Gold price brings prospectors to the Highlands

The high price of gold, reported by Geoff yesterday, is giving a clear signal to a mining company in the Highlands of Scotland that it should start production from a gold mine that was first drilled 20 years ago, but has never been commercially worked because the price of gold did not provide enough incentive to the producers. However with the price of gold now at $1100 per ounce, mining operations could become profitable. Scotgold owns the Coronish mine near Tyndrum, a small village which is en route to Glen Coe, Fort William and Skye. Next month it will apply for planning permission begin mining operations in 2010 and this report from The Guardian says that Cononish is expected to start producing 200kg of gold a year at the mine site when full-scale mining begins in 2011 – enough to produce 30,000 wedding rings a year – and another 500kg each year by sending rocks for processing elsewhere.

Cononish will also produce roughly 17 tonnes of silver. It is holding discussions with the local community, which is already planning to open a gold mine visitors’ centre next May. John Riley (any relation??) is chairman of the local community council and the area’s community development trust and says “I don’t think there’s any locals who are opposed to it or worried about it. It will bring forth many benefits to a tiny community like this.” The local SNP councillor is also keen on the opportunity to create long term jobs in the area and relieve the village’s heavy dependence on tourism.

It will also bring some negative externalities: production will result in 500,000 tonnes of waste, or “tailings” – which will be stored in small lagoons at the mouth of the mine behind high-sided dykes – which hill-walkers on surrounding mountains, such as Ben Lui, one of the area’s most popular peaks, could resent, and Coronish have to satisfy environmental regulators that there is minimal risk of contaminating the river Tay. The story was discussed on Wake up to Money yesterday morning (12 November); you can download the programme from the BBC website here, or get a link to the podcast, for the next few days.