An Industry at the Crossroads
by David Horton, Opal Horizon Limited - September, 2001.
Australia's National Gemstone is the opal. Ironically, few Australians actually buy opal products; most opal is sold either within Australia to tourists or is exported overseas. The principal nations that purchase Australian opal are Germany, Holland, Japan, USA and China.
Australia currently produces about 95 per cent of the world's precious opal from widely scattered fields throughout central Australia. Geologists believe that the volume of gems that have been produced over the past 150 years in Australia is but a minute fraction of the amount yet to be discovered.
The Australian opal mining industry, which ultimately has become a major export earner for the Australian economy, had a slow start. The first discovery of opal in Australia has been attributed to an eccentric German geologist, Professor Johannes Menge, who discovered common opal some 80 km to the north of Adelaide around 1840. Precious opal was first found in Australia on Listowel Downs Station, south of Blackall in western Queensland in 1868. In 1890, the pioneering opal dealer, Tullie Wollaston took samples of Queensland boulder opal to London and Germany to initiate and establish the Australian opal industry. Until about 1915, his company effectively controlled the opal industry.
Australia's first commercial opal field was discovered at White Cliffs in northwestern New South Wales in 1894. Further commercial discoveries followed in 1903 at Lightning Ridge, famous for its black opal, and then in South Australia at Coober Pedy (1915), Mintabie (1921) and Andamooka (1930). Despite the incredibly vast expanse of potential opal-bearing rocks in central Australia, very few new fields have been discovered in the last 70 years.
Both Lightning Ridge and Coober Pedy lay claim to being the opal capital of the world. In a sense, both claims are true. In terms of the value of stone produced, Lightning Ridge is the bigger producer whereas in terms of volume of stone, Coober Pedy produces far more. The widespread Queensland fields are the "quiet achievers".
No one really knows the value of the industry to the Australian economy. Most opal is produced by individuals or small syndicates and many of these are European immigrants or first generation Australians. Like other similar gem industries, there is a strong "black" or cash economy operating. Government figures on the value of the industry are speculative at best or extremely conservative at worst. Consensus within the industry would suggest that several years ago the Australian opal mining industry was worth somewhere between AUD$100 million to AUD$200 million per annum in terms of raw gems produced and between 5 and 10 times these amounts for processed gems. These figures do not, of course, include the value of the tourism component to the industry except in the sale of gems.
In recent years production of opals has been decreasing in New South Wales and South Australia. Factors which have contributed to falling production include the mature nature of the southern fields and lack of new discoveries, the aging population of opal miners and the reluctance of the younger generation to accept mining as a career, the increasing amount of government red tape and, of course, the recently-introduced goods and services tax with its consequential effect on the opal black economy.
The price of opals is not dependent on normal supply / demand market factors. Perversely, the price of opal seems to be directly related to the volume of opal either produced or sold. Prices actually rose when the Coocoran fields to the west of Lightning Ridge and the Lambina fields in remote northern South Australia were discovered. Similarly, periods of peak tourism during major sporting events such as the Olympic or Commonwealth Games or when Australia was host to overseas troops also affected the price. Obviously the industry is a long, long way from market saturation.
Despite the extensive deposits present in Australia, the high monetary value placed on precious opal for jewellery (AUD$30,000 per carat for cut top quality black opal), and Australia's position as one of the world's premier mining nations, it is perhaps surprising that opal mining in Australia is still essentially a cottage industry. Most authorities within the industry consider that there are two main factors preventing the industry from achieving its full potential - lack of scientific research and lack of marketing.
The general lack of research into opal genesis has meant that, apart from the time-honoured methods of prospecting and pattern drilling, no other successful systematic exploration techniques have been developed. This is the main reason for the paucity of new fields discovered in recent decades and the lack of larger companies in the industry. Recognising this, several academic institutions including the Argon Geochronology Laboratory at the University of Queensland and the University Georgia Augusta at Göttingen in Germany, among others, are currently carrying out research into ancient weathering regimes and opal genesis; opal in Australia is generally considered to be a product of weathering. Other organisations to recently enter the industry include the German company, GeoDetect, which has developed a ground penetrating radar system that has had some success in finding boulder opal in western Queensland and a new Australian company, Opal Horizon Limited which has been set up to apply the latest university research to find new centres of opal mineralisation.
Traditionally, the opal miners in Australia have not acted as a unified group; their interests have been divided along State and mining field lines. Until recently, this disunity has prevented the formation of a coherent national opal mining identity and thus, a strong voice within the mining industry as a whole. This is slowly changing. Two national symposia have now been held firstly at Lightning Ridge in 1999 and more recently at Coober Pedy in 2001 to address problems associated with the industry as a whole. As a direct outcome of the Coober Pedy symposium, the Australian Jewellery and Gemstone Industry Council, the peak body for the gemstone industry in Australia, recently held two opal industry strategic planning meetings in Sydney specifically to address problems within the industry.
The State governments of the three opal mining States, South Australia, New South Wales, and Queensland have a curious love / hate relationship with the opal mining industry. While they recognise the value of the opal mining industry to their respective States and have each set up projects designed to attract opal exploration and mining, they each candidly admit that catering to the estimated 2,500 individual opal miners within Australia with their 8,300 mining leases and claims is an administrative nightmare.
Most tourists buy their opal in the capital cities of Australia. Those brave enough to embark on an outback adventure usually pass through one of more of the opal mining centres such as Coober Pedy, Lightning Ridge or Yowah in Queensland. After opal mining, tourism is the most important source of income for these centres and the respective Shire Councils vigorously compete for this income. The tourist season, and indeed most opal mining, is restricted to the cooler drier parts of the year, generally from Easter to late September. In the bigger centres such as Coober Pedy and Lightning Ridge, the tourist is well catered for with high quality, albeit sometimes unusual, motel accommodation. At Coober Pedy there are several motels that offer underground accommodation. In fact, a good proportion of the town is built underground.
Many tourists prefer to "rough it" by staying either at various caravan parks close to the fields, or where allowed, on the fields themselves. Most States require that tourists acquire an inexpensive Fossicking or Prospecting Licence. Many areas permit visitors to "noodle" - which is the reworking of old dump material. It is not uncommon to hear of tourists finding the occasional gem worth up to AUD$30,000 either from noodling or from prospecting ground in designated fossicking areas.
Source: Opal Horizon