Australia dominates the world's supply of opal, producing over 90 per cent of natural opal. Opal also occurs in Mexico, Brazil, Honduras, Hungary, Canada and the western United States of America. With the exception of Brazilian opal, these occurrences are in nearly every case volcanic in origin. They are generally of inferior quality compared with the Australian sedimentary opal. Nearly 100% of the world's top quality opal comes from Australia.

Australian opal is produced commercially in the states of New South Wales, South Australia and Queensland. It was estimated that the value of the total Australian opal production was $120 million for 1996-97. Of this, $82 million was from New South Wales, $40.6 million from South Australia, and $1.036 million from Queensland.

Despite its value, the Australian opal industry lacks vertical integration: it remains widely fragmented at every level from mining through to marketing. Generally, there is no dominant participant with a combined involvement at the mining, marketing and retailing levels of the industry.

Today, the Australian opal mining industry is made up of a large number of individual miners generally working their own claims. A single opal field is explored and developed by several hundred individual miners. Historically, the continued development of the industry has relied upon chance discovery.

Until recently, the small-scale nature of the industry was reinforced by state government legislation in New South Wales and South Australia which prevented the application of modern mining techniques and the amalgamation of mines into bigger and more efficient operations. Opal claims were restricted to 50m by 50m with a limit of two claims per person at any one time in NSW and 100m by 50m with a limit of one claim per person at any one time in SA.

The New South Wales government took steps to remove the restrictions on mining and exploration in that state and, as a result, in October 1989 legislation was passed allowing Exploration Licences for opal to be issued together with full size flow-on mining title.

This means that for the first time in New South Wales explorers can apply exploration techniques to areas capable of covering an entire opal field and upon discovery employ cost effective large-scale mining techniques to its development.

However, restrictions still apply to the established opal fields of the Lightning Ridge district and the main fields at White Cliffs, which have been declared reserves by the government and operate under the historical title system with associated restrictions on the type and scale of mining.

In Queensland, opportunities exist for further exploration and mining of opal by companies as well as smaller prospectors and miners alike. This is largely due to innovative measures passed in the 1989 Mineral Resources Act, which has encouraged exploration.