MINING-BIG BUSINESS IN NEVADA
By Chet Yarbrough
Nevada mining makes an outsized contribution to the State’s economy. Tourism, gaming, mining, and ranching are Nevada’s “big four” industry groups. According to nevadaworkforce.com, Nevada’s mining industry increased employment by 12.2% between Q2-2011 and Q2-2012, the largest percentage gain in any of Nevada’s four main industries.
Over 15,000 people are directly or indirectly employed in the Nevada mining industry. Average annual wages are estimated at $88,000. NMA estimates Nevada taxes collected on worker contributions, and mining industry sales are near $417 million in 2011. (Their calculation is based on a combination of state, county, and federal taxes.)
American Vanadium Corp. plans to develop the Gibellini Mine Project in Nevada, the only vanadium mine operation in the United States. Michael Doyle, Executive Vice President of Operations in Sparks, Nevada said, “The projected life of the mine is 7 years with significant additional resources currently being evaluated.” In 2011, Bill Radvak, CEO of American Vanadium, said “We are in the permitting phase.” In a best case projection, the mine would be open in late 2013.
The planned location for the mine is 25 miles south of Eureka, Nevada—off State Road 379, 325 miles north of Las Vegas and 346 miles east of Reno. Though not near Nevada’s big cities, it will impact employment in the Eureka, Ely, and Elko communities.
American Vanadium estimates employment of 130 people at the time of peak development with operating personnel averaging 91 employees during mine operation. Doyle said, “The initial capital investment is estimated at nearly $100,000,000 with infrastructure costs, including on site and offsite development for project access, material transport, water, sewer, and administrative office construction.” The new mine will have wide impact on the entire state with purchase and/or lease of manufactured material and equipment for development and operation of the mine. Estimated tax payments from operation of the mine are $12.3 million, excluding tax contribution from employee spending.
Vanadium, discovered in 1801, is a naturally occurring chemical element. Its chemical characteristics give it wide use in industrial and medical industries. Without knowing what uses will be made of vanadium from the Gibellini mine, it is interesting that American Vanadium recently signed a Memorandum of Understanding with Germany’s Gildemeister AG, a maker of vanadium redox flow rechargeable batteries. A representative of American Vanadium explained, “Rechargeable batteries for electrical-storage offers renewable energy production and optimization of the nation’s energy grid.” A successful demonstration of a vanadium redox flow battery was shown in the 1980s. In these batteries, the energy is actually stored in the vanadium, which represents 40% of their cost.
American Vanadium Corp. will be a welcome addition to Nevada’s mining industry. Gibellini mine production has the potential for creating ancillary businesses that may directly or indirectly benefit Nevada’s economy.
Not far from Nevada’s southwest border, about 100 miles from Las Vegas, Molycorp is planning to reinvest in a rare-earth mine. There are 17 rare earth metals in the periodic table. These rare earth metals are important chemical elements in everything from Mercury-vapor lamps to lasers that are used for both medical and industrial applications. Ninety percent of these rare earth metals are produced in China where 65 percent of the metals are consumed. Uses of rare metals vary from smartphones, electric car batteries to missiles and energy facilities.
Molycorp is a world-wide company with 26 locations in 11 countries. It employs 2,700 people. Molycorp mines 13 of the 17 rare earth metals. It began mining for bastnasite, a rare earth ore, at Mountain Pass mine on the California/Nevada border in 1949.
Molycorp is planning to re-invest an estimated $532 million in the Mountain Pass Mine. After a nine-year hiatus, the mine re-opened in 2011. The rare earth metals sought in the reinvestment are Cerium, Lanthanum, and Yttrium (all found in basnasite). Cerium is used in Carbon-Arc lights to illuminate movie sets and projector screens. It is also an element in the petroleum refinement process. Lanthanum is used in glass and camera lenses. It is also used in X-ray films and different types of lasers. Yttrium is used in microwave filters, laser systems, and alloys of chromium, aluminium (a chemical element in the boron group), or magnesium because of its strengthening qualities.
Mountain Pass is the only rare-earth-metals mine in America. The reinvestment plan for the mine is to employ 200 people who will operate 3 shifts on a 24/7 basis. Many of these employees will commute from Las Vegas. Molycorp’s website shows they are presently looking for a Journeyman Plant Mechanic, Mine Operator, Plant Mechanic A, Plant Mechanic B, Journeyman Electrician, and Operator Trainee. The molycorp.com website is a good place to learn about company careers, benefits, values, and history.
