Thursday, August 14, 2014

At Australian Mint, History Thwarts a Golden Opportunity

Greg Cooke knows where gold worth hundreds of thousands of dollars is hidden. But like many people in this mining city, his problem isn't finding the precious metal; it is being able to recover it.
That's because the gold is in the form of dust that has accumulated in the brickwork of the old Perth Mint since its founding in the 1890s at the height of one of the world's great gold rushes. Decades of refining resulted in tiny fragments of gold embedding themselves in the fabric of the mint's historic melting house. To paraphrase a well-known bit of mining lore, there's gold in them thar walls!
"The gold in the walls isn't visible. You can't see it," said Mr. Cooke, a gold pourer at the mint. "But the moment you point it out to people, you see their eyes darting around the room with excitement."
Security is unobtrusive in the melting house, which was decommissioned in 1990. On any given day, tourists seeking a fix of Australia's gold rush history wander around the room pretty much undisturbed though they are within spitting distance of the secret hoard.
"I'd love to have a scrape," said Sacha Hibbitt, a 19-year-old student from England who was visiting Australia with a friend. "I like gold, and it would be nice to sell to pay for our trip."
It is a different story at the mint's current gold-refining hub near Perth airport, 10 miles away. There, the mint doesn't allow visitors and all employees must be vetted by the police's Gold-Stealing Detection Unit—nicknamed the "gold squad." To get to work requires passing through something like airport security, including metal detectors, while employees' every move is captured by cameras.
In 2011, the Perth Mint produced the world's largest gold bullion coin, weighing one ton and worth about US$50 million. The coin had its own security detail on a recent roadshow around Europe and Asia, even though it takes heavy-lifting equipment to move it around.
When 14 of the 15 old furnaces in the Perth Mint's melting house were scrapped, they were crushed and around 18 kilograms of gold was recovered, worth around US$800,000 at today's prices. That inspired management to look a little higher, sending a young worker up for days to scrape the ceiling for gold.
"It is one of those old corrugated roofs, so we got a young kid on a cherry picker, hoisted him up with a wire brush and told him to start scraping," said Mr. Cooke. He recovered an extra 1.5 kilograms.
Around the time the mint was founded in the 1890s, thousands of people were working on gold deposits in Western Australia. Among them was a young American engineer named Herbert Hoover, who managed the Sons of Gwalia mine for a year before returning to America. He became the 31st president of the U.S. in 1929.
Nuggets unearthed in the red clay of the Outback were brought to Perth to be melted down into gold bars or coins.
How the gold came to end up in the mint's walls is explained by the old technology. For decades, gold was refined using charcoal and coke, which were variable in temperature. When the furnaces got too hot, sometimes reaching 1,700 degrees Celsius (3,092 Fahrenheit), it caused the gold to vaporize and lodge itself in the brickwork.
In the 1950s, officials became so worried by the scale of the losses that they installed a device in the mint's main smokestack to catch gold dust.
Mr. Cooke believes there is still more gold in the walls of the mint. "All I want to know is who does the cleaning?" said Julie Bitton, 48, who was visiting the mint from New South Wales with her 14-year-old daughter, Marley.
Still, harvesting the precious metal isn't likely to happen soon, if at all. Gold's appeal cuts little ice with Western Australia's heritage officers who demand the walls remain untouched because of the building's heritage listing. This year's massive renovation of the old mint, which stands on the same site where it was established, excluded the melting house.
"It is important that works to heritage places are undertaken with care to try to protect the elements that tell the individual stories of a place," said State Heritage Office Executive Director Graeme Gammie. That includes protecting old woodwork and even original paint.
Disappointed prospectors should draw comfort from the fact that gold is found in plenty of unusual places—from termite mounds to the human body.
Last year, Australian scientists found that eucalyptus trees in the Outback were drawing gold particles up from the soil via the trees' root system and depositing them in their leaves and branches. Alas, these nuggets are only about one-fifth the diameter of a human hair.
Back at the old mint, Mr. Cooke says the brick walls aren't the only hidden store of gold. Officials carry out nearly 50 gold-pouring demonstrations for tour groups each week, and residue of the precious metal that remains in the clay-and-graphite pots needs to be recovered. Every two weeks, the pots are crushed to recover gold worth as much as US$200 apiece.
"We lose a gram of gold a day in the furnace or the pots or from spilling," Mr. Cooke said. "That is an ounce a month and might not sound like a lot, but it is a lot for our accountants."

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