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2/2005 - Feb 2005 - What is the real price of gold? by Natalie Kent and Sandra Reidenbach


What is the real price of gold - a paper by UTS journalism students in collaboration with the Mineral Policy Institute


Lake Cowal, 38km north of West Wylong and future gold mining site. PHOTO: Natalie Kent

The largest inland lake in New South Wales is on the way to becoming one of the world's biggest gold mines. 350 kilometers west of Sydney, Lake Cowal lies at the difficult crossroads of a mining lease, local jobs and land sacred to the Wiradjuri Nation.


On February 26, 1999, North Ltd (WA), an Australian mining company, was granted a mining exploration lease. The lease changed hands and in June, 2003, the Canadian mining company Barrick Gold was granted a lease to operate an open-cut mine for the extraction of silver and gold at Lake Cowal. [Topic headings in this article]

  •  Barrick and the leases
  • Opposition to mining Lake Cowal
  • What is cyanide?
  • The effects on water
  • Legal bids to stop the mine
  • Aboriginal significance
  • The Native Title claim struggle
  • The local perspective
  • Recent developments
  • Image gallery

Gold is synonymous with wealth. It is the prestigious symbol that marks special occasions like weddings, graduations and anniversaries. But the processes used to extract it from the ground have dimmed by controversy over .


Increasing environmental concerns over gold mining has been prompted by information from the 'nodirtygold campaign', which claims that the average wedding band requires 18 tonnes of earth to be excavated and the process produces 12 cubic metres of tailings.


Currently, productivity achieves less than one gram of gold per tonne of rock, with 80 per cent of this gold being used for jewellery. This has sparked questions as to whether the value of gold outweighs its environmental impact.

"It wasn't like taking on fossil fuel where we are still trying to find our way to other alternatives, in this case we actually don't need anymore gold above ground right now to meet our needs," says Ruth Rosenhek, a mining activist and founder of the Coalition to Save Lake Cowal. "Complete ignorance on the part of the consumers that people don't really realise that when they buy a gold ring that they are participating in all this destruction."  


These concerns have been brought to a head over the gold mining project at Lake Cowal in NSW. The project has faced years of negotiations, legal battles, legislation changes and ongoing pressure from activist groups over environmental and Indigenous matters in order to commence mining.



Situated north-east of West-Wyalong, Lake Cowal is a fresh water ephemeral lake with water in it for seven years out of 10. Whilst the lake is currently dry, as a wetland it is home to about 172 different birds, including rare species such as the freckled duck, and endangered species of flora and fauna.


The lake is also home to large numbers of migratory species listed in the China and Japan-Australian Migratory Bird Agreements. These birds use the lake on their journey to and from Australia.



Barrick Gold and the leases


A transnational Canadian-based gold mining company Barrick operates gold mines all around the world. It is one of the leading gold producers and trades under the ticker symbol ABX on the Toronto, New York, London and Swiss stock exchanges and the Paris Bourse.


It invested $270 million in the construction process that has already commenced at Lake Cowal. Barrick Gold is said to be employing about 300 people during the construction phase, and later 200 people as permanent staff. The gold mining project is planned to last for a total of 13 years with the production process is expected to start in 2006.


Barrick declined the invitation for an interview.

The area of the mining lease granted to Barrick Gold by the New South Wales Government is is adjacent to Lake Cowal and is 2,636 hectares. It is expected that approximately 208 million tonnes of waste rock, including low to medium grade ore, will be excavated from an open-cut pit. This pit will be approximately one kilometer long, 825 meter wide and 325 m deep, taking in part of the western side of the lake (part of which will be within the high water level). It is estimated that Barrick will retrieve approximately 2.7 million ounces of gold through this exercise.


The only barrier between the lake and the pit will be an earth wall. It is proposed that mine tailings will be stored in unlined dams 3.5 km from the lake and within the floodplain.



Opposition to the mining


Lake Cowal is an established site of protest for environmental activists. Recently, a 'convergence' was held at the mining site on, October 23, 2004 under the banner 'Water is more precious than gold".


"The aim of the protest was to smoke out the evil that Barrick is creating and to hand over a seven day Notice to Quit", says Natalie Lowrey, Victorian convergence coordinator.


Activists travelled from as far as Melbourne, Brisbane, Newcastle and Sydney to come together and voice their disapproval of the mine. However, locals were not as concerned.


"Of all these people only about 12 of us have actually ever been out here before," says Jamie, a 29-year-old protester. "They are here because they have all heard about the lake for two years; they have heard about the struggle. Now it is actually hitting the activists just how important this lake is."


There was a strong police presence on the day. "They have a right to protest but Barrick also has the right to run a business without sabotage," says Constable Kevin Hutley.


