You are referring to the practice of "high-grading", which in the context of mining refers to the act of workers stealing the most valuable ore for the private extraction and use of precious metals. This has always been a big deal, but it generally applies to gold more than other precious metals: silver is the slut of precious metals, meaning it that is usually caught cohabitating with other molecules. This means that it must be extracted for the ore matrix as a compound and then the compound must be broken apart, usually through the use of heat and other chemicals. Because silver was historically valued at a rate of one tenth that of gold, miners were rarely inspired to steal silver ore for private milling, because of the lack of value of the difficulty in extracting the metal.

Gold, on the other hand, presents a real opportunity for high-grading. This is because a little gold has always been worth a great deal and gold is not a slut - like silver - so it is usually found in a free state, unbound with other elements. That means that gold only has to be "hammered out of the ore matrix and then extracted by some other method. Of course, the circumstance and the nature of "some other method" defined whether high-grading would be practical.

In most modern mining in the American West, for example, the goal is to retrieve - and extract - microscopic gold that is often less than one ounce per ton. Milling requires the processing of an enormous amount of ore through crushing and chemical treatment to tease out the free gold. This sort of ore does not present the possibility for theft in the mining phrase. The mill, however, is scrutinized closely, since theft at that stage is a real possibility.

Historically, miners dealing with rich gold veins found opportunities for theft and private processing of the richest ore. A miner could opportunistically "pocket" a gold-ladened rock in order to walk away from his shift with a healthy augmentation of his salary. Mines chasing these sort of pure gold veins were relatively rare, but they did exist, and when they did, miners found opportunity and inspiration to steal from the mine owner.

Not surprisingly, mine owners did what they could to prevent this sort of theft. Mines frequently had changing rooms that were watched carefully, and not surprisingly miners' unions often pushed back on these sorts of invasions of their privacy. This was at the heart of the early twentieth-century gold mines of Goldfield, Nevada, a mining district noted for remarkably rich concentrations of gold deposits. The International Workers of the World - the "Wobblies" - declared a strike over the institution of supervised changing rooms (hoping to preserve opportunities for high-grading). Of course there were other issues, and to a certain extent, the strike pitted "American" mine owners against East European immigrants. People were shot and union leaders were framed and convicted. It was an ugly chapter in the history of mining, and the Wobblies had their back broken in Goldfield but to answer your question, the heart of the controversy was high-grading.

I ran into a nice account from California's Grass Valley, home of one of the richest and longest-lasting gold mines in the US, the Empire. F.D. Calhoon, in his memoire of growing up in the area, recalled a tradition associated with high-grading.

The following is an extract dealing with this from my forthcoming book on The Folklore of Cornwall:

F.D. Calhoon, in his remembrance of ethnic groups in the mining region of Grass Valley, California, refers to a late example of tommyknockers, the underground supernatural companions of North American miners. Published in 1986 but recalling a time earlier in the twentieth century, his first-hand account tells how Cornish immigrants milled ‘high-graded’ gold ore in cellars below their kitchens. Some workers were known to steal these valuable samples from mines and then to hammer the rock apart to retrieve the precious metal.

The subterranean pounding of their hammers raised questions among the children, but parents dismissed the noise caused by the illegal high-grading by drawing on the belief in tommyknockers.

And here is a quote from Calhoon that I use:

Supposedly, the ‘little miners’ gathered under the house where children were especially good. If they listened, and were real quiet after they had gone to bed, and were supposed to be going to sleep, they just might hear their little friends hammering away with their tiny single jacks. It is surprising how many residents of the mining towns still tell of being lulled to sleep by the rhythmical pounding from deep below. If the rock was especially hard, and the pounding unusually loud, the children were told that the tommyknockers must have been using double jacks the evening before.

Source: F.D. Calhoon, Coolies, Kanakas and Cousin Jacks: and Eleven Other Ethnic Groups who Populated the West during the Gold Rush Years (Sacramento, California: Cal-Con Publishers, 1986), pp. 320-1