Rising gold price helping miners dig NSW out of recession
There’s gold in them thar NSW hills and Australia’s miners believe it will help them dig us out of a coronavirus led economic slump.
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Apprentice fitter and turner Toby Whyte holds up the 7.8kg gold bar and murmurs “there’s a lot of money in my hands.”
At 73 per cent purity the bar is worth $542,000 to be exact, easily enough to buy the 17-year-old a new house in his home town of West Wyalong in the Riverina.
But Mr Whyte believes he has struck gold already — landing an apprenticeship straight from school in Evolution Mining’s Cowal gold mine 350km west of Sydney.
“I’ve been pretty lucky. I heard about the apprenticeship at the last minute and applied,” he said. “It’s great. You are in among the dirt and grease all day.”
Mr Whyte is not alone in seeing the opportunities offered to NSW by the jump in price of rare metals since the start of the coronavirus.
The gold price has jumped by almost 40 per cent to break through the $US2000 mark. Silver has doubled and demand for copper, cobalt, scandium and nickel is strong.
What it means, according to NSW Minerals Council chief executive Stephen Galilee, is that our miners could literally dig us out of the COVID-19 led economic recession.
“Mining operations are providing much-needed jobs and economic activity for communities right across regional NSW during this pandemic,” he said.
There are currently 11 mining projects awaiting approval in the NSW planning pipeline which would involve a capital investment of $6.9 billion and deliver more than 5,500 jobs.
These include the Bowdens Silver Project near Mudgee, which would see $150 million invested to develop the largest silver deposit in Australia and create 350 new jobs, and the $1 billion expansion of Newcrest’s Cadia gold operation near Orange.
“These new projects can deliver even more investment, jobs and economic growth to help regional NSW in the years ahead,” Mr Galilee said.
The NSW Minerals Council’s most recent annual member Expenditure Survey found 28 mining companies pumped $13.7 billion into the NSW economy including almost $9 billion on goods and services from suppliers.
“Billions are being spent by mines on wages for workers and with local supplier businesses, highlighting the important economic role mining is playing on the road to recovery from the COVID-19 pandemic,” Mr Galilee said.
Councils are also benefiting.
“As regional communities across NSW continue to deal with the economic impacts of COVID-19, many local councils in mining regions are being heavily supported by rates and other revenues from local mining operations.
“In NSW, mining companies paid over $250 million in rates and other contributions to local councils over the last five years, and in some places contribute up to half of total rates received,” he said.
Shane Oliver, chief economist at AMP Capital, said rising prices and demand for commodities including gold and copper was a good sign for economies worldwide.
“Mining is important for regional areas because it supports the wider community. When they are getting paid more they spend more money in the community,” he said.
Leeanne Davies, owner of Davies Automotive and Industrial in West Wyalong, won the contract to supply the Cowal Gold Operation with tools and parts a year ago.
“We have been in drought for five years and with COVID as well this contract has certainly helped us through that,” she said.
“They could get these supplies from anywhere but they choose to buy locally, from the town where a lot of the miners live, which is keeping the money and the jobs here too. We are advertising for another couple of people,” she said.
Cowal Gold Operation general manager John Penhall said: “It’s certainly an exciting time to be in gold, but we don’t run our business on the guarantee of a high gold price. Our key priority is to operate safely, then we focus on increasing our productivity, while controlling costs.
“We have a number of projects and planned development proposals underway, or pending approval, which is exciting.”
One of those workers excited about the prospect of Evolution Mining accelerating development of an underground mine at its existing open cut Cowal gold mine is truck driver Lara Stibbard.
“People think the worst of mining straight up without knowing what goes on and the amount of rehabilitation we do,” said Ms Stibbard, 29. Or the enormous benefit to the economy.
“I pretty much went straight to the mine from school and worked my way up to driving one of the ‘little’ excavators,” she said. By little she means a giant 200 tonne truck.
She has just returned to work after having a baby with partner Alex Doyle, a local sheep farmer.
“I didn’t think I would be able to return to the mine after having a baby but they have been very supportive.
“I love the variety of the work and the fact that we are producing pretty cool gold bars — I never thought I would ever say that I am a gold miner.”