A Simple Explanation - Opal is formed from a solution of silicon dioxide and water. As water runs down through the earth, it picks up silica from sandstone, and carries this silica-rich solution into cracks and voids , caused by natural faults or decomposing fossils. As the water evaporates, it leaves behind a silica deposit. This cycle repeats over very long periods of time, and eventually opal is formed. The solution is believed to have a rate of deposition of approximately one centimeter thickness in five million years at a depth of forty meters.
A Detailed Explanation - Occasionally, when conditions are ideal, spheres of silica, contained in silica-rich solutions in the earth form and settle under gravity in a void to form layers of silica spheres. If the process allows spheres to reach uniform size, then precious opal commences to form. For precious opal the sphere size ranges from approximately 150 to 400 nanometers producing a play of color by diffraction in the visible light range of 400 to 700 nanometers.
Each local opal field or occurrence must have contained voids or porosity of some sort to provide a site for opal deposition. In volcanic rocks and adjacent environments the opal appears to fill only vughs and cracks whereas in sedimentary rocks there are a variety of voids created by the weathering process. Leaching of carbonate from boulders, nodules, many different fossils, along with the existing cracks, open centres of ironstone nodules and horizontal seams provide a myriad of molds ready for the deposition of secondary minerals such as opal.
Much of the opal deposition is not precious. It is called "potch" by the miners, or common opal by the mineralogist, as it does not show a play of color. Opaline silica not only fills the larger voids mentioned but also may fill the pore space in silt and sand size sediments cementing the grains together forming unique deposits, known as matrix, opalized sandstone or "concrete" which is a more conglomeratic unit near the base of early Cretaceous sediments.
The many variations in the types of opal depends on a number of factors. In particular, the climate provides alternating wet and dry periods, creating a rising or more importantly a falling water table which concentrates any silica in solution. The silica itself is formed either by volcanic origin or by deep weathering of Cretaceous clay sediments producing both silica and white kaolin often seen associated with the Australian opal fields. Special conditions must also prevail to slow down a falling water table in order to provide the unique situation for the production of its own variety of opal.
The chemical conditions responsible for producing opal are still being researched, however some maintain that there must be acidic conditions at some stage during the process to form silica spheres, possibly created by microbes.
While volcanic-hosted and other types of precious opal are found in Australia, virtually all economic production comes from sediment-hosted deposits associated with the Great Australian Basin. Australia has three major varieties of natural sediment-hosted precious opal - black opals from Lightning Ridge in New South Wales, white opals from South Australia, and Queensland boulder and matrix opal.
Boulder Opal forms in a slightly different method to other types of opal, forming inside an ironstone concretion. The concretion was formed due to ionisation, from sedimentary deposition. By definition, they are ionised concretions of varying hardness with an approximate opal composition of SiO2at 28%, Fe2O3 + AL203 at 68% and H2O at 1% composition.