Leslie Massey
Gold is a rare substance with unique chemical and physical properties that make it a valuable natural resource. Australia, with its large gold resources, has a significant opportunity to supply the world's demand for gold. Gold has been a crucial part of Australia's history, with gold rushes in the 19th century spurring the development of towns, communications, transport, and foreign trade. Today, gold continues to be an important export for the country, generating billions in revenue. Australia's gold is primarily sourced from open-cut mines, with the country's gold industry offering various investment opportunities. Gold is also used in a range of applications, from jewellery to electronics and medicine, showcasing its versatility and ongoing relevance.
| Characteristics | Values |
|---|---|
| Gold is rare | Only ~3 parts per billion of the Earth's outer layer |
| Gold is chemically stable | It does not readily combine with other substances |
| Gold is used in jewellery | 51% of global gold usage |
| Gold is used in coins and bars | 25% of global gold usage |
| Gold is used in central bank reserves | 15% of global gold usage |
| Gold is used in electronics and industrial applications | 7% of global gold usage |
| Gold is used in smartphones | Component in smartphones |
| Gold is used in electric vehicles | Circuits in electric vehicles |
| Gold is used in medicine | Coating pacemakers and stents |
| Gold is used in cancer treatment | Gold nanoparticle technology is used to treat cancer patients |
| Gold is used in new antibiotics | Gold compounds are showing promise as a new class of antibiotics |
| Gold is used as an investment | Buying physical gold bullion bars, gold coins, or quality jewellery |
| Gold is used as a safe-haven asset | Gold is a safe-haven asset and a hedge against inflation |
| Gold is used as a monetary exchange | Gold is the basis for international monetary exchange |
| Gold is used in exploration | Gold exploration expenditure was $1.24 billion in 2023-24 |
| Gold is used in exports | Australia’s gold exports generated $24.4 billion in revenue in 2022-23 |
| Gold is used in mining | Australia has a long and proud history of gold mining |
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What You'll Learn
Gold exploration and production
Gold exploration expenditure in Australia was $1.24 billion in 2023-24. The country has a wide range of gold deposit types, as well as one of the largest concentrations of orogenic gold in the world, the Victorian Goldfields. Gold discoveries spurred the development of inland towns, communications, transport, and foreign trade. Many towns have been developed by the wealth from mining gold.
Australia has both open-cut and underground gold mines, but most of its gold production comes from open-cut mines. Excavation equipment is used to dig down to the gold deposit, removing earth and waste rock in the process. The excavated material and ore are then broken down into smaller and more manageable portions. Underground mining is used when the depth of the ore below the surface makes open-cut mining uneconomic. Vertical shafts and declines (spiral tunnels) are used to move people and equipment in and out of the mine, provide ventilation, and haul waste rock and ore to the surface.
Gold's low reactivity makes it safe for use in the human body, for example, to coat pacemakers and stents. Gold compounds are also showing promise as a new class of antibiotics in early-phase clinical studies, meaning gold-containing drugs could form part of our defence against infection. Gold nanoparticle technology is being used to treat cancer patients undergoing chemotherapy and radiotherapy.
Gold is also used in electronics and industrial applications, including smartphones and electric vehicles. It is further used for jewellery, coins, and bars, and as a basis for international monetary exchange.
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Gold as a safe-haven asset
Gold has long been viewed as a safe-haven asset. It has been used as an investment and a store of wealth for thousands of years, far longer than the stock and bond markets. Gold has also been used as a currency for most of human history.
Gold's value is derived from its rarity, durability, and physical and chemical properties. It is chemically stable, does not readily combine with other substances, and is virtually indestructible. Gold does not corrode or rust with age and is easily transportable, making it a good store of wealth for those fleeing political instability or economic collapse.
Gold's performance during times of economic uncertainty and market volatility makes it an attractive choice for investors looking to spread risk and maintain a stable, resilient portfolio. During the 2008 recession, for example, as stock markets plunged, gold surged in value, and investors turned to gold as a safe haven. Similarly, during the COVID-19 market crash in Q1 2020, the S&P 500 fell 20%, while gold gained 24%, peaking at $2,067/oz in August 2020.
Gold's inverse correlation with equities is well-documented. Gold also acts as a hedge against inflation, preserving purchasing power when fiat currencies depreciate. Gold's low reactivity also makes it safe for use in the human body, for example, to coat pacemakers and stents.
However, one expert, Bhanu Singh, believes that investors should take a longer-term approach when analysing gold's suitability as an investment. He argues that gold might not be as safe as investors may think and that a true safe-haven asset should offer both low volatility and predictable returns in all economic circumstances.
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Gold in medicine
Gold has been used in medicine for thousands of years. In ancient times, pure gold was used to treat furuncles, smallpox, and skin ulcers, and to remove mercury from the skin. Some ancient sources also noted that gold could cure joint disease and diseases of the lungs.
