Wednesday, 11 December 2013

History of Mining and Gold Rushes in Australia

Australia is a vast and lucky land! Beneath the feet of the Australian people is a treasure trove of unimaginable riches. For one hundred and fifty years mining has changed the lives of every Australian in unexpected and extraordinary ways.

In history, mining in Australia has sparked waves of mass immigration and ignited political revolt. It has also toppled Australian Prime Ministers. Mining has taken aboriginal people's land away but it has also saved Australia from financial crisis.

In 1851 the small colonial town of Melbourne, Australia caught a fever - the Gold fever. A word of mouth ran through the streets of Melbourne, Australia that there is gold to be found and that it was in reach of anyone who could reach to the diggings as quickly as possible. Hundreds of thousands of people left their jobs and families and headed upcountry.

The Australian fields offered the chance of a golden future but striking at rich was not a sure thing. In those days mining in Australia was a gamblers game because vast majority of the people lacked the sufficient geological knowledge. But even then this Gold Rush of 1850s saw people from the entire globe migrating to Australia. For every person already in Victoria at the time, another five arrived.

Such huge inflow of people into Australia enabled new methods of becoming rich. This huge number of people now living in Australia required commodities such as tea and rich which were transported by the merchants from Asia. A new economy was created by mining in Australia.

But in the rush for riches, mining ignited unexpected and bitter battles and sparked a new era of racism. European miners in Australia expressed a particular racial hostility to Chinese miners. The fundamental question of who deserves to cash-in on the Australian mining boom inspired the passing racist laws. The government of Victoria, Australia placed a particular tax on the Chinese coming to Australia by ship and also limited the number of Chinese per ship that could come to Australia.

By the mid 1860s, right across the eastern states of Australia, the surface gold had most disappeared. But the very fact that Australia's treasure trove of minerals was now locked deep underground - was the catalyst for a dramatic new era that would have repercussions for generations to come. The need to mine deeper required the investment of further capital which in turn led to the formation of companies which further led to the development of stock exchanges.

In 1880s mining in Australia and stock market gambling became synonymous. Even the birth of, what later on became, the richest mining company in the world (Broken Hill, New South Wales) was decided on the turn of a card. As the boom times began for BHP, the money created by gold mining was already invested in property to built towns right across Australia. And jewel of the crown was Melbourne - 'the Marvelous Melbourne'.

By 1880s in Australia, the children of the gold rush generation wanted to get in on this property boom and make a killing of their own. But in just a few short years of rabid speculations, this mining inspired boom of 1880s became a devastating bust. It was a volatile cycle that was repeated in the years to come i.e mining provoking rocketing booms that turned to crushing busts.

Recession in the east (New South Wales and Victoria) was given new hope in 1893 when gold was discovered in the west at Kalgoorlie (six hundred kilometers east of Perth). This meant that the gold rush was on, again. And this second gold rush not only made Western Australia rich but it also propped up a depression-affected nation.

One of the miners who came to Western Australia was a man named Herbert Hoover (who would later on become the President of USA). This 22 year old engineer from Iowa had plans to run the gold mines of Western Australia with maximum efficiency and maximum profit. He brought cheap foreigners workers to these gold mines of the deep Western Australian deserts. Gone were to days when miners could become rich - under Hoover's regime labor rates were cut and labor hours were increased. It were the mining companies that were making all the money in Australia.

For these tens of thousands of workers flocking into the minefields of Western Australia, consumable water was a basic necessity which was lacking. It was not common for the miners to die of thirst. But as they say: 'In amongst the despair there is daring'.

In 1898, mining was the catalyst for one of the most ambitious constructing schemes in Australia'a history. To provide the workers of Kalgoorlie and Coolgardie with drinkable water, a six hundred kilometers long pipeline was planned to supply water from Perth to Kalgoorlie and Coolgardie.

Charles Yelverton O'Connor was the man in-charge of the Goldfields Water Supply Scheme in Australia. And after five long years, piece by piece, the pipe came together. In 1903, fresh water arrived in Kalgoorlie, Australia. The richest goldmines of Australia were saved for the next hundred years.

It was the start of the wet season of 1952 when Lang Hancock made the richest discovery of the Australian mining. Because of monsoon weather he had to drive his airplane below the clouds where Hancock discovered (which he would later call) his 'Rivers of Gold'. At that time Hancock was not aware that in future Pilbara will open up a mining area larger than Tasmania and contain twenty four billion tons of high grade iron ore.

Vietnam War pushed the demand for a new age metal called nickel. It was desperately needed to make guns and tanks. And a strike at a factory in Canada there was a worldwide shortage of nickel. So a chance discovery of nickel at Kambalda, 600 kilometers of Perth, was a perfect find at the perfect time. It became the basis for a stock exchange fortune to be made.

Small companies started running after the discovery of nickel. One such small company was Poseidon. They had found a lot of high grade nickel. It marked the beginning of the largest share market gamble in the history of Australia. The share prices kept on going up skywards. But Poseidon was just the beginning. Every penny-stock company's shares went up skywards.

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