Outside of the rural communities, most Nevadans don’t understand the industry of mining, even though it accounts for a large amount of the state’s economy. Executives from mining organizations throughout the state recently met at the Reno offices of City National Bank to discuss their industry and dispel some of the common myths about miners.
Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. The magazine’s monthly roundtables bring together leaders to discuss issues relevant to their industries.
How healthy is mining in Nevada?
Dana Bennett: We contribute, at the latest count, over 11 billion to the state’s economy, or roughly 4.2 percent of the state’s GDP. Two years ago, when we did the mining round table, the economy was improving. Every industry in Nevada was seeing a turn around in job numbers, except mining. We were the only industry that was losing jobs when we met here two years ago. That has stopped, we’re not seeing job loss. That, combined with the growth in [mining] claims, [indicates] our health is pretty good right now.
Richard Perry: I believe there really aren’t too many major impediments slowing anything down right now. We have a great regulatory environment at the state level and a lot of activity. We’ve seen in the last year, July to July, an increase in mining claims of 12 percent. That’s a huge increase in a year. There’s a lot of activity going on and confidence that there’s investment and that this is a good place to do business.
Joel Lenz: The permitting time line is always a challenge for every company that is trying to put a mine into production. It’s a cyclical business so that the price of the metals or minerals that are produced follows the market and there’s really little control by the producer of what that price might be. We have to suffer what the market prices might be. If they’re going up, everything is really good. If they’re not, it certainly can be a very challenging environment to operate within.
How well is the role of mining understood in Nevada?
Bennett: A lot of folks don’t really understand the importance of the mining industry. The success of our emerging sectors in renewable energy development and advanced manufacturing is absolutely dependent on a successful and healthy mining industry. We produce the metals and minerals that are needed in all of those activities. The greatest challenge that we’re facing now is to encourage an environment where those operations can grow, be developed and expand. We’re looking at permitting challenges. Getting a mining operation from discovery to production can take five, six, seven, ten years. Some mines take longer. Those challenges limit the availability of the materials that are needed by our emerging sectors.
Tim Arnold: I don’t think we tell our story well enough and we certainly don’t get it out well enough. I’ve worked for a lot of companies in Nevada. I think Nevada, certainly rural Nevada, has a good idea of what we do. We need to tell our story, because we have a very good story. We do great reclamation, there’s wonderful things that we do. We tell each other that a lot, we just don’t necessarily get it out. And I’ve never figured out a way to do that. It’s gonna take a major event to be able to get the story out to your average citizenry.
What types of minerals does Nevada produce?
Perry: Gold is the number one [commodity in Nevada]. Number two is copper. We have two copper mines operating and [soon] we’ll have a third. That’s not a small amount. Gold was a little over $7 billion in 2017; copper was $414 million. The third biggest commodity produced last year was aggregate. [Nevada produced] forty million tons of aggregate with a net value of $313 million. Aggregate is crushed rock that’s used to make highways, concrete, all kinds of construction things. We go from aggregate to barite, gypsum, lithium, magnesium, diatomite, salt and perlite. We have four barite mines and three processing facilities in eastern Nevada. Barite is used for drilling mud and it responds to the price of oil. That was up seventy percent in 2017 because oil started to creep up. Gypsum is largely produced in Clark County, it’s their biggest industrial mineral down there. There are two large gypsum drywall plants, we’re a major exporter of that. Gypsum production has tripled and the value of that’s gone up a bunch. Recently, we had one mine and a lot of exploration going on with lithium. We have 204,000 claims as of the beginning of July, twelve thousand of those are lithium exploration claims.
Jim Faulds: It’s kind of cool being a state geologist for a state like Nevada. It’s the fastest-growing state in the country because of the tectonics of the state. We’re adding two basketball courts per year [of land] to the state. That’s cool. In terms of individual mountain ranges, we have more than any other state. We have more gold than any other state. We have more geothermal resources than any other state. I could go on and on; it’s a really neat place. It’s a rapidly evolving landscape, it’s changing before our eyes. It’s part of the reason we’re rich in mineral and geothermal resources but that makes us a complex state, geologically speaking.
What new mining operations are coming online?
Tim Dyhr: Pumpkin Hollow [Copper Mine] is back on track. We’ve got our underground contractor hired. We’ve placed orders for a lot of the major process equipment and are finalizing contracts with a number of suppliers. We’re coming on board with the first phase of our project, underground mining. It’ll be a big construction project. It’ll be a 300 to 350 people workforce. Following that, we are doing studies on an open pit project that’s right next door. That could increase the employment up to 500 or 1,000 people, depending on how big we make that open pit project. That first phase is in the pipeline. We expect to be operational at the end of December 2019, making commercial production sometime in early 2020.
Perry: There’s a new gold mine that’s going to go into production this year and that’s McEwen Mining’s gold mine out of Eureka. My commission will be out there [this month]. That’s significant, that’s 300 more jobs for central Nevada and another gold mine, which is great.
How does land reclamation play a role in mining?
Lenz: Oftentimes, a very good place to look for a new mine is where old mining took place. And, oftentimes, when a new mine comes into business, the mine plan is designed such that you can do concurrent reclamation, clean up some of the past scarring on the landscape and close some old waste dumps with modern reclamation techniques. That has been utilized at a number of locations within the state of Nevada and will continue to be as mining companies go into old mining districts and re-establish those districts with new techniques and new methods.
Arnold: It’s a very specific calculation that we bond [for reclamation] before we can get our permits. For instance, at our operation, I’ve got a $30 million project out there, which is very small in comparison to a lot of the mines around here. Our current reclamation bond is $12.5 million. That would definitely pay for any type or reclamation we would need to do on our project. As a matter of fact, it would pay for quite a bit more because of the way they calculate it, there’s a lot of extra. It’s assuming worse case scenario. We’re completely bonded. If we were to walk away tomorrow there would be no reason at all that they wouldn’t be able to take that $12 million and completely reclaim that project. And that’s true of every miner in the state.
