Deep in the desert – the gold mine that swallowed a town

Business is booming at Western Australia's giant super pit – but for the local community, there's a high price to pay. Kathy Marks reports

The super pit, Australia's biggest gold mine, is an awe-inspiring sight.

One of the biggest holes ever dug by man, it is visible from space and is even said to influence the weather in Kalgoorlie, the hard-bitten town perched on its rim. From the top of the massive crater, 240-ton trucks toil up and down the terraced pit face 24 hours a day, 365 days a year. They resemble children's toys.

Located on the "Golden Mile", the richest square mile of earth on the planet, the super pit produced nearly 700,000 ounces of gold last year. Now the open-cut pit, gouged out of the rust-red earth of the Western Australian desert, is set to become even bigger. An expansion programme is under way, and once it is completed, the massive crater will be 3.6km long, 1.6km wide and 650m deep.

With gold prices reaching record highs recently, the expansion – expected to prolong the mine's life until 2021 – is good news for its joint owners, the American giant Newmont and Canada-based Barrick Gold. But not everyone in Kalgoorlie, which lies 600km inland from Perth, is pleased. Residents living near the pit claim noise, dust and pollution problems will worsen, while a run-down Aboriginal community situated almost on the edge sees nothing of the riches excavated below.

It was in this remote and exceedingly arid region that Australia's last and greatest gold rush began, in 1893, after an Irish prospector, Paddy Hannan, spotted several nuggets in a gully. Hannan had made camp here after one of his packhorses threw a shoe. Before long, he and two companions had picked up 100 ounces of gold – and within days the place was crowded with men frantically pegging out claims.

Kalgoorlie – along with a neighbouring town, Boulder – sprang up, and more than 100 underground mines were established. By the 1970s nearly all had closed, and it was only thanks to Alan Bond, the soon-to-be-disgraced Perth tycoon, that the industry was saved. Bond had the idea of buying up all the old leases and turning them into one massive open-cut operation: the super pit, which opened in 1989. He had to sell his own stake when his business empire crumbled.

The spiralling gold price hit an all-time high of US$1,249.40 (£859.50) per ounce a fortnight ago, and is expected to reach $1,500 by the end of the year. That spells rich rewards not only for Newmont and Barrick, but also for the thousands of Kalgoorlie-Boulder residents who work or have shares in the business.

Kalgoorlie has always lived on its luck. A hard-drinking, hard-fighting town, it once had 30 brothels. The two remaining establishments earn more showing tourists around than from prostitution nowadays. But while the town is trying to shed its Wild West image, it retains a hard edge. Many of its 32 pubs offer "skimpies" (scantily clad barmaids). Alcohol-fuelled violence is a problem, and Hannan Street – lined with handsome gold rush-era buildings – is not a place for the faint-hearted on a Saturday night.

Ashok Parekh boots up the computer in his accountancy firm to check gold's progress for the umpteenth time that day. "The price is unbelievable," he says. Mr Parekh, who has extensive mining interests, says: "Everyone in 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."

In Williamstown, a suburb sandwiched between the super pit and Mount Charlotte, Kalgoorlie's sole surviving underground mine, the mood is very different. Here, residents dread the blasting that takes place nearly every day, at lunchtime or in late afternoon. As well as being close to the pit, they have the underground operations going on beneath them, day and night.

Keren Calder points to ever-widening cracks in her living room wall. "When there's a big blast, the whole house shakes, and it feels like the floor's going to cave in," she says. "All the pictures are at an angle, and I've had ornaments fall off the shelf and smash. Visitors get a hell of a fright. The dust is diabolical, too. I have to dust in here continuously. If I don't sweep my floor every day, it's like someone has emptied a vacuum cleaner over it."

Kalgoorlie-Boulder once consisted of many small communities, each one focused on an underground mine, with a headframe denoting its location. Over time, the headframes disappeared and the communities were consolidated – except for Williams-town. A bleak, sunbaked spot, stuck out on its own, it is pointed out as a curiosity to visitors on super-pit tours.

Cheri Raven hears drilling whenever she takes a shower. "Sometimes it sounds so close, you think a miner's going to pop up the plughole."

Like her neighbours, Ms Raven believes that Kalgoorlie Consolidated Gold Mining (KCGM), which runs the super pit on behalf of Newmont and Barrick, would like to depopulate Williamstown. It has already bought and bulldozed several houses.

"This is my home and I'm not moving; it doesn't matter how much money they offer me," she says. "My grandparents lived here; my husband and I were both raised here; I've got history here."

The fortunes being made from gold are part of a spectacular mining boom that is propping up the Australian economy. Already the world's second-largest gold producer, Australia could overtake China this year.

Kalgoorlie, where fortunes have ebbed and flowed since Paddy Hannan's day, prospered during the global financial crisis, with investors flocking to the precious metal, a traditional "safe haven".

During that period, while much of the world held its breath, a new A$10m (£6m) shopping centre opened in the town, while a major electrical and furniture retailer, Harvey Norman, moved to bigger premises and work proceeded on a A$20m golf course.

"Global financial crisis?" shrugs Russell Cole, the general manager of the super pit. "We watched it on our new plasma-screen TVs and heard about it as we drove to work in our big new cars."

A different perspective can be seen not only in Williamstown, but in the Aboriginal community of Ninga Mia, with its run-down houses, packs of stray dogs and rusting, abandoned cars. Ninga Mia is not even marked on town maps. No one from here works at the super pit, and Geoffrey Stokes, a local pastor, says the benefits of living next door to one of the world's richest gold mines amount to "sweet nothing, beside the pollution and the dust and the noise".

"Every week we have a funeral in Kalgoorlie: that's our reality," he says. "We die of common diseases while the rest of the community gets fat and rich on our birthright, our inheritance."

Sitting outside her house, Mary Morrison sighs when asked about the pit. "Dust comes through here all the time, from the mine and the trucks," she says. "The children end up with sore eyes, and some of them get sick."

KCGM considers the criticisms unjustified. "If the wind is blowing towards town, we don't blast, and we've not blasted for two or three weeks at a time sometimes," says Mr Cole. "We live in the town as well, so we have to do the right thing. We don't want to upset our neighbours."

Locals can telephone the company's "public interaction line", and Mr Cole says complaints are always quickly followed up. He also notes that KCGM contributes at least A$100,000 a year to community groups.

Tony Cooke, an occupational health and safety consultant who has investigated the industry's impact on the area, believes houses in Boulder will have to be demolished as the mine creeps closer. KCGM denies it.

He also maintains that decades of shaft mining have left the town unstable. One person "lost their washing and Hills Hoist [clothes line] into a hole that just opened up in the back garden". Even cars have been gobbled up. Seismologists blame mining activity for some of the tremors that periodically shake Kalgoorlie.

Steve Kean, a Williamstown resident, says: "It's like a nightmare, particularly the dust." The expansion of the mine will make life worse, he believes. "It feels like the super pit is swallowing up the town."