All the jobless people in Eureka County last summer — all 30 of them, to be precise — scarcely would have filled more than a couple of rows of seats in the historic Eureka Opera House near the heart of Nevada’s great mining district.
Tiny pools of available workers are commonplace across rural Nevada these days, and the tight labor markets create headaches for the mining industry as it seeks to capitalize on strong prices for gold, silver and copper as well as growing interest in minerals such as lithium that are needed to fuel an alternative-energy future.
Across Nevada’s mining country, a swath that follows Interstate 80 and Highway 50 from Lovelock to Wells, unemployment rates run about half the statewide average. Even in larger communities the pool of potential workers is small: Fewer than 1,000 in Elko and about 340 in Winnemucca and the surrounding Humboldt County.
“At nearly every level, exploration and mining companies, and the service industries that support them, have serious personnel shortages. Every part of the industry is short of workers in spite of paying some of the highest salaries in the state,” said Jeff Parshley, a mine-closure expert with SRK Consulting in Reno who serves as this year’s president of the American Exploration and Mining Association.
Nevada Gold Mines, by far the dominant force in the gold-mining industry in Nevada, faces arguably the biggest headaches from a tight labor market.
Created in 2019 when Barrick Gold Corp. and Newmont Corp. — the state’s two largest gold producers — consolidated their Nevada operations, Nevada Gold Mines is 61.5 percent owned by Barrick and 38.5 percent owned by Newmont.
The company’s operations across northern Nevada are sweeping. The joint venture employs some 7,000 employees and has 10 underground mines, 12 open-pit mines and 18 processing locations, ranging from ore-roasters to heap-leach facilities. Its mines, which produce about 75 percent of the state’s gold, stretch across 200 miles from Turquoise Ridge, Twin Creek and Lone Tree near Winnemucca to Long Canyon between Wells and West Wendover.
In fact, Barrick officials describe the venture as the largest gold-mining complex in the world.
Recruitment and Retention
At any given moment, Nevada Gold Mines is recruiting for about 300 open positions, and its turnover runs about 12 percent year, said Greg Walker, executive managing director of the joint venture.
Openings range from entry-level equipment operators to engineers and information technology specialists.
The turnover comes despite wages that average roughly $70,000 a year across the mining industry, far above the $38,000 average for all jobs statewide. It’s not unusual, in fact, to seeing mining industry recruiters spreading the word at job fairs in Las Vegas as they seek to widen recruiting pools.
Even so, potential workers don’t al – ways see the opportunities in the mining industry, Walker said, and some candidates don’t want to live in small-town Nevada — Elko, Winnemucca, Battle Mountain. “But this is a global issue, not just a northern Nevada issue,” Walker added.
New employees are less productive than experienced workers, and Walker explained the turnover is preventing Nevada Gold Mines from fully optimizing its operations.
It’s a problem, too, for smaller operators such as Toronto-based Fiore Gold, owner of the Pan Mine 28 miles southeast of Eureka. The company told its investors a few months ago that the contractor that handles the mine work experienced higher-than-normal turn – over despite pay increases. While new workers were getting up to speed, ore production fell about 12 percent below planned levels.
The supply-chain disruptions that followed the COVID-19 pandemic also present a headache for Nevada’s gold miners. It’s harder to find drill rigs to sample attractive prospects, Parshley said. Laboratories that once analyzed samples in two weeks now require 10 weeks.
Truckers who can’t hire drivers are forced to delay shipments, Walker added. Materials costs are going up as rising labor costs ripple through the economy.
Mining for Opportunities
Higher metals prices, however, provide some breathing room. At its recent range of about $1,750 per ounce, gold is off 8 percent from its pandemic-era highs, but still well above the $1,300 range that was common a couple of years ago.
Higher metal prices, in turn, create some operational opportunities for mining companies.
John Muntean, director of the Ralph Roberts Center for Research in Economic Geology at the Mackay School of Earth Science and Engineering at the University of Nevada, Reno, explained that higher prices allow miners to process lower-grade ores that wouldn’t be profitable when prices were lower.
