Water The Gold Key In Can-do Kalgoorlie
Sydney Morning Herald
Monday July 20, 1998
The Goldfields people do not meekly accept what fate throws at them. KATE ASKEW visits a community that knows how to fight back
Doug Daws threw in politics with the National Party the day deputy premier and leader of the WA National party, Hendy Cowan, stood up in parliament and pledged his party's support for a Western Australian gold royalty.
Two-and-a-half years later Daws is on the road between Esperance and Kalgoorlie, doing the hard sell on a $750 million, somewhat bizarre, concept of pumping water to Kalgoorlie from the south coast.
Daws - lifetime Kalgoorlie resident, local businessman, former head of the Liberal Party branch, later the National Party candidate for Goldfields and chairman of publicly listed Amalg Holdings - firmly believes water, or lack of it, is keeping new players away from the huge Goldfields region.
He has prevailed when others would have given up.
In 1992 Kalgoorlie desperately needed a new road bypassing the centre of town and cutting down to the industrial suburb of Boulder.
Daws led the rebel gang that bypassed not only the town but also the WA Government, after the pollies couldn't find the $2.7 million to build the road. But locals brought together the equipment and workers needed for the job. It cost $400,000 and took four days.
Ambitious projects such as Daws's water scheme are needed to overcome the general mining industry malaise that has settled over Kalgoorlie.
"It is fair to say it's subdued and there are areas of concern . . . the downturn in exploration, driven by market sentiment is the one area you could pick where things have turned bad," Daws said last week.
"But it's not all bad news, though certainly there are some drill rigs parked up and there is recognition that mines don't last forever."
The town's annual showpiece - next month's Diggers & Dealers mining conference - should boost the spirits of Kalgoorlie's 30,000-strong community. It is already booked out with attendances likely to be around 800.
"They've converted some of the unused accommodation into bedsits," Daws said.
And if investors won't come to Kalgoorlie, the locals have started a project, codenamed "The Hunter", to take the region to the world. The Hunter will hire someone to promote the Goldfields in local and international financial circles.
In 1997 Western Australia had record gold production, but it was not enough to compensate for the falling gold price. Total revenue from gold dropped by $87 million.
The 8.6 per cent increase in 1997 gold production was on the back of increased output from the Goldfields mines such as the Super Pit, Plutonic and Granny Smith and the first full year's output from Two Boys. But a number of mines, including Youanmi, Bullabulling, Orient Well, Tuckabianna, Mt Monger and Palm Springs fell victim to slumping bullion and shut.
Other projects were deferred. WMC put off its proposed $160 million expansion of St Ives, south of Kalgoorlie, and the $400 million Boddington expansion was delayed.
Despite the downturn, in 1997 exploration spending in the gold industry rose 15 per cent to $511 million. But the drilling companies and mining contractors have seen their profits squeezed. The one-man drilling outfits - who took out big loans to buy their rigs in the boomtimes of the early to mid-1990s - are hurting badly.
Some businesses, however, have used the downturn as the reason for devising different deals that allow companies to get into production when traditional supporters such as sharemarket investors and the banks won't take the risk.
Barminco is one such company. The mining contractor has been operating out of Kalgoorlie for the past nine years, but just recently started becoming involved in mining joint ventures.
Barminco managing director Peter Bartlett - formerly a mining engineer with WMC for 20 years - says the joint ventures allow smaller companies with higher-grade deposits to get into production, using Barminco's facilities and expertise.
And as mines in the Goldfields mature and move to underground from open pit, they provide good business for those contractors with specialist expertise such as Barminco.
"There are a lot of tenders out. The contractors in the underground sector are very strong," Bartlett said.
The resilience of Kalgoorlie folk cannot be disregarded.
In the words of Daws: "We pull in our belts, we have a look around and then we say `Righto, let's have a go at this'."
© 1998 Sydney Morning Herald
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