Kalgoorlie has lost its esprit de corps but is more resistant to boom and bust cycles since proximate gold mines have come under foreign ownership.
Kalgoorlie has lost its esprit de corps but is more resistant to boom and bust cycles since proximate gold mines have come under foreign ownership.
There are diverging views about the doubling, in less than five years, of foreign control of Kalgoorlie’s iconic gold mines.
Think of it as a debate between what will work in a globalised economy and the desire to preserve the best a thriving mining community has to offer – acknowledgement of achievement and social cohesiveness that translates to a great social life.
Advocates of foreign ownership point to the stability and opportunities large foreign miners bring to the local economy.
Sceptics worry that company boards and executives far from Australia’s shores have the power to influence the Goldfields’ economy with a single decision to close a mine. They also miss being employed by companies that find the gold and mine it. The mining community usually celebrates the launch of production. There is no camaraderie associated with acquiring a gold mine, as many large foreign miners have done.
“Large mining companies are pretty invisible,” Heron Resources managing director Ian Buchhorn said.
Nickel explorer Heron has just signed a joint-venture agreement with the world’s second biggest nickel producer, Inco, to evaluate the 900 million tonne Kalgoorlie Nickel Project.
Mr Buchhorn has introduced a another large foreign mining player into Kalgoorlie, but says he misses the days of old when sports teams were representative of mining companies and you knew who someone worked for by the logo on the side of their Toyota.
Fewer Tojos are seen in town these days as mines come under the cost regimes of large corporations and the company bus is the way many get to work.
There is also the shift associated with large North American miners to owner-mining, which has affected the business of contract miners.
But there are significant benefits.
Kalgoorlie-Boulder Chamber of Commerce and Industry chief executive Hugh Gallagher said long-term planning was a feature of international miners.
“The global miner has had a major effect on the region as they are able to withstand some of the traditional cycle that have destroyed Kalgoorlie’s economy in years gone by,” he said.
“From a career perspective, the global miner is fantastic [as] there really are some great opportunities. It is also quite noticeable that the global miners are generally aware of their community obligations. [It] may be they have seen that volatile communities can destroy plans for growth and development if [people] turn against you.”
What is not up for debate is the character of the boom being enjoyed by Kalgoorlie. It is unlike any so far in the city’s 112-year history.
I lived in Kalgoorlie during the last boom in the early 1990s, experienced some of the bust after the gold price began its fall in 1997, and moved back last year in time to enjoy the effects of renewed buoyancy in bullion and simultaneous strength in nickel prices.
It is clearly a different atmosphere. Kalgoorlie has the aura of a regional city on a growth path independent of any represented mining companies’ vulnerability to the gold price. In addition, it still celebrates the achievements of Australian miners in nickel production.
Since 1997, non-Australian companies Newmont, Barrick, Placer Dome, Goldfields and Harmony Gold have acquired Kalgoorlie’s largest gold operations, including the emblematic Golden Mile.
By 2002 foreign control of WA’s gold production had doubled to about 42 per cent, according to a paper presented by WA School of Mines academics Philip Maxwell and Pietro Guj at the 2002 Paydirt Gold Conference.
“At one level, residents of several of WA’s mining regions are justifiably concerned on account of their perception that increasingly decisions of executives based offshore now have considerable potential to influence and control the key business and economic activies of their local economies,” Professor Maxwell and Professor Guj wrote.
“Because these executives are usually based halfway across the world, they may be viewed as being remote from and insensitive to the communities in which their companies operate and they may make closure decisions based on a mechanical view using summary measures of project viability and return. The people who live in mining towns have lived with such situations previously, although they probably had a better opportunity to make representations and to put their cases to local mine owners.”
The presentation concludes that foreign ownership will not undermine regional development in WA because there is still a large role of smaller local players, such as exploration companies.
In addition, large foreign miners have tended to sell smaller assets, usually less than one million ounce deposits, which can be mined economically by medium-sized companies such as Kalgoorlie-born Croesus Mining.
But there is still something missing in Kal.
The top-drawer Hannans Club no longer buzzes with end-of-day discussions between mine managers and visiting mining company directors over a beer.
And if I want to talk to a mining company chief executive, including Croesus Mining’s, I won’t be able to visit, I will have to get on the phone.
• Based in the Goldfields, Sharon Kemp is a former reporter, most recently with The Age.
