Middle Row: Lori Haney, City National Bank • Amanda Hilton, KGHM Robinson Nevada Mining Company • Michael Lefenfeld, Cyanco • Randy Miller, Broadbent & Associates Inc.
Bottom Row: Sheldon Mudd, Northeastern Nevada Regional Development Authority • Greg Walker, Nevada Gold Mines (Barrick Gold) • Matt Weaver, Ioneer
Most Nevadans might be surprised to learn that mining still accounts for a significant portion of the state’s economy. In that regard, Nevada miners have been working to educate the state-at-large regarding their industry and the advancements therein. Executives from mining organizations throughout the state recently met in a virtual roundtable, sponsored by City National Bank, to discuss their industry and shed some light on what mining looks like today.
Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. These monthly roundtables bring together leaders from different industries to discuss relevant issues and solutions.
How has COVID Impacted your Industry?
Greg Walker: The biggest impact now is COVID fatigue. We’ve been doing this for nearly two years, and a lot of people are just about over it. We’re very disciplined in the mining industry so implementing the procedures and the PPE (personal protection equipment) was relatively straightforward. [We did have] to increase manning and costs because we had to buy more equipment for transport. Directly, the [pandemic] was not as impactful as it was in other industries. The big impact we’ve seen is the Great Resignation and people changing their career paths. We’ve gone from having 200 to 300 vacancies at any given time, to over 600 vacancies. We simply can’t get people.
Michael Lefenfeld: The lingering COVID impact we also see is [the inability] to get things to our plants. Truck drivers and rail terminals are short staffed. We’re not seeing switches happening on time. We’re not seeing inventory being removed from the terminals. There’s a more expansive impact from COVID, impacting the entire supply chain, moving rock, gold, silver and chemicals throughout.
Naomi Duerr: Although [COVID has] been incredibly challenging, there have also been some bright spots. One of those bright spots has been the ability to communicate [more widely]. In the exploration world, 95 percent of our clients are international, and with the restrictions of travel, that has been an impact. On the positive side, for decades we’ve been communicating with these clients via phone and now we have other tools like GoogleMeet and Zoom. People have an expectation that’s how we’re going to talk, and we are talking more frequently to our clients in that format.
Amanda Hilton: We were deemed an essential industry and were able to prove, quite quickly, that we could keep our workplaces safe. We put all of the discipline and controls in place. We were able to keep our miners working, all of the support services for our mines in operation and keep those funds flowing through our communities. The rural communities did not suffer as much as the urban communities. If you look at the unemployment rates during the middle of 2020, rural counties’ rates were much lower than they were in other parts of the state. I believe that’s because of the discipline and focus the mining industry put on ensuring we had safe operations.
How can you Address Staff Recruitment and Diversity Obstacles?
Tyre Gray: The association has a program called Mining Vegas for Talent. That [program] is meant to go into communities like North Las Vegas, the east side and west side, and look for younger adults, sometimes students, who are looking for career opportunities and provide them with mining as one of those opportunities. Just by recruiting in Las Vegas our pool of candidates is already more diverse. Being strategic about reaching out to particular communities and saying, “We have jobs here, are you interested?” is how we’re going to be able to shore up our workforce and, at the same time, have diversity be a concentrated point.
Randy Miller: I see a lot of people leaving the industry, younger and older folks. We’re losing institutional knowledge and new blood coming into the industry. We have to get even further down into the education levels, even earlier than college, to get people really excited about mining. Those are the years I got excited about mining, and it really drove me to love this industry more than any other. It’s an incredible group of people to work with. We need to inspire that among our young people and [help them] understand what that opportunity looks like.
Duerr: : We need smart people and we need them to start young. As more people are fleeing urban areas, they might be interested in working in rural areas. That’s going to be largely dependent on broadband. I’m president of the Western Nevada Development District, which is focused on infrastructure for jobs, the preeminent amongst that is broadband. We’re doing a huge broadband mapping project for all the northwest counties. We need people, but we also, obviously, need the stuff to support them.
Hilton: We have to make sure that [broadband] infrastructure is in place. How can we convince people what a great industry it is so they’d be willing to make a move anywhere, whether that be a city or urban rural lifestyle? [We need to] make sure they understand the positives and benefits of working for this industry.