Bennett: The initial law [on reclamation] was passed in 1989 and the bonding program was put in place in the early 1990s. Mining is, essentially, the only industry that, before it can open it’s doors, it has to explain how the doors are going to be closed. Anybody else can open up a shop but they don’t have to explain how they are going to close when they’re done. To do that, each company posts a bonding with the state. Currently the state holds close to $3 billion. It’s built up quite a bit over the last 30 years. You can’t get your bond released until you’ve met certain standards. That protects the taxpayer and insures that there isn’t, at some point down the line, a project that needs to be paid for by tax dollars.
Perry: [The bonding is] really split between several different entities. The BLM holds some of the bonds and the Nevada Department of Environmental Protection and the Bureau of Mining Regulation and Reclamation, hold some of the bonds. The division of minerals operates a bond pool that is mainly used by exploration entities who want to quickly bond for small exploration surface disturbances.
Corrado De Gasperis: In 2015, we fully restored the Keystone open pit as well as restoring some of the historical structures around it. We won a reclamation award for that. And then last year we realigned the US waterway and removed 300,000 tons of material that was contaminated with mercury that the old miners left behind.. We won first place for that award. I’m selfishly plugging our first place awards but that’s really not the point. We really went above and beyond what was required and we did it because it better positioned the properties for future productive use, some mining and some non-mining. And, it beautified the community of which we’re the largest property owner. It enhanced our property values as well.
Is it a challenge to find workers for this industry?
Bennett: It can be a challenge. We are truly a STEM industry. I do a lot of presentations in classrooms and we have teacher workshops we sponsor every year. I know Rich and [the Nevada Division of Minerals] team also go into classrooms and talk to students about how they have a real future in this industry, especially if they’re interested in environmental science. This is the industry where you have the opportunity to get a really good job. But, we recognize there is a challenge if you say to a kid in Las Vegas they should think about moving to Winnemucca. We have approximately 29,000 jobs in the mining industry across the state and we’re the highest paying industry. Our average salary is $93,000. If you are in mining, you are more likely to have health insurance than in any other industry. And, we support rural communities. There are a lot of indirect jobs that exist because mining is there.
Dyhr: Our biggest challenge right now is workforce development. We’re going to have to hire 300 to 350 people to operate a project. There’s going to be several hundred construction workers. The construction worker market is tight right now. We’re going to have to work pretty hard at [getting people]. We’ve been recruiting our senior management team. We’ve actually had to sweep the whole world. We’re finding there’s a lot of people that want to come back to Nevada. The thing that we’ve been saying is that Nevada is a great place for mining and it’s a great place to live. I’ve worked all over Nevada, I haven’t found any place I didn’t like. We’re trying to attract people to our project near Yerington with the Nevada quality of life and the fact that they’re working in a mining industry. We publish results that show we’re the highest paying industry so we’ve got a lot of interest. Then you have people that want to go to work but, do they have the skill sets that we need? We’ve been working with Job Connect and Western Nevada College. I’m on the advisory council and want to culture a training program with them and they’re very eager to help us. But, we’re gonna have to get a lot of support from Nevada to be able to do that. We’ve gotten feedback from Western Nevada College, and other Nevada agencies, that they’re out there and they’re here to help. We’ll collaborate with them.
How safe is mining today?
Bennett: We have an excellent safety record. From my perspective that has been the biggest change, a focus on a safety culture. There is constant attention to safety. It’s mentioned in meetings, it’s everywhere you look. You can recognize hazards and you can engineer around them, plan around them, but it’s really that human factor that makes the difference. If people are thinking about safety first then you’ve got a better chance of avoiding problems at the other end. We have a safety record we are extremely proud of, but I think it’s because it’s the culture.
Arnold: My first underground [mining experience] was in 1976 and we were killing 250 people a year in this industry. In the last few years it’s been right at 16 or 17, nationwide, in the industry. The reason for that is because the industry itself decided to completely stop it. We’re not a dangerous industry but there are hazards in our jobs. As operators our job is to make sure we recognize what those hazards are so that no one gets hurt. It’s not a dangerous industry. It’s not in the top 10 most dangerous industries in the nation.
De Gasperis: Behavior and culture is everything. I couldn’t agree more with these folks but there is still room for innovation. There’s a tremendous opportunity, with the new technologies that are coming in, to make it even safer. I came from a very safe [work environment] and I was impressed at how caring, how conscientious the people [that work in mining] are. We could compliment that now with more innovation.
Lenz: On the innovation front I’ll just mention one thing that I know has been in place for a number of years now. In haul trucks, one of the companies, at least one, is using fatigue monitoring. In the truck, the driver has a machine that is focused on facial muscles, the eyes and the mouth. [The machine] will alarm the driver if fatigue starts to set in. These are 24/7 operations and 24 hours a day the driver is in a truck for a 12 hour shift. It might be in the middle of the night or it might be in the middle of the afternoon, but if [the driver] starts to feel fatigued and his eyes start to droop or his mouth starts to droop, the seat will alarm and actually buzz the driver to wake him up. It will also send a message to alert the person in the control center that this driver is having a bit of a fatigue issue. If it re-occurs they can stop the truck and take a break. That is one type of innovative technology that is being utilized within the industry to try and make it a safer industry. It’s excellent.
Bennett: This is an industry that has been driven by innovation and the advances in technology. It’s these innovations, often in Nevada, that push the industry forward and then become an export for the state. The technology is exported around the world and utilized in other industries as well. This has been an industry that has been very much driven by and involved with innovation.
