Precious opal is unique among gemstones. Each stone has its own individual pattern and range of colours, and its colours and patterns can change with the angle of view. The ever-changing rolls and flashes of colour make precious opal a gem of infinite interest.

Australia produces over 90% of the world's supply of precious opal, and probably all of the highest quality gems. The ex-mine value of Australia's opal output was estimated at over $A100 million in 1991, and more than half came from New South Wales in eastern Australia. The major opal producing areas in Australia are Lightning Ridge and White Cliffs in New South Wales; Coober Pedy, Mintabie and Andamooka in South Australia, and localities producing boulder opal in western Queensland. Over 99% of the most valuable black opal comes from only two localities — Lightning Ridge and Mintabie. Around $30 million worth of opals was produced from Lightning Ridge in 2005/06. On April 10, 2008 NSW Premier Morris Iemma announced the government would designate the black opal as the state's official gemstone.

Opal is a mineral consisting of hydrated amorphous silica with the chemical formula Si02.nH2O.

The New South Wales opal fields are all situated in arid inland areas, on ridges surrounded by black soil plains. The sedimentary opal deposits occur in deeply weathered Cretaceous rocks formed 65 to 135 million years ago within the Great Australian Basin. The opal is found at shallow depths in sedimentary rocks through which there has been considerable silica seepage into cavities and other structures. Gradual loss of water from the silica gel has resulted in hardening of the material and the formation of opal.

Host rocks contained a variety of voids formed by the weathering process, which leached carbonate from boulders, nodules, fossils, cracks, hollow centres of ironstone nodules and horizontal seams. Most opaline silica deposited is common opal (or potch). It does not show a play of colour. Opal also fills pore space in sand-size sediments, cementing the grains to form deposits known as matrix or opalised sandstone. Opal is often associated with lineaments or faults which break the rock, providing conduits for the movement of ground water. These have been found useful in locating opal at Lightning Ridge and sought in other states. In addition, opal has been found associated with Cretaceous palaeochannels in Queensland and Lightning Ridge.

Variations in the types of opal depend on a number of factors. Firstly the climate provides alternating wet and dry periods, creating a rising or falling water table which concentrates silica in solution. Deep weathering of Cretaceous clay-rich sedimentary rock produces both silica and kaolin. Silica spheres are deposited in a regular array in voids from a receding water table forming precious opal in a variety of host materials. The orderly arrangement of the spheres in a regular three-dimensional array creates diffraction and interference, producing the brilliant colours of precious opal. The range of colours is controlled by the size of the silica spheres and by refraction at the surface of the opal.

Mystery of black opals - structure of opal and the play of colour

The internal structure of an opal cannot be viewed with the naked eye, or even a regular optical microscope. The greater magnification (30,000 times) made possible by the electron microscope has shown that opals are made up of very small spheres of silica (000005–0.0004 mm in diameter) which have grown around a central nucleus.

These studies of opals, which were first conducted by Australian scientists at the CSIRO have revealed that the difference between precious and common opal is caused by the arrangement and size of the silica spheres.

Common opal or "potch" is usually made up of silica spheres of non-uniform size, with an irregular stacking, and sometimes with impurities such as clay minerals in the lattice. The irregularity of the array observed in common opal does not allow interference effects to produce diffracted beams of colour. Some varieties of common opal are made of silica spheres with diameters as small as 0.0001 mm, which is too small to cause diffraction effects in visible light, regardless of whether the spheres are regularly arranged or not.

Precious opal consists of larger silica spheres arranged in a regular pattern. The orderly arrangement of the spheres creates a regular three dimensional array of spaces or voids between the spheres. The brilliant colours of precious opal are produced by the diffraction and interference of light waves travelling through the transparent silica spheres and voids. The range of colours is controlled both by the size of the silica spheres (which determines the maximum wavelength that can appear) and by the refraction at the surface of the opal. For red light to appear the spheres must be relatively large (0.0003 mm in diameter). As most opal consists of spheres less than 0.00025 mm in diameter, red is not a common colour. If however, red does appear then the shorter wavelength colours will appear at other angles of viewing. Medium-sized spheres result in green and blue colours; while smaller spheres give violet colours.