What Roles do Automation and Innovation Play?
Matt Weaver: There’s not quite as many people that are actually at the mine site. They could be running the dozer from Reno or Las Vegas or someplace else. Automation plays a part in that. Certainly, over the past nearly two years with COVID, there’s been a lot of work done, but it’s very different work than how we would have run a project [before]. We may not like [working virtually], but we’ve all gotten better at it. And it gives us some ability to restructure jobs and positions to, hopefully, make it easier to attract good candidates into those.
Corrado De Gasperis: The demand is for more automation and for advanced technologies like quantum sensing. As an industry, we have to be of a mindset that these things, which sound like fantasy, are going to be prerequisite for our ability to sustain, compete and thrive in the future. The notion of quantum computing has been made real by companies like Google and IBM and others. Quantum computing introduces the notion of being able to do two things: run a trillion scenarios in seconds, as well as using techniques to sense and identify minerals. Google was able to sense an atom in a human heart, meaning [the technology could] see it. If you can sense an atom in a human heart, you can sense a gold atom in the ground. If that technology advances, imagine scanning your district to a thousand feet and knowing, at the atomic level, the minerals that are in there. We’re moving into the future and there’s so many innovations we need to embrace to ensure sustainability.
What are your Thoughts on the Recent Tax Changes for Mining?
Gray: What we have in AB 495, the tax that was passed in the last session, is a wonderful compromise that will provide stability for the industry. What that means for education is huge. Mining will be the base level funding for education in the state of Nevada to the tune of about $300 million per biennium. That is significant because it changes the per pupil funding spending in Nevada by about 7 percent. To give you a hard number, basically, every student in the state of Nevada is receiving an additional $640 in per pupil spending. Right now, our per pupil spending is way below national norms, somewhere around $9,400 per student. We’re going to be able to bring that close to about $10,000 per student. [No one is] happy about an additional tax increase, but we’re happy about where our tax dollars are actually going. When tax dollars are flowing into a goal that we believe has merit, like education, all of us can get behind that. From a business perspective, one of the things we all have to do is come together and take a holistic look at our tax structure in the state. That requires some leadership from the executive branch all the way down to private industry. Until we have a holistic conversation, we’ll see this kind of one-off, tax this person, tax that person [approach].
Walker: When we set up NGM (Nevada Gold Mines) back in 2019, we recognized the industry had the capacity to pay more. I wasn’t surprised we were getting so much pressure from different quarters. [The tax structure in Nevada] needs to be a bit broader than industry based. I’ve had this discussion with the governor and [state officials] at different times. They need to step up and review tax regime in Nevada. This random system that’s in place now needs to change. The other thing that worries me is, the federal government is now having a go at us as well. We’ve got state taxes hitting us and now we’re going to get federal tax. The whole tax structure is putting pressure on the industry.
De Gasperis: We were targeted [by the legislature] in an exasperating way. I credit the Nevada Mining Association because we came out with a much better answer than what was proposed. What if scarce metals keep moving up [in price]? If we’re paying percentages, that means we’re paying a lot more as we’re more profitable. It’s going to be a knee jerk reaction to come after the industry every time. There needs to be thoughtfulness because when you start proposing gross taxes, you destroy projects. You’re not taxing profitability, you’re killing projects. I wonder if that’s poorly understood, or if that’s the motive. Investors want certainty and if there’s constant discussions about changing the structure and taxes, even if it doesn’t pass, [it] impairs us in some manner.
Duerr: On the exploring side, it doesn’t just drive away the capital. If there’s no room for an explorer to get their little piece of the pie, they’re not going to explore in Nevada. What I’ve done a lot is try to build up trust with legislators and explain that you can’t keep taxing this golden goose, you’ll tax it to death. Even the implication there might be [new] taxes makes the people finding the new gold, silver, copper and lithium not want to work in Nevada. So, we start looking into other states, we’re not finding new stuff [in Nevada] because we feel like there won’t be room for us and the industry to be successful.