One of the main concerns of activists was the dangers posed by gold leaching practices, using the lethal chemical cyanide.


"We are just exercising our sovereign right to come here and show our disapproval of what the New South Wales Government has done; consenting to a cyanide leaching gold mine in the centre of the Murray-Darling Basin, when the Federal Government has allocated $500 million to the ailing Murray River," says Neville Williams, a Wiradjuri Aboriginal.


Protester Neville Williams at the Lake Cowal gold mining site.

PHOTO: Natalie Kent


What is cyanide?

Cyanide is a highly poisonous chemical used for the leaching of gold. It takes only a tiny amount of cyanide solution to kill an adult.  "If you get a bad spill, cyanide is lethal, anything that comes into contact with it, dies. Basically, it kills everything," says Rosenhek. "There are also by-products, the cyanide can re-bond and have elevated levels of cyanide compounds that can be left in the environment. Not enough research has been done to know how to discard of them."


Although hazardous, there are no current alternatives to using cyanide for the mining of gold.

"The cyanide bonds with the gold and then you can get rid of the cyanide and you are left with the gold," says Rosenhek. "The cyanide will work to find the specks of gold, then you run it through a filtration system, and you are left with tons of rock, that go into big waste mounts and then you have your little bit of gold."


Barrick Gold will have to transport roughly 6000 tonnes of cyanide by truck per year to leach gold from ore at Lake Cowal. The cyanide will be transported through river catchments from Gladstone in Queensland. A potential leakage could endanger and kill flora and fauna in the area.

The cyanide problems experienced at North Parkes mine, New South Wales, which is in the vicinity of Lake Cowal, strongly reinforces environmental concerns over the use of this chemical.


"They had a tailings pond that filled up with an excess of copper, so the cyanide had more to bond with, that it would not of otherwise, and all of a sudden there was elevated levels of cyanide and the monitoring could pick that up," says Rosenhek. "As far as I understand it, the company knew they had a cyanide problem because they started to see the death of birds so they put in a neutraliser, hydrogen peroxide, which is highly toxic."

Leaks and cyanide spillages have also occurred in various mining sites from Hungary to South Africa and most recently in Kalrgoorlie Western Australia, in a mine partly owned by Barrick Gold.

Some countries including Germany and Costa Rica have banned the use of cyanide in their gold mines. According to Rosenhek, Turkey halted a gold mine, as a matter of the people's constitutional right to health and Montana in the US banned it because they had 60,000 spillages.


"In terms of the banning of cyanide, only a handful [of countries] have done it," says Rosenhek. "Like any toxic substance, for it to be successful in getting it outlawed, you usually have to wait until a big disaster happens. I don't think that any country has been as fully cognitive of the hazards of cyanide usages they are now and now they are turning a blind eye, I feel that there has been a lot of cover up of the dangers."


The effects on water


Barrick Gold's excessive water usage is also of concern for the environmental activists.


The mine tailings create a pond containing highly toxic chemicals, which is 3.5 km from the mine at Lake Cowal. According to Rosenhek, this presents a tempting new habitat for the migratory birds.


"We could see a major bird kill and major fish kill and it could get into the Murray-Darling River system," says Rosenhek. "The system at Lake Cowal goes into the Lachlan River, to the Murrumbidgee then down into the Murray-Darling. Theoretically you could see a spill like in the Tisza River in Hungary, which travelled 75 km down stream, and there are a number of cases in the US that are like that too where 17 miles of river was wiped out."


According to the Save the Lake Cowal campaign, up to 17 megalitres of water (equivalent to 17 Olympic swimming pools) will be pumped out of a borefield every day for use at the mine. Meanwhile, the region surrounding the mining site endures its seventh year of drought.


This area of the Lachlan river system being an embargoed water area. However, because the Lake Cowal Gold Project is a 'State Significant Development,' it is exempt from the embargo.


Legal bids to stop the mine

In order to prevent a cyanide spillage in New South Wales, Ruth Rosenhek, the Coalition to Protect Lake Cowal and the Greens have put together a Cyanide Bill, based on the Montana and Turkey Cyanide Bills. 


"It was a private members Bill in 2000, but it didn't get called," says Rosenhek. "On October 19, we brought it up as a matter of urgency so that it would be heard, based on various statistics of spills and leaks. The government agreed to have it debated and it has been adjourned to November 9. We are proposing that cyanide be prohibited in the use of gold, silver and other types of mining but that the legislation not be imposed on existing mines that are in operation, just any ones that are new as of June 2004. So the Cowal project would fall under it because it hasn't started its cyanide leaching processes yet."

The Save the Lake Cowal campaign has also shed light on mining companies such as Barrick Gold's influence on the State Government.


