The Scottish Gold Mine: Worth its weight in gold

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We review the benefits of the mine for locals and the industry.

When Scotland’s first commercial gold mine won planning approval last october it was the result of 20 years of hard work by the company behind it, and promises new jobs for a rural area. Kathryn Bishop looks at the mine’s potential benefit to the locals, Scotland and the UK jewellery industry.

The words Scottish and gold may conjure up images of an aged bottle of whisky, but very soon this pairing will mean so much more, especially for the UK jewellery industry.

After 20 years of waiting, Scotgold Resources and the locals of Cononish and Tyndrum in the west of Scotland have finally received the green light for a commercial gold mine in the area, creating around 50 jobs for locals in an area which, at the moment, is frequented mainly by those passing through en route to places of a little more interest.

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For many of those supporting the project, their involvement has already spanned several years and has helped Scotgold and its gold mine proposal win support from MSPs, jewellers and the Scottish tourism board.

How exactly the mine will impact the jewellery industry in Scotland and the rest of the UK is yet to be determined as it will not be fully operational until the summer of 2013. Despite this, the development of the mine is not in the early stages by any means; its route to the here and now has been a long road and it has certainly not been plain sailing.

The Cononish mine was acquired by Scotgold in the 1980s but the financial crash of that decade led to further construction plans being put on hold, thus the mine lay dormant through the 1990s until Scotgold initiated its planning proposals once more.

Last year the mine had its planning permission rejected due to concerns about the tailings from the mine – the piles of rocks that are extracted – and how they would affect the neighbouring Loch Lomond National Park. It was said that the tailings would disrupt the natural landscape surrounding the mine. Scotgold answered this criticism by working out a way to make the tailings smaller and the National Park relented on the basis that its long-term conservation plans have “the vision to see beyond the temporary life of the gold mine”.

The limited life span that the National Park is referring to is the mine’s eight to 10 years’ of planning permission that it was finally granted in October. This does seem like a short life span for a mining project but Scotgold chief executive Chris Sangster says that the company will continue to work in the locality to source other gold deposits to try to extend the longevity of gold mining in the Cononish area.

Despite the initial planning permission rejection, however, the majority of feedback about the Cononish mine has been positive and many jewellers in Scotland are said to be pleased that planning permission has finally been granted for the mine.

Vivien Johnston is one member of the industry who has been supportive of the mine since first hearing about it four years ago. As founder of ethical jewellery brand Fifi Bijoux and a Scot herself, she argues that the mine will provide an economic boost to a remote rural area that at present is at best a stopover for walkers or people travelling further north or west.

She first contacted Sangster to find out whether the mine would be environmentally conscious and was pleased to hear that Scotgold planned to use gravity and flotation mining techniques that utilise water and biological enzymes to extract the gold, avoiding the use of environmentally harmful cyanide. Being eco-friendly won’t hamper production outputs because, according to Sangster, the use of biological mining techniques extracts a fairly similar amount of gold as mining with cyanide does.

“After my initial conversation with Chris I thought well that’s that then, I assumed that the planning would go through without question,” says Johnston. So when the permission request was denied Johnston was shocked, as she believed the application to be a “no brainer”. “There’s not much by way of industry [nearby], so the local community are moving out when they get older, moving to the cities,” she explains.

With this in mind Johnston, who was named as one of the Future 100 Young Social Entrepreneurs of the Year by Global Entrepreneur Week in November, strongly believes the opening of the mine would be a boost to the local area, bringing jobs and industry to the community and potential tourist attractions such as science or geological centres, on-site jewellery workshops and gift stores.

After the planning was rejected Johnston contacted Sangster again to see if she could offer some advice on the jewellery industry and, moreover, the traceability of the gold, which to date she felt had been overlooked, despite having so much potential.

“Jewellery is an aspect that had always been a consideration for us but we wanted to wait until we had more scope on demand,” says Sangster. “The mine is first and foremost a commercial mine, but it has the unique nature of being in Scotland and also being cyanide free [so] if there’s an opportunity for us to contribute towards the UK jewellery industry then that’s an advantage.”

Since then Johnston has became a consultant of sorts for Scotgold, liaising with jewellery and gift retailers primarily in Scotland to collect their thoughts on whether Scottish gold could help them to develop and grow their businesses.

