Still gold in them thar hills

AUSTRALIA - The beam of a miner's lamp picks out a tiny yellow dot embedded in a freshly blasted band of white quartz. "That's a little ripper," says engineer Mark Shannon, as colleagues working in ankle-high grey sludge, 250m below the surface, prepare to set more explosives.

More than 150 years after the discovery of gold sparked a digging frenzy in Victoria, prospectors are again striking it rich as another gold rush takes hold.

Better equipment and sophisticated geological mapping are enabling mining companies to find deposits which were beyond the reach of their 19th century forerunners.

Backbreaking work with picks and shovels has been replaced by huge drilling machines, powerful bulldozers known as boggers, and monster trucks capable of hauling 40-tonne loads of ore to the surface.

Victoria once produced 40 per cent of the world's gold, and eight companies have now returned to the golden triangle by Ballarat and Bendigo.

About $6 billion of gold was mined in Victoria between the 1850s and World War I, when a lack of manpower and coal made it impossible to keep the mines pumped free of water and mining leases became so fragmented that they no longer justified the capital investment.

The latest generation of mining companies believes that as much gold is beneath the surface as was extracted during the first gold rush - and hope to extract $770 million of the metal each year. "The old workings went to a depth of about 200m, but we'll go underneath them down to 800m," says geologist Joel Forwood, of Ballarat Goldfields, which poured its first ingot in December.

The company plans to mine 200,000 ounces of gold a year - $154 million at today's record price - which is the result of declining production in South Africa and increasing demand from the burgeoning middle-classes of India and China.

The discovery of gold in 1851 attracted tens of thousands of prospectors, from Cornish and Welsh miners to Chinese coolies and veterans of the California gold rush.

Ballarat and Bendigo started as shanty towns where the lucky few who found gold spent their money in tented brothels, dingy gambling and opium dens and makeshift bars that sold illegal grog.

Bullion was taken to Melbourne by coaches which were often plundered by bushrangers, despite their escort of troopers. In one of the few links with that era, a dedicated goldfields detective has been appointed to combat theft and fraud.

One of the new mines will tunnel beneath Sovereign Hill, a replica 19th-century town which attracts half a million tourists a year.

In the 1860s, 50,000 miners were in Ballarat. Now, a mining company employs a couple of hundred people. Although the brawls, brothels and bushrangers have gone, Victoria is reconnecting with its past.

"We have always had a reputation as a gold town so this gives us back our authenticity," says Ballarat mayor David Vendy.

"Miners here became so rich that they imported ice from Canada and drank more champagne than anywhere else in the world. Now we've got a second gold-rush. The buzz is back."