In modern history, the use of gold in medicine began with the discovery in 1890 that gold compounds could curb the growth of the bacteria that causes tuberculosis. Gold therapy for tuberculosis was introduced in the 1920s, and it was also used to treat rheumatoid arthritis. Gold therapy proved ineffective for tuberculosis, but it is still used to treat several rheumatic diseases, including psoriatic arthritis, juvenile arthritis, and palindromic rheumatism. Gold is used in medicine because it is chemically inert and does not react with biological systems, making it safe for use inside the body.
Gold nanoparticles are used in rapid medical tests, such as malaria tests, where they help generate a colour change that indicates the presence of malaria in a patient's blood sample. Gold nanoparticles are also used in bioimaging, diagnostics, targeted drug delivery, and photothermal therapy for cancer. Gold nanoparticles can be coated with molecules that help them bind to specific cells, such as cancer cells, aiding in more accurate diagnoses. Gold is also used in medical implants, including teeth, stents, and pacemakers, due to its resistance to deterioration and bacteria.
Gold has also been used in traditional medicine in Japan, India, and Egypt, where it is consumed as a vitamin supplement or in powder or tablet form. Additionally, gold is used in the helmets of astronauts to protect their eyes from harmful rays and radiation.
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Gold in electronics
Gold is used in electronics due to its unique chemical and physical properties. It is a highly conductive metal, allowing electricity to flow through it with minimal resistance. This makes it perfect for use in electrical components and connectors. Gold is also very resistant to corrosion and oxidation, even in unfavourable environmental conditions, which is crucial for the long-term reliability of electronic devices.
Gold is highly malleable, making it easy to shape and form into thin sheets, wires, and small pieces without breaking. This property is ideal for creating intricate circuitry in electronic devices. It is also compatible with other metals commonly used in electronics, such as copper and silicon, forming stable connections and improving functionality and longevity.
The use of gold in electronics, such as smartphones, computers, and TVs, has led to a significant amount of gold being incorporated into our daily lives. While the amount of gold in an individual cell phone may not seem significant, it can add up when considering the millions of phones sold each year.
Recycling electronics is crucial to recovering precious metals like gold and addressing the growing issue of e-waste. Initiatives like 'urban mining' aim to meet the demand for these materials by recovering gold from unwanted mobile phones and other electronic devices.
Gold's low reactivity makes it safe for medical applications, such as coating pacemakers and stents. Gold compounds also show promise as a new class of antibiotics, and gold nanoparticle technology is being used to enhance cancer treatments.
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Gold mining techniques
Placer Mining
Placer mining is a technique used to extract gold found in placer deposits, which are composed of relatively loose material that makes tunnelling difficult. This method typically involves the use of water or dredging to separate gold from other materials. One common form of placer mining is gold panning, which is often done by filling shallow pans with sand and gravel that may contain gold. The pan is submerged in water and shaken, allowing the gold to settle at the bottom due to its denser nature.
Hard Rock Mining
Hard rock mining, also known as underground mining, involves the extraction of gold from underground ore deposits. This method is more dangerous than surface mining and requires specialised equipment and training. Underground miners work in deep shafts and tunnels, using explosives, drills, and loaders to extract the ore.
Open-Pit Mining
Open-pit mining is a type of surface mining where gold is extracted from easily accessible ore deposits close to the surface. It involves digging large excavations into the ground to access the ore, which is then processed to extract the gold. While open-pit mining is less dangerous than underground mining, it can have a more significant environmental impact.
Dredging and Hydraulic Mining
Dredging is a technique used in placer mining where machines, often small-scale suction dredges, float on water to extract gold from riverbeds and streams. Hydraulic mining, a method used by the Romans, involves using water pressure to extract gold from loose sediment deposits.
Sluicing
Sluicing is a technique that has been used since ancient times and involves using a sluice box, a man-made channel with riffles, to separate gold from other materials. The riffles create dead zones in the current, allowing gold to settle out of suspension.
Magnetic and Chemical Separation
Some modern gold mining techniques involve using magnets to remove magnetic minerals from gold concentrate. Additionally, chemical leaching exploits the chemical properties of gold to extract it from ore, concentrate, or tailings. This process often uses cyanide, a highly toxic chemical, to achieve high gold recovery rates.
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Frequently asked questions
Gold is used for a variety of purposes in Australia, including jewellery, smartphones, electronics, and medical advancements. It is also a valuable commodity for investors and traders, and Australia's gold exports play a significant role in the country's economy.
Gold is valuable in Australia due to its rarity and physical and chemical properties. Its low reactivity and chemical stability make it safe for use in medical applications, such as coating pacemakers and stents. Gold is also prized for its durability, colour, and ability to hold its value over time, making it a desirable asset for investors.
There are several ways to buy gold in Australia. You can purchase physical gold bullion bars, coins, or jewellery from reputable dealers like the Royal Australian Mint or ABC Refinery. You can also invest indirectly by becoming a shareholder in gold mining and production companies or purchasing units in gold exchange-traded funds (ETFs). It's important to be cautious of scams and conduct thorough research before investing.