“For retailers and consumers to have brand awareness of Scottish gold would be great,” says Johnston. “Look at Canadian diamonds, for example, as a quality product. For us in Scotland the gold has a romantic connotation which fits with Scotland being known for luxury products such as salmon, whisky, cashmere and Harris Tweed.”

Likewise Amy Dalrymple, policy and research manager at the Scottish Chambers of Commerce, which offers business advice and support, says the mine has been cause for excitement.

“We were approached by Chris Sangster a while back which is how we became aware of the mine and he said it might be of interest and could be a boost for Scotland,” she recalls. “We’re really excited about it because it adds another facet to Scotland as a brand, especially for jewellers.”

It is expected that Scottish gold will demand a small premium, much like Fairtrade Fairmined gold, due to its traceability, rarity and the fact it is made in Britain. But, says Sangster, the mine will always remain a commercial venture first and foremost, which is its primary aim.

“We still expect to produce 20,000 ounces of gold a year, something that still stood in our last assessment of the area,” he reveals.

Of the approximate half-ton of gold that Scotgold will produce, 25% will become known as Scottish gold and will be processed on site at a small facility before it is refined elsewhere in the UK. The remaining 75% will be commercial gold that will be sold on in its concentrated form to smelters that can then use it for any aspect of industry, whether jewellery, electronics or the automotive business.

It is clear that the Scottish industry is ready to support Scottish gold, and many are open to a special mark being created especially for Scottish gold, to differentiate it and potentially add even more value to articles with a Scottish gold emblem stamped inside. One only has to consider the impact that Welsh gold has made due to last year’s royal wedding.

Catherine Middleton’s wedding band was made from Welsh gold and it had a huge knock-on effect for brands such as Clogau Gold, which received a swell of interest in its products from domestic and international markets as a direct result.
Both Johnston and Sangster say they would be supportive of such a mark, and Johnston adds that she would even consider creating a separate line of branded Scottish gold jewellery to sit alongside her ethical Fifi Bijoux jewellery collections.

Scott Walker, Assay Master and chief executive at the Edinburgh Assay Office (EAO) explains that a Scottish gold mark could raise the profile of Scottish gold while increasing awareness of hallmarks and branding marks in terms of the protection they offer consumers.

“We can see the real upscale benefits of the mine and [applying] a mark to Scottish gold items is something we could do to signify Scottish gold as it will be in the interest of the consumer to know what they are getting,” says Walker.

At present the EAO is helping to facilitate discussions with Scotgold, jewellery retailers and designers in Scotland. “We see ourselves as a key company in the process and through our trade links we want to provide support for the mine,” adds Walker.

Looking ahead, Scottish universities and galleries also hope to get involved with Scottish gold. Duncan of Jordanstone College of Art & Design (DJCAD) has been in talks with Scotgold and Johnston about future degree projects and one of Scotland’s foremost galleries has approached Johnston to say it would love to support the mine by hosting a future exhibition of graduate jewellers’ work made using Scottish gold. Dundee University’s geo-science students have also met with Scotgold, armed with “lots of questions”.

For now, however, the focus is on getting the mine functioning. “In three months we should be granted our mining lease,” explains Sangster. “Then we’ll begin pre-production work in the summer and eventually start full mine production in 2013.”

The mine is expected to produce about 20,000 ounces of gold and 80,000 ounces of silver per year. Further employment opportunities will also be created through the companies working with Scotgold such as logistics and contractors. The company has previously said the project will boost local tourist numbers and spend in the area. Beyond the value of the gold and silver mined at the site, it is estimated that additional economic activity could generate £80 million for Scotland through the wider supply chain.

While £80 million might seem an impressive figure, it is still small fry in terms of more traditional Scottish exports: the Scottish tartan industry is worth £350 million a year, salmon is worth £500 million, whisky brings in £3 billion and the oil industry based in Aberdeen brought in £32 billion in 2010. But the close-range effects on the local industry are not to be sniffed at, and neither are the more far-reaching branding opportunities. After all, just look at what Wales has managed to achieve this year with barely a nugget of Welsh gold left to work with, and now imagine what Sangster and his team can deliver with “more gold than we can process on site”. Get ready for the Scottish gold rush.

EDITORS’ NOTES: As supporters of the No Dirty Gold campaign we’re excited about Scotgold’s prospects. Our customers want to know where their jewellery comes from and as a proud Scottish company we will be exploring the option to source Scottish gold.

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