All that glistens is not gold in Kalgoorlie-Boulder

After 18 years attending the Diggers and Dealers conference, it felt as buoyant this year as it did back in the boom times of 2009. The measure of this conference for me has always been how difficult it is to move from the exhibition area through to the plenary and having to rub shoulders the whole way. In that regard, it was busy as ever this year and there were definitely more institutional investors at the event than I’ve seen previously.

So quality people, not just quantity.

In the time that I’ve been coming to Diggers, the gold price has risen from less than A$500 to more than A$2,000 per ounce – I can still remember publishing the words Gold hits $500 in a 100-point type headline on the front page of a local paper. The ongoing strength of gold feels appropriate given Kalgoorlie-Boulder has a 120-plus-year history of gold mining, and it was gold that literally built the town (and paved Hannan Street).

However, the town of Kalgoorlie-Boulder itself is really struggling at the moment and dealing with some major structural changes.

This is obvious walking in the heart of town, where more retail shop fronts are vacant on Hannan Street than many locals can remember seeing in their lifetimes. Added to the closures, the profile of the shops in the area has changed greatly.

In years gone by, there would have been stationery, clothes, appliance and gift shops – the type that you’d expect to see in a functioning country town – that offered a wide range of services to residents who wanted to buy local, live local and support the local community.

CHANGING TIMES

It feels like this has changed greatly and only partially due to the rise of online shopping. It’s a notable talking point raised by people who have been around the town a lot longer than I have.

It was also part of the conversation at the Gold Industry Group’s Diggers breakfast regarding the gold mining industry’s contribution to the town. There were some mixed views.

There are some calls within local leadership for the gold industry to contribute more to the town, and in a more formalised manner, in terms of providing transparency on direct residential employment, spend on local contractors and services, and perhaps most importantly, measures taken to encourage the conversion of fly-in-fly-out personnel into residential appointments wherever possible.

I am no expert on social and demographic change and I don’t have any great immediate solutions, but whatever the exact structural issues are at play currently in Kalgoorlie-Boulder, it feels like it’s approaching a turning point. I am just not sure which way it will turn.

The locals in Kal who opposed an increase in WA Government gold royalties back when Treasurer Ben Wyatt chanced his hand on it are perhaps feeling a bit short-changed at the moment.

There is an expectation that some of that previously at-risk revenue will be reinvested in the community into the future through buying local and using local suppliers – not just drill rigs and assay labs, but across more mainstream sourcing of goods and services.

WHERE TO NOW?

Perhaps the first relatively simple step is for gold companies and projects on the doorstep of town to boost their presence in whatever way is available to them and be proud and public about the fact they continue to invest in the broader Goldfields community.

It might just be the way the story is being told (a theme that emerged several times at Diggers). But the industry needs to get better at being transparent and more assertive about what it does spend in residential payroll, local sponsorships and support of local services and suppliers.

There are always going to be people not directly involved in the resources industry or Kalgoorlie-Boulder (or other traditional mining towns) who don’t understand the dynamics required to make these communities thrive and suggest programs and outcomes that measure only very binary metrics. I don’t feel this is the solution here.

Having grown up in Kalgoorlie-Boulder, I can confidently say that the community, sporting and recreational infrastructure the city has developed to support comfortable family living is better than it’s ever been.

Given the current commentary around up to 1500 full time, highly-paid vacancies that are on offer in the Goldfields in mining and associated industries, people are left to contemplate the possibility of a new, irreversible dynamic emerging for traditional mining towns like Kalgoorlie-Boulder.

Time will tell. But I hope that’s not the case.

Michael Cairnduff is a Director in Purple’s market-leading, bipartisan Government Relations team and an expert in the resources sector and in helping clients navigate channels of government at all levels. Contact Michael.

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