"It went through a commission of inquiry and Bob Carr said no because it's too environmentally hazardous," says Rosenhek. "Then the company came back with a new proposal that changed three things; they moved the electricity transmission line, they changed the number of ponds from four to two (but actually the two ponds are larger in area than the four ponds so it is actually worse) and they changed the dissolution level of the cyanide saying it would never come up past 35 milograms per metre. Then it when through another commission of inquiry, it got through this commission and it is now going ahead."


According to Binnie O'Dwyer, the legal representative at the 'Save Lake Cowal campaign,' a mining company is required to plan the construction of their mine five years prior to commencing. However, she believes that the Government went to great lengths to accommodate Barrick.


"The development consent lapsed and they had to do it again because we had injunctions, which stopped them from working. But then the government changed the legislation that allowed them an extension for as long as the development was held up. That is how keen the Government is for this to take place. We are simply highlighting the inadequacies of the Government, they are not in any way, shape or form protecting the cultural heritage."

O'Dwyer says a compromise is possible between the construction of the mine and environmental precautions, but because of Lake Cowal's cultural and environmental importance, it is not a good location for a mine.



Aboriginal significance


The significance of the site to Aboriginals has inflamed resistance against the mining process. Lake Cowal is the sacred land of the Aboriginal Wiradjuri people.  Neville Williams from the 'Save Lake Cowal' campaign claims: "Lake Cowal, it's part of the Wiradjuri nation, it's a dreaming place. We are part of the land since time begun, the natural way." 

The land surrounding Lake Cowal has a rich cultural heritage according to Williams, who travelled the area with his grandfather in the 1940s and 50s.


"It is filled with marked trees, very old trees, shields and all sorts of sacred objects," he says. "The area is very, very rich in Aboriginal artefacts and cultural objects; stone axes, very small blades and microlits are still being found at Lake Cowal. I see it as ludicrous that in the Land and Environmental Court the judges said at various times that the crown owns the artefacts. Well, let me tell you that the Crown doesn't own the artefacts, we inherited them, they were made by our old people and they belong to us."


The land is also regarded as sacred for the Wiradjuri nation because, as explained by Williams, a huge Aboriginal massacre occurred at Lake Cowal in the late 1800s.


"Marshall law was enforced on my people, by mountain settlers, when killing Aboriginals wasn't murder," says Williams.

Williams believes the drilling at the open-cut gold mine is drilling into the spirits of the Wiradjuri ancestors.


"If I smashed my way into a cathedral, tipped the alter over, pushed the priest out of the way and grabbed the bible and tore a heap of chapters out I would be arrested," says Williams. "I feel that the Government and the mining company have absolutely no regard for our culture."


Protesters at the Lake Cowal gold mining site.

PHOTO: Natalie Kent


The Native Title claim struggle

Whilst the Wiradjuri cultural heritage of the land has been legally established, opposing Native Title claims have stirred differences of opinion amongst the Wiradjuri people.


"The Mooka and Kalara United Family Claim ahve a Native Title claim over the area," says Williams. "But our Native Title claim didn't get registered." he says. "It is still alive in the courts and I feel that there is another mob who have got their claim registered because they were going along with the government. I feel those people are traitors, motivated by power, greed and their lust for money. Greed isn't the Aboriginal way, we share everything. That is the old black nature way of caring and sharing."

The current Native Title claim holders, the Condobolin Wiradjuri group, have reached an agreement with Barrick, which they believe ensures environmental and cultural heritage of the land. This group dismisses Williams' sentiments.


"We do not recognise Neville Williams as an elder of the Wiradjuri Tribe," says Percy Knight a representative Wiradjuri Condobolin Native Title Claim Group. We are the traditional owners of the land and we were able to prove that to the courts so our Native Title Claim was registered. We do not support the mine but we are powerless to stop it. We are not na´ve, there is a lot of invested interest in the mine by the Government and surroundings towns like Parkes, Forbes and West Wyalong and we feel that our sacred land is going to be protected more if we have a say in the process. It is better to change the system from the inside out rather than the outside in. This way we are consulted and are able to impact decisions."


Knight stresses that it is not about the money, but about a better quality of life.


"We are looking at this as an opportunity to assist our drought-stricken community to become economically sustainable, to preserve our traditional lands and re-educate our youth about our culture."


The agreement reached by Barrick respects the Claim Group's rights under the native Title Act, recognises their custodial responsibilities to the land and stipulates a right to negotiate process.


Under the agreement, Barrick has proposed to support the Claim Group in establishing the Wiradjuri Condobolin Corporation to deliver benefits to the Wiradjuri Condobolin community and also provide cultural heritage services.


Employment of Wiradjuri Condobolin people at Cowal will be facilitated by the establishment of an Education, Training and Business Development Committee.


