies. This was especially prominent after 1851 in the Victorian goldfields. In the past, Australia has exported gold to the US and Europe, however over time the traditional consumers have changed.

When alluvial gold deposits were exhausted in the 1800s, deeper mines were necessary. Working deep veins necessitated deep shafts, machinery and treatment plants, consequently these required investment. Individual miners were replaced by companies, employing dozens or even hundreds of men. Technology and mapping made gold exploration more accurate and efficient. Australia was seen to have very large mineral resources. This development, together with Australia’s political stability, led to an influx of major overseas mining companies, such as Newmont, in the 1960s.

The emergence of Japan as a major buyer of minerals, combined with technological advances in ore separation, saw a shift in many mines from uneconomic production to sustainable production. By the mid-1980s, one of the few productive mining industries in Australian was gold mining because its price had been fixed since World War II.

Other factors lifted the production in gold, such as the development of the efficient carbon-in-pulp method for recovering very fine-grained and low-grade gold. It became feasible to mine entire zones of gold bearing veins via open cut or underground mining instead of only main veins.

In the 1990s, there was a period of consolidation with extensive focus on further improving efficiency and safety of operations and movement towards globalisation; customers of minerals and metals became more diverse. During this period, the industry continued to be a major source of export income for the Australian economy, despite far-reaching changes in world mineral production and consumption patterns. India and China recently became the top importers of Australian gold because it continues to function extremely well as an inflation hedge. Furthermore, environmental and social concerns in relation to the mining industry have become global with the widespread uptake of new communication technologies.

From a corporate perspective, the Australian mining industry grew beyond being a large national sector into a world player. The industry is now diversified and integrated internationally through its exploration, mining and processing activities, and the supply of information technology, engineering, construction and other services. Annual surveys by the Minerals Council of Australia show that from the mid- to late-1990s, respondents spent over 40% of their total exploration budgets overseas.

The industry is also making a wide range of major investments in overseas mines and forging international marketing and processing alliances in regard to many minerals and metals. However, investment has also flowed in the other direction, with significant overseas investment in Australia for exploration and the development or expansion of mining and processing facilities.