The following material is drawn from Aussie Sapphire:
"Sapphires were first discovered in Australia as early as 1851 when they were found at the Cudgegong and Macquarie Rivers during the Gold Rush period. Sapphire was found alongside gold and tin in many highland regions during prospecting and mining activity.
The largest and most economic sapphire deposits are in the New England region of New South Wales (NSW) around Inverell and Glen Innes, and central Queensland around Anakie and Rubyvale (with a smaller deposit further north at Lava Plains). The New England gemfield is said to produce Australia’s finest blue sapphire with Queensland sapphire renowned for their range of colour (including yellow, green and parti sapphire).
Sapphire was not mined commercially in NSW until 1919 when a rich area on Frazers Creek near Inverell was worked by CL Smith. This encouraged more mining in much of the sapphire bearing area of Glen Innes and Inverell which continued for 10 years until the Great Depression. Large scale commercial mining did not resume until 1959 when prices for rough increased due to a shortage from the traditional sources in South East Asia.
At the height of the sapphire boom in the 1970’s, there were well over 100 mining plants operating in the New England region (Mumme, 1988). There was some consolidation of the industry during the 1980’s in response to lower prices and exhaustion of some of the very rich alluvial sources in the area. Market conditions have continued to be difficult resulting in a decline in mining activity within the region there are now only a very small number of commercial miners still operating.
Within the New England gemfield, sapphires typically occur in Quaternary and Tertiary alluvial deposits in both present day watercourses and fossil drainage systems. The sapphire-bearing gravel layer (or wash) varies in thickness and depth but may be up to a few metres thick in some palaeo-alluvial channel systems. It is thought that most of the sapphire was derived from the weathering and erosion of volcanic ash deposits (volcaniclastic rocks) that were erupted onto the earth’s surface during early explosive phases of volcanic activity (Facer & Stewart, 1995). These deposits were then distributed and concentrated along drainage channels.
Within the New England region, these processes have combined to create major sapphire deposits along Reddestone Creek, Wellingrove Creek, Kings Plains Creek, Horse Gully, Frasers Creek and Swanbrook. In these areas, sapphire is commonly found in association with pleonaste (Black Spinel MgAl2O4) and zircon. Australian sapphires are typical of corundum formed in iron-rich alkali basalt terrains and they have similar gemmological properties to those from other such deposits found in Thailand, China and Cambodia. The colour is quite saturated compared to sapphires found in some other resources, for example the Geuda sapphire of Sri Lanka which is extremely pale before heat treatment to intensify colour. Colour zoning is also common in Australian sapphire and may appear as hexagonal crystal growth patterns or parallel to the prism (Mumme, 1988; Sutherland and Webb, 2000)."