The gleaming speckled bar is only the size of a chocolate block, but it weighs more than a brick and is worth almost $400,000.
This gold bar was processed at a plant near the historic central Victorian town of Maldon, and was extracted from more than 300 tonnes of rocky ore that was trucked in from the High Country.
A gold bar from Kaiser Reef’s production facility in Maldon, Victoria.Credit: Joe Armao
The price of gold is soaring, and miners in Victoria now hope to ramp up production to cash in on international demand.
Global conflict, political instability and demand for jewellery are among the factors driving up the gold price. But the precious metal is increasingly being used in digital products too, including mobile phones and renewable technologies, adding to its allure.
The price of gold recently hit an all-time high, passing $4000 an ounce for the first time last month. This week, it hit $4260 an ounce, compared with $2504 at the start of 2022, though it dipped slightly after the US election.
Since the gold rush of the 1800s, the metal has been an important part of the Australian economy. Monash University resources engineering professor Mohan Yellishetty said Australia had the largest known share of gold reserves in the world. While Western Australia is the biggest producer of gold, Victoria’s industry has potential for expansion.
Extracting gold from ore in Maldon. Credit: Joe Armao
Yellishetty said Australian miners were reducing their carbon emissions per tonne of ore processed, but increased mining activity overall meant total emissions were going up. Yellishetty, who has received some funding from the mining industry for his research, said miners in Australia were digging deeper for gold, which also raised challenges such as disposing greater quantities of waste rock.
“In Australia, we’ve got gold standards for our mining operations,” he said. “But you still have that element of risk when you’re dealing with massive quantities of waste streams.”
Toxic substances, including cyanide, were still being used to process gold, Yellishetty said, which needed to be disposed of carefully due to the high pollution risk.
However, he insisted that gold mining was a necessary part of the world’s renewables future because it had so many uses – from industrial applications to dental implants. Gold is useful because it is a good conductor of electricity and is malleable and resistant to corrosion.
Elizabeth Lewis-Gray at the processing plant in Maldon.Credit: Joe Armao
Gold processing, which involves extracting the metal from an ore, has also traditionally required vast amounts of water. Elizabeth Lewis-Gray, co-founder of mining equipment design and manufacturing company Gekko Systems, said the industry was too dependent on clean water – particularly in drought-prone Australia.
“We have to be better,” she said.
Together with her husband and company co-founder, Sandy Gray, she has created new machinery that recovers the metal from the ore using “dirty” recycled water rather than freshwater, which is widely used in the sector at present.
The machinery is now in operation at the Kaiser Reef processing facility in Maldon, where the yellow metal is separated from ore that is dug up from the A1 gold mine in Jamieson, 200 kilometres north-east of Melbourne. Gray said the new machinery would help gold processors to reduce their freshwater use by up to 30 per cent.
Sandy Gray inspects gold processing in Maldon. Credit: Joe Armao
“Rather than using freshwater, we can recycle the water they’re already using,” she said. “That’s really important for a place like Maldon.”
Gray said their new technology also meant there would be less water sent to tailings dams, which hold refuse produced during the mining process.
Sandy Gray, who developed the recycled water device, said conventional machinery typically used centrifuges that could become clogged with dirty water. He has instead developed a particulate seal that allows dirty water to pass through.
Australia is one of the world’s leading producers of gold, with production hitting 293.8 tonnes in 2023. China was the biggest producer with 378.2 tonnes, followed by Russia with 321.8 tonnes.
Dylan Morgan (left) and a colleague inspect the mine in Maldon where goldmining will soon resume. Credit: Joe Armao
Mining company Kaiser Reef is also preparing to resume mining operations at its mine near the processing plant in Maldon. The company’s processing manager, Dylan Morgan, said the mine, which runs to a depth of 350 metres, had been in “care and maintenance” since 2018, when mining operations ceased.
He said gold was half the price when the mine was last in operation. Now, the high value of gold meant it was economically viable to resume operations.
Mining gold, like any other mineral, can be inherently dangerous. Earlier this year, a man died and another suffered serious injuries at Victory Minerals’ Ballarat Gold Mine when part of it collapsed.
However, Morgan said his company had an exceptional safety record, which included the safe use of cyanide in gold-processing. “Everything can be done safely if you do it right,” he said.
Perth Mint depository general manager John O’Donoghue said uncertainty ahead of the United States election and conflict in the Middle East had been among the factors pushing up the price of gold. He said central banks had also sought to buy more gold in the past 18 months.
“When the [financial] markets have been unstable and in a period of flux, gold has always been a safe-haven asset,” O’Donoghue said.
Some of the gold extracted from the Kaiser Reef processing facility. Credit: Joe Armao
He said demand for gold for jewellery manufacturing and fabrication was high in China and India, but the metal was also crucial in products including mobile phones and computers.
Perth Mint buys gold from mines across Australia, including Kaiser Reef in Maldon. O’Donoghue said the mint also bought gold from consumers selling their jewellery, which was particularly popular with gold prices so high.
“We’re seeing some elevated demand for that service at the moment. People are cashing in and taking advantage of the higher prices.”
ANZ commodity strategist Soni Kumari said gold prices had risen 30 per cent so far this year. Although Australian gold production had fallen slightly due to adverse weather, lower grades and unplanned outages since 2023, he expected mine production would increase next year.
“Technology is creating a new demand for gold-backed financial products and making it easier to invest,” he said.
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