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Australian boom town leaves many in the dust

A gold mining pit visible from space threatens to swallow a town.

Mining truck
A truck driver walks past a giant mining truck at the largest open pit gold mine in Australia, known as the Super Pit, in Kalgoorlie, Western Australia. The pit is around 2.5 miles long, 1 mile wide and 700 yards deep, and produces up to 850,000 ounces of gold per year. (David Gray/Reuters)

KALGOORLIE, Western Australia — When an Irish prospector, Paddy Hannan, picked up a gold nugget in the Australian desert in 1893, he could little have dreamed that he had just discovered the richest square mile of earth on the planet.

More than a century on, the “Golden Mile” is still yielding riches, mainly from the so-called Super Pit, an enormous open-cut mine created from scores of underground shafts. One of the biggest holes ever dug by man, the pit is visible from space and is even reputed to influence the weather in Kalgoorlie, the hardbitten town crouched on its rim.

Now the pit, gouged from the rust-red earth of Western Australia, is set to become even bigger. Already the country’s largest gold mine, producing nearly 700,000 ounces of the precious metal last year, it will be 2.2 miles long, a mile wide and nearly half a mile deep once an expansion program is completed.

With the gold price reaching record highs in recent weeks, the enlargement — expected to prolong the mine’s life until 2021 — means handsome profits for its joint owners, the American giant Newmont and Canada-based Barrick Gold. It is also good news for the thousands of locals who work in the industry, or prospect for gold, or own shares in gold mining companies.

But not everyone in Kalgoorlie, located 370 miles inland from the West Australian capital Perth, is happy. People living near the pit fear that noise, dust and pollution will worsen, while a run-down aboriginal community perched almost on the edge derives no benefit from its proximity to such wealth.

Hannan’s discovery, in this remote and exceedingly arid region, set off Australia’s last and greatest gold rush. Kalgoorlie sprang up, along with a neighboring town, Boulder, and both flourished. But by the 1970s nearly all the underground mines had closed, and it was only thanks to Alan Bond — the Perth tycoon who funded the Americas Cup win for Australia in 1983 — that the industry was saved. Bond, later jailed for fraud, had the idea of turning the old leases into one massive open-cut operation.

Kalgoorlie breathed a sigh of relief. But the town has always lived on its luck. It once had 30 brothels, and still has 32 pubs, many of them offering “skimpies” (scantily clad barmaids). Alcohol-fueled violence is a problem, and the main Hannan Street — lined with handsome gold rush-era buildings — is not a place for the faint-hearted on a Saturday night.

In his sprawling accountancy firm, Ashok Parekh boots up his computer to check gold’s progress for the umpteenth time that day. The price hit an all-time high of $1,249.40 in May, and analysts expect it to reach $1,500 by the end of this year. “The price is unbelievable,” said Parekh, who has extensive mining interests. He added: “Everyone is Kalgoorlie is happy; you can feel it in the air. I drink every Friday night with my friends — builders, taxi drivers, businessmen, pensioners — and we all talk about the same thing: the gold price and gold shares, which companies are doing well.”

But in Williamstown, a suburb sandwiched between the Super Pit and Mount Charlotte, Kalgoorlie’s sole surviving underground mine, the mood is very different.