Miller: We’ve worked hard to try to educate the legislators on what this could do to mining in Nevada, and that’s drive it out of this great state. Not only the state, but it will get driven out of the country. Mining companies aren’t going to go away, they’re going to go elsewhere. It’s completely counterintuitive to where we need to go.
How does Nevada’s Regulatory Environment Compare to Others?
Miller: Nevada has the best environmental regulations, [they are] world class. The environmental protection and initiatives, when we talk about sustainability and climate issues, those are not nearly as effective if we don’t keep [the mining industry] here in Nevada.
De Gasperis: From a Nevada regulatory perspective, it’s extraordinarily robust and brings us certainty. I also find regulators are empathetic and supportive of permitting mining operations. Having said both of those things, they could use more resources to accelerate the permitting processes with little additional operating expenses. [For] example, we just launched the lithium-ion battery recycling business producing lithium, nickel and cobalt. The RCRA (Resource Conservation and Recovery Act) based rules are very unsophisticated. Lithium-ion battery recycling is not new. The regulators are leading in terms of making the changes necessary but way behind where they could be if they had more resources. They’re willing, but they need more to help the industry and the innovations happening.
Lefenfeld: With Nevada’s elaborate mining capacities in multiple jurisdictions, the supply chain and infrastructure enablement are paramount as we remove emissions and make things more sustainable. There’s something that needs to be said around the infrastructure development between the diverse economies that are being built around lithium and gold and silver and all the other metals that are being produced in the Nevada environment.
Duerr: In the West, Nevada has been very good, and we have focused on six of the 15 western states. I will say, for example, we don’t work in Colorado, we don’t explore there. We don’t explore in California because of the lack of empathy or interest in those states in having us work there. Although we are moving out [of state], it’s not because of environmental regulations, it’s because of opportunity, interest and capital driving us to look in some of the other countries.
Gray: Nevada has the world’s leading environmental regulations. People come from all over to hear and learn about our regulations. So, we’re already doing that right. And, because of what we’re doing Nevadans get nearly 100 different air, water and soil quality samples so that we know that our air quality and water is in good shape. Mining companies are regulating and pulling that data on a daily basis. We have to stick to our plan, which is making sure that we inform people of what we’re doing and get them comfortable with it.
What Concerns do you have in this Industry?
Weaver: One of my concerns is that people don’t understand science well. We’re not actually making decisions based on good science. A lot of the decisions are going across several different scientific disciplines and sorting through all of that to get the best answer. There’s not an easy nor direct process to [get those answers], even with the regulators in hand. [Simply] because [companies] have a botanist doesn’t mean they understand soil characteristics or other things.
Walker: The one environmental issue we’re all facing is water. This week we’re looking at the conjunctive use changes that the state engineer is going to bring in. We’re all very cognizant of it. We all recycle as much as we can. But, in a state, that’s very dry, that’s going to be an issue for us going forward. It’s going to get worse than it has been.
What would you like More People to know About Mining?
Sheldon Mudd: Mining is the economic engine that powers the economy in the northeast. We certainly try to help where we can to ensure [mining companies] can operate effectively and efficiently in the region. Regardless of what they need, we do what we can to try to help out.
Hilton: We’re part of the solution of this changing economy, and specifically speaking to the green energy economy. You look at solar panels, they require copper and silver, their batteries require lithium. Those are all produced in Nevada. You look at cell phones, they require gold, silver, copper and lithium. We need to do a better job of talking about the great things we’re doing in our communities and what we’re doing for our employees. [We need to] get away from that old “pick and shovel” model and talk about how we are a high-tech industry whose primary focus is safety.
Weaver: [A request] we’ve seen come up very recently from our customers, in the last four months, is environmental social governance. [That means] having a formal program in place and putting guarantees with our product that they’re meeting program [standards] and that its audited. This has been on the horizon, certainly from the battery and automobile suppliers. They’re very much pushing it and that’s something new we’re getting into very quickly.
Miller: One of the things I really fell in love with in this industry is its family-related atmosphere. We all treat each other like family. We look out for each other, we share and we openly discuss things that other industries don’t; it’s really special. Mining companies have very bold plans about where they want to go to meet the demands for the resources needed. That itself could really resonate with young folks because it’s exciting to get involved in. This industry can accept as many people as we can throw at it.
