February 2012

Economic Geology

Australia Part 2

By R. J. (Bob) Cathro

The gold rush in Victoria was not only more accessible from the coast, it was also much bigger than the earlier rush in New South Wales, so the imposition of the same licensing fee of 30s per month in Victoria proved difficult to enforce. This was partly due to the number of prospectors and miners involved as well as the resistance provoked by the imperious manner of the officials. The presence of Californians, with their fondness for firearms and lynch law, added more danger. The tipping point came on January 1, 1852, when the Legislative Council decided to increase the fee to £1 per month. Meanwhile, no military force was available to enforce order as the regular police had abandoned their duties to prospect for gold themselves.

Still, the rush grew larger. On October 1, Latrobe reported that 47 ships had been abandoned by their crews in Melbourne harbour. This made it very slow – up to six months – for a message to arrive in London. Disorder became more frequent at the goldfields and the illicit sale of alcohol was increasing, even though the licensing fee was reduced to £2 for three months. A miscarriage of justice at Ballarat served as an excuse for a riot and the formation of a reform league by miners. In December, a military force of 276 attacked 1,200 miners within a stockade on Eureka Hill, resulting in the death of 30 miners and two soldiers. Dubbed the “Eureka Massacre,” it had a profound impact on Australian history.

The people of Melbourne sympathized with the diggers. A series of trials resulted in acquittals and a commission of enquiry recommended a license fee of £1 per year, which included the right to vote. In addition, an export tax of 2s 6d per ounce was approved, amnesty given to all the miners, and Courts of Mines were established for hearing local disputes. As the rich surficial deposits became exhausted and companies were established to engage in deeper mining, the gold mining industry became stabilized and handsome towns replaced sprawls of pioneer shacks (Rickard, 1945).

The gold seekers, who gradually spread into neighbouring colonies, found small amounts of alluvial gold in 1852 at Fingal and Nine Mile Springs in Tasmania. The first of many small discoveries in Queensland was made at Canoona (near Rockhampton) in 1858, followed by Warwick (southwest of Brisbane) in 1863, Rockhampton in 1866, Gympie (northwest of Brisbane) in 1867, and Ravenswood (near Ayr) in 1868. In 1872, an important discovery was made at Charters Towers, 135 kilometres southwest of Townsville and 1,100 kilometres northwest of Brisbane. According to the legend, a 12-year-old Aboriginal boy named Jupiter found a nugget of gold in a creek and gave it to his employer, who then adopted and educated him. It resulted in an underground mine that produced 299 tons (6.6 million ounces) between 1871 and 1917. Other small gold showings were made at Palmer and Hodgkinson (between Cookstown and Cairnes and inland 100 kilometres) in 1873 and 1876, at Nebo (near Mackay) in 1881, and at Croydon in 1886.

Other small occurrences were reported at Birdwood and Teetulpa, South Australia, in 1870 and 1886, respectively; at Pine Creek and Arltunga in Northern Territory in 1872 and 1896, respectively; and at Lefroy, Beaconsfield and Mt Lyell in Tasmania in 1872, 1877 and 1886, respectively. These states and territory were found to have a low alluvial gold potential.

Western Australia, which did not come to the forefront as a gold region until 1892, eventually became the most important gold producing state in the country and among the best districts in the world. The interior of the state is arid country with little water, broken by low rocky ridges and devoid of vegetation other than scrub acacia trees, which made it extremely difficult and dangerous to prospect. The shortage of water meant that the only way of winning tiny grains of gold from the ground was by the grimy and inefficient method called dryblowing. Men from the dry regions of northern Queensland and the Northern Territory had a clear advantage working in the desert.

North Australia had been the scene of desultory exploration for years until a gold nugget was found in 1882 on the coast near Roebourne, 150 kilometres west of Port Hedland and about 1,250 kilometres north of Perth. Exploration was focused on the less mineralized northern and central parts of the state for several years and resulted in the discovery of a showing at Halls Creek three years later. Located about 225 kilometres northwest of Telfer, it became the scene of the short-lived Kimberley gold rush. Other gold prospects were found at Pilbara Creek and Ashburton River, between Telfer and the coast, in 1888 and 1889.