Lower-grade oxide ores are usually processed in heap-leach facilities in which ores are stacked and leached with cyanide to free gold from the surrounding rock. Typically, Muntean said, that process recovers 60 to 75 percent of the gold in the ores compared with 90 percent recoveries from the milling operations used for higher-grade ores.
“The holy grail is to develop a process to increase the gold recovery from low grade ores,” Muntean explained.
Gold producers don’t have any control over the prices they receive for their production. Thus, cost control is essentially the only path to improve profitability.
When Barrick and Newmont combined their Nevada operations, the consolidation led to immediate savings, Walker said.
In one instance, heavily-laden trucks hauling ore from a Barrick mine to a Barrick processing plant used to drive right past a Newmont plant. Now they have access to Newmont’s facility.
Suppliers who previously dealt with both Barrick and Newmont now had a single client — a client who expected the best of the two previously separate prices.
Two large regional staffs in Elko were consolidated into one. And perhaps most important, Walker said every employee now has a focus on cost savings and efficiencies.
More subtly, but equally significant, lower production costs — just like higher prices — mean that Nevada Gold Mines can now profitably mine ores that previously would have been left in the ground. This allows Barrick and Newmont to increase the mineral reserves they carry as assets on their balance sheets. “We’ve added significant value,” Walker said.
Creative Cost Savings
More big cost savings are just over the horizon.
Mining companies use so much electricity, for instance, that Newmont in 2008 built the 215-megawatt coal-fired TS Power Plant about 60 miles west of Elko to meet much of its own power needs. Now, Nevada Gold Mines is converting the plant from coal to natural gas and the company is adding 200 megawatts of solar farms to the facility.
The upfront expenditure is hefty, but Walker said the long-term benefits will be equally large.
“That will be a significant cost savings for us,” he said. “Energy is one of our largest cost inputs.”
It’s also an important step toward the company’s target of a 20 percent reduction in greenhouse-gas emissions by 2025 and its vision of zero-net greenhouse gas emissions by 2050.
Cost-saving technological innovations are becoming widespread throughout the mining industry. Electric trucks, for instance, have been undergoing serious testing at Nevada Gold Mine’s underground facilities at the Turquoise Mine. Exhaustfree, low-heat electric vehicles reduce the demand on mine ventilation systems, further cutting energy consumption, Walker explained.
Nevada Gold Mines is also testing automated surface-drilling rigs that allow a single operator sitting in an office to control up to three rigs simultaneously. Semiautonomous loaders are also getting a closer look.
For professional staffs, artificial intelligence directs processing plants as they squeeze every possible bit of gold from ore. Massive amounts of data from mining and processing operations are boiled down so managers can spot trends and make informed decisions.
Staking a Claim
But boots on the ground remains an important part of prospecting and exploration, the fundamental research and development work that ensures the mining industry’s future in Nevada.
Claims staked by exploration companies and individual prospectors across Nevada totaled 229,350 at the end of July, said Michael Visher, administrator of the Nevada Division of Minerals. The number of active claims on federal land in Nevada has hovered around the 200,000 mark for about 10 years, but rising gold prices encouraged an uptick in exploration in recent months. Exploration outfits pay $165 a year to the Bureau of Land Management for each 20-acre claim, along with a payment of $12 per claim to the county where the claim is located.
In 2018, the most recent figures available, about $461 million was invested in minerals exploration work in Nevada.
A lot of that investment won’t bring any returns. Typically, Visher explained, some 200,000 claims will lead to only one new major mine along with four or five minor mines or expansion projects at existing mines.
Still, years of patient work are bringing some big projects closer to reality. Nevada Gold Mines believes two neighboring projects about 75 miles southwest of Elko, the expansion of its Goldrush Mine and development of the new Fourmile Mine, are likely to become major contributors to its gold production. The Fourmile project, currently 100 percent owned by Barrick, may be folded into Nevada Gold Mines as it’s developed.
Fiore Gold, meanwhile, has been spending about $1.5 million a year on exploration to extend the life of the Pan Mine, and the company estimates the mine still has resources equal to 99 percent of those available when Fiore Gold purchased the property in 2017.
