Mining town aims to start gold rush
FROM RACHEL BRIDGE
IN SYDNEY
ONE of Australia's oldest gold mining communities is fighting back against the Bank of England's decision to sell off its gold reserves with a bold plan to hoard millions of dollars worth of gold bars.
Dozens of local business owners in the remote mining town of Kalgoorlie in Western Australia have joined forces to buy gold in the hope of reversing the gloom that overhangs the metal, which has fallen by more than 10 per cent in value to US$255.50 since Gordon Brown announced the Bank's sales two months ago.
The Kalgoorlie Gold Fund, whose members include a head chef, a shopkeeper, an accountant and local business owners, have already spent more than A$1 million (about œ0.4 million) buying gold bars, and organisers hope to increase that to more than A$10 million by the end of the year. The bars, which are being poured locally by Australian Gold Refineries, are being stored in a secret location in the town.
Graham Thompson, one of the founders of the fund, says: "What people outside Kalgoorlie don't understand is that if anyone knows what is happening in the gold market, the people of Kalgoorlie do. We are exposed to it more than anyone else anywhere in the world.
"We have Australia's biggest mine on our doorstep and four of the largest gold-producing companies in Australia in the area. Britain's loss will be Kalgoorlie's gain. We have no doubt that in five years' time Britain will be buying gold again at about three times the price. The British Government's call to sell gold is foolish because gold will eventually return as the benchmark of world currencies."
Kalgoorlie boasts Australia's biggest mine, Deep Pit, and its fortunes continue to depend heavily on gold. The recent fall in the gold price has resulted in the loss of hundreds of local jobs and a slump in the value of real estate in the town.
The launch of the Kalgoorlie Gold Fund comes as the town prepares to play host this week to 810 delegates at the annual Diggers and Dealers Gold Mining Forum, which is traditionally attended by all the major players in the Australian gold mining industry.
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