Nevada is a storied mining state. The 1858 Comstock Lode opens silver mining in Nevada. In the 1870s, gold is discovered in Eureka County but the low-grade deposits are too small to create much excitement; at least until 1961, when Newmont Mining Corporation moves into the Carlin area and begins producing gold from low-grade deposits. In the late 1970s, when gold prices were deregulated, gold mining in Nevada boomed. Newmont Mining Corporation continues major mining operations in Nevada. They employ 40,000 people worldwide. In 2011, 14 open-pit mines and 4 underground mines were operating in the Carlin area. On March 8, 2013, Newmont’s website lists 38 job openings in Nevada.
By 2009, Nevada is producing 79% of all the gold in the United States. In 2007, 6,037,000 ounces of gold were produced in Nevada. The most prolific gold producing mine in Nevada is the Betze-Post Mine, owned and operated by Barrick Gold, the world’s leading gold producer.
The mine is operated by Barrick Goldstrike Mines, Inc. It is located in the upper middle part of the State, 75 miles southwest of Elko. They have 1503 full time employees, 200 contract employees, and produce 1,819,115 ounces of gold and 117,750 ounces of silver. On March 8, 2013, Barrick Mines website lists 57 job openings in Nevada.
Another gold mining company in Nevada is Scorpio Gold Corporation that holds a 70% interest in the Mineral Ridge Gold Mine (Waterton Global Value L.P. owns the other 30%). The Mineral Ridge Gold Mine is approximately 217 miles northeast of Las Vegas. It is one of the smaller gold and silver mining operations in the State. It produces both gold and silver with most recent production showing 13,951 ounces of gold and 7,907 ounces of silver. The Mineral Ridge Mine employs 46 full-time personnel and 2 contract employees.
An often overlooked and underappreciated mining operation in the United States is sand and gravel mining. It is certainly one of the most accessible natural resources. It is a critical component of the construction industry. Construction sand and gravel valued at $6.4 billion was produced by 6,500 mining operations in 50 states in 2012 (2013 USGS Minerals Information Report). Sand and gravel is used in road bases, concrete aggregates, blocks, bricks, pipes, plaster and many other construction industry materials.
In 2008, Sand and Gravel was the third most valuable commodity produced in Nevada. Sand and gravel was valued at $225 million. The most important source of sand and gravel aggregate is in the Lone Mountain area in northwest Las Vegas. One of the five biggest producers in 2008 was Impact Sand and Gravel. Each of the big five in Nevada produced more than 900,000 tons of aggregate.
Impact Sand and Gravel, located in Las Vegas, started in 1996 as Cactus Sand and Gravel with incorporation as Impact Sand and Gravel in 1999. Alora Edwards, in the Recruiting Administration Department explained, “Currently, there are about 60 employees at Impact Sand and Gravel.” She said, “That includes in office and out in the field with approximately 45 full-time employees and 15 part-time.” All full-time employees have medical insurance.
When asked what skill sets are required at Impact Sand & Gravel, Edwards said, “The skill set we look for in an individual varies depending on the position but with all of our employees or candidates, we look for people who match our company and core values.” There is a social consciousness in the employment practice of Impact Sand and Gravel. She explained, “We have hired several homeless people to fill security and labor positions.”
Just as in any mining operation, Impact looks for equipment operators, mechanics, accountants, admins, leaders, scale house operators; etc. Edwards said, “At the moment, our most difficult position to fill is the Mechanics position.” She adds, “In general, we do have some difficulty finding qualified individuals to fill our higher Management positions.”
Impact operates four quarry sites in the Las Vegas area– one near Cactus and Maryland Parkway, one at Rail Road Pass, one at Lone Mountain, and one in Boulder City. When asked about how the business is affected by the economy, Edwards said, “The economy hurt almost everyone in 2009 and 2010.” She said, “Fuel prices and the lack of construction have been the biggest challenges, ” and added, “Obama care is expected to more than double our health insurance costs.”
In terms of direct employment, Nevada’s mining industry is at the bottom of nonfarm payroll employment but the industry directly employs 16,300 full-time employees according to the Nevada Workforce Research and Analysis Bureau. Mining is at the top of employment percentage increases on a year-to-year comparison of the four major industries in Nevada.
The Bureau of Land Management reports, “In 2011, the top four gold producing countries in the world were #1 China, #2 Australia, #3 USA, and #4 South Africa. They go on to say that “Nevada has the largest mineral materials program in the Bureau in terms of volume and value of mineral materials disposed.” In production, Nevada is ranked (“Gold Investing” newsletter -January 13, 2011) as the fourth largest gold producer in the world. “In 2011, Nevada’s gold mining industry produced approximately $8.8 billion in gross revenue” (Gannett report-March 5, 2013).
The Nevada Mining Association estimates that “Since 1990, mining has contributed more than $100 million each year to Nevada and local economies.”
Mining is big business in Nevada.
(A Version of this Article is Posted in the “Las Vegas Review Journal” 3/24/13)