At the same time, Fiore is working to develop its Gold Rock property, a new mine eight miles southeast of the Pan Mine, which it hopes to bring into production in 2024.
While gold draws much of the attention across Nevada, exploration for other minerals also is on the rise, said Parshley. The price of copper, which is found from Yerington to Ely, has risen about 50 percent in the last year, spurring exploration activity.
Some of that results from the Biden administration’s emphasis on clean energy. Electric vehicles, Parshley noted, require four times more copper than gas-powered vehicles. Their batteries also require lithium, another mineral mined in Nevada.
Attractive Investments
Rising prices, naturally enough, ease the task of exploration-focused companies that need to raise investor capital. Funding for projects in Nevada gets an additional boost, Parshley said, because of the rise of socially-responsible investing. Mines in Nevada operate under some of the best environmental standards in the world, the rights of workers and nearby communities are more highly respected than elsewhere in the world and environmental impacts of hauling minerals long distances to North American manufacturers are reduced. “
All this means that Nevada minerals projects are attractive investments,” Parshley said.
That’s borne out by in the much-watched Investment Attractiveness Index developed by Fraser Institute, a think tank headquartered in Vancouver, British Columbia. It ranks Nevada first globally as an attractive location for mining investment.
The 2,200 mining executives surveyed annually by Fraser Institute rank mining territories not only by their geologic and economic considerations, but also on the basis of their regulatory, legal and tax environments.
“Nevada continues to be a premier mining jurisdiction,” one unnamed survey respondent, the president of a major mining company, told Fraser Institute researchers.
Even so, Parshley said exploration companies worry the Biden Administration and Congress might overhaul federal rules and impose more environmental regulation that would stifle mining investment in the state.
That’s encouraging industry groups to undertake campaigns to spotlight the importance of mining — noting, for instance, that Nevada’s gold production accounts for about 75 percent of U.S. production and 5 percent of all the gold produced globally.
“There are a lot of myths and inaccuracies floating around that, frankly, pose a significant risk to the industry,” said Tyre Gray, president of the Nevada Mining Association. “The lack of understanding leads to misconceptions about how we interact with the environment and the communities that surround us. This can result in bad laws being passed and bad policies being instituted.”
The association’s outreach efforts range from visits to working mines for elected officials and community leaders to sponsorship of workshops for K-12 teachers.
An important part of the mining’s message is the mining industry is important in the state’s urban areas, too.
“Mining is not immediately associated with Las Vegas because the bulk of Nevada’s mines are located hundreds of miles away from the Strip. In fact, some of our largest vendors, contractors, consultants and business partners are headquartered in Las Vegas and Henderson,” Gray said.
The Reno area, meanwhile, is home to mining corporate offices as well as law firms and consultants that specialize in the industry and laboratories that analyze thousands of mineral samples.
“Even if a Las Vegas resident doesn’t have a direct connection to mining, a strong and vibrant industry still benefits them,” Gray explained. “It means more revenue for the state and our schools, great career opportunities and self-sufficient rural communities that are not reliant on southern Nevada tax dollars.”
Although the industry is doing well today, the dependence of the northeastern Nevada economy on the boom-and-bust mining industry remains a worry, and the Northeastern Nevada Regional Development Authority last year gathered leaders from across the region to talk about economic diversification.
The resulting 165-page plan focuses on diversification targets that include outdoors-oriented tourism, agricultural processing (including marijuana products) and logistics companies that could take advantage of the region’s good highway and rail connections.
But the plan noted that many residents have misgivings about diversification that might overturn their way of life. It also pointed out that a lack of robust broadband in the Elko area has caused some companies to move elsewhere.
In response, Nevada Gold Mines is putting up $30 million to bring fiber-based broadband to Elko, Spring Creek and Lamoille. Anthem Broadband, the mining company’s partner on the initiative, will contribute another $6 million.
That’s part of what the mining industry calls a “social license to operate” — the relationships it builds with local governments and tribal leaders. When the pandemic struck, for instance, mining companies in northern Nevada created the I-80 Fund that provided loans to keep small business afloat. Nearly 30 small businesses received about $3 million in loan funds, and the program is now expanding to support new and expanding small companies.
