Though gold was discovered in Australia as early as 1823, news of its existence was suppressed for fear of a convict uprising. However, transportation ended in 1840 and the California gold rush of 1848 aroused sufficient interest for Edward Hargrave's discovery of gold at Summer Hill Creek (February 1851) to stimulate a rush of prospectors to New South Wales.

So many people left Victoria that the colony established a Gold Discovery Committee offering a £200 reward for a payable gold find within 320 km of Melbourne. In June 1851 James Edmonds discovered gold at Ballarat (also where the second largest gold nugget found in Australia - the Welcome Stranger - was unearthed) and more important finds followed. Within three years the population of Victoria had quadrupled.

Gold was also found in Queensland and discovery of the Palmer field caused a "rush" in the 1870s. In Western Australia the most important discoveries were at Coolgardie and Kalgoorlie in the 1890s. Prospecting in the Northern Territory was hindered by the climate and remoteness of the area. Productivity only improved after 1874 when Chinese miners were introduced; but the finds did not match those in other localities. Gold was also mined in South Australia and Tasmania, but the finds in those colonies were likewise less productive than other areas.

The discovery of gold brought social problems. The gold rushes of the 1850s attracted Chinese miners who were resented by the Europeans and disturbances such as the riots at Lambing Flat resulted in stricter immigration laws. In Victoria each miner had to pay thirty shillings a month for a licence to prospect and this, combined with other factors, resulted in the Eureka Stockade uprising at Ballarat of 1854. After this miners were allowed to dig anywhere in the colony for one pound annually.

Today the Kalgoorlie/Coolgardie area in Western Australia produces about half the Australian gold output. In early 1980 record high prices were recorded worldwide when gold reached US$850 an ounce (28 g). Many old, abandoned goldmines were brought back into operation. In 1978-79 32 goldmines were in production in Australia, 27 of which were in Western Australia. Total gold production in 1996 was 17,372 kg.

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