Barrick will also provide funding for multiple tertiary education scholarships, apprenticeships and pre-employment training to further enhance the Wiradjuri Condobolin people's prospects of active participation in employment and business opportunities at Cowal.


The community understanding of the Wiradjuri culture will be broadened and promoted by an annual grant for the establishment of a Centre for Wiradjuri Studies. (See Barrick Press Release)



The local perspective


The Bland Shire council, responsible for the Lake Cowal region, is cautiously optimistic about the construction of the mine, but also sees the benefits the mine will bring.


"The West Wyalong community is overall supportive of the mine, for both economic and environmental reasons," says Frank Zaknich, Bland Shire's general manager. He believes that co-existence between a gold mine and environmental protection is possible.

In 1996, North Gold (WA) launched a proposal for the development of a gold ore body at Lake Cowal. The Minister for Urban Affairs and Planning and the Minister for Housing dismissed it due to insufficient environmental precautions. However, Zaknich says that Barrick Gold's successful mining proposal is an indication of their improved environmental protection strategies.

"The use of cyanide on the first site was one of the reasons it was declined in the first place [in 1996], but now the necessary precautions have been taken, in terms of transportation and various other precautions," says Zaknich. "There is the seeding of banks, and rehabilitation practices that will take place, like tree planting, and the rehabilitation and reinstating of the catchment area. This is mining for the 21st Century."

The town of West Wyalong. Picture: Natalie Kent

Local business owner of West Wyalong Globe Hotel, Tina, who has been a local for just over seven years is looking forward to the opening of the mine and believes that it is going to be great for the town overall.


"Owning a local business in a small country town can be quite stressful but the mine is something positive to look forward and does keep the whole town afloat," she says. "We have been lacking a lot of infrastructure because before the mine there wasn't anything to sustain developments to the town. People have been holding onto their money because there has been no money in town. Now other people are coming in and investing money into the town, it is definitely a positive thing. I know it is going to die right off [when the mine closes] but it is going to put enough facilities into the town to improve it in the long run. Hopefully by then the drought would have broken so the town itself, the farmers and everyone else in the whole area, is going to benefit."


Tina, believes that the West Wyalong community has considered the environmental consequences the mines poses, yet are still confident the mine will have more positive than negative outcomes.


"Regarding environmental concerns, you are going to get that anywhere, it is not that close to town and the impact studies that I have seen from the mine basically, they have pretty much got there bases covered," she says. "It has been to court numerous, numerous times, and having spoken to geologists that have come into the pub, we are not overly stressed in that regard."


"When the mine is actually closed, the land itself will may not necessarily be better but ecologically it will still be very, very sound," Tina says. "The environmental impact of it all is not going to be too detrimental for the environment out there or the surrounding districts."

 "All across the world, if you come in and impose a multi-national corporation project, communities never benefit, land never benefits, indigenous people never benefit," says Rosenhek.



Recent developments


On 5 November, 2004, Justice David Lloyd of the Land and Environment Court handed down a decision invaliding consents and permits issued by the Department of Environment and Conservation to destroy Aboriginal objects on the proposed electricity transmission line (ETL) for the Lake Cowal Gold Project.


The challenge was taken by Neville Williams, on behalf of the Wiradjuri traditional owners of the land. Williams claimed he had been denied procedural fairness over the issuing of the consents. Williams argued that Country Energy and Dr Colin Pardoe, the consulting archaeologist for Barrick Gold, refused him access rights to investigate the Aboriginal objects, which could possible be destroyed or disturbed by the construction of the ETL.


Justice Lloyd's judgement found that Williams had a legitimate expectation that he would be involved in identification and assessment of the significance of Aboriginal objects within the ETL corridor which Country Energy and Dr Pardoe failed to meet.


The Court has ordered that Country Energy and Dr Pardoe must abstain from any activity, which relies on the now invalid permits and consents or they would be in breach of the National Parks and Wildlife Act.


Barrick stopped in its tracks - or just stalled?

PHOTO: Natalie Kent


After five years of planning, including overcoming several obstacles along the way such as changes to the lease holder, the legislation, and modifications to meet Government environmental requirements; Barrick has once again been stalled.


Opposition from Aboriginal and environmental activists over land rights and the use of the highly toxic chemical, cyanide, has lead to the mining process at Lake Cowal to be halted once again.


Lake Cowal is an example of how the gold extraction process is highly controversial. Taking into consideration the number of issues unearthed by the gold mining and the fact that Barrick have estimated that the delay in the construction of the electricity transmission line is likely to cost the company over a million dollars a month, it is clear the price of gold goes beyond its consumer value.

[Lake Cowal image gallery here]


Date last modified: 10.11.2004

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