The first success in the southern part of the state, in what became the heart of the Western Australia gold district, was the Southern Cross goldfield in 1887. Situated about 385 kilometres northeast of Perth, it triggered a small gold rush named Yilgarn (“Yilgarn,” the Aboriginal word for white quartz, is now applied to the Western Australia Shield). An underground mine with a stamp mill was in production by the next year. Southern Cross was followed by a series of small rushes, the first being the Murchison gold rush, following the Cue discovery in 1888. In the years that followed, dozens of gold towns flourished, only to be abandoned when the mines went dry and the gold fever moved on.

The next discovery at Coolgardie in 1892, located in the desert 200 kilometres east of Southern Cross and about 600 kilometres northeast of Perth, stimulated the largest rush yet. It was initiated by two experienced prospectors from Victoria – Arthur Bayley and John Ford – who happened to camp by a waterhole that lay within a rich patch of alluvial gold. After scouring the ground for nuggets and specks (a mode of prospecting called “specking”), they found a quartz vein that was the source of the alluvial gold.

After crushing loose rock from the outcrop, they soon took 554 ounces (worth at least £2,200) to the bank. However, the two prospectors did not appreciate what they had and sold an 83 per cent interest in their claims for only £6,000. The new owners made a deposit of only £100 and the balance came from part of the almost 26,000 ounces that was recovered from 48 tons the next year. The Bayley’s Reward Mine made Bayley a wealthy sheep farmer back home in Victoria.

When three Irishmen, Paddy Hannan, Tom Flanagan and Daniel Shaw, recovered 100 ounces of alluvial gold at Mount Charlotte in 1893, only 50 miles northeast of Coolgardie, it led to the largest rush in Australian history and the establishment of the town of Kalgoorlie. It also erased all doubts about the gold potential of Western Australia, where the population increased from almost 50,000 in 1891 to 100,000 in 1895, and over 184,000 in 1901.

According to Kimberly (1897), “the excitement drew men from all over the world … Africa and America, Great Britain and Europe, China and India, New Zealand and the South Sea Islands, and from the mining centres in Queensland, New South Wales, Victoria, Tasmania and South Australia.”

Notable events included the completion of a telegraph line from Adelaide to Perth in 1877 and the Great Southern Railway in 1899. Signalling success, a stock exchange was formed in Perth in 1888 (Blainey, 1963). Both Western Australia and British Columbia, located on their respective west coasts and geographically remote, only agreed to join if they were linked by a railroad to the the centres of government and industry.

Because the California and Australia gold rushes occurred simultaneously, it was unavoidable that they would significantly impact world trade. Their combined gold output from 1848 to 1858 was about $1.2 billion (£240 million), an annual average of about $120 million, compared to the total global stockpile accumulated over the millenia of only $1.5 billion. Annual global production of gold prior to this decade had only averaged about $40 million.

The fact that the value of money did not seriously decline under this flood of new gold came as a great surprise to most economists and philosophers. The reason it did not was because it expanded commerce and trade. The two gold producing regions that were previously remote and sparsely populated became prosperous, while an adequate supply of gold stimulated international commerce between manufacturing and developing countries. Another benefit was that the industrial class achieved more purchasing and political power – a potent factor in the trend toward democracy (Rickard, 1945).


Except where noted, most of the information in this article is derived from Blainey (1963) and Rickard (1945).


Blainey, G. (1963). The rush that never ended: a history of Australian mining. Melbourne: Melbourne University Press, 414 p. Kimberly, W. B. (1897). History of West Australia: a narrative of her past together with biographies of her leading men, p. 322. Rickard, T. A. (1945). The romance of mining. Toronto; The Macmillan Company of Canada Limited, p. 179-210. Stone, D. I. and MacKinnon, S. (1976). Life on the Australian goldfields. Richmond: Methuen of Australia, 214 p.
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