Nevada: The new golden state

Alison Calkins

Monday, Sept. 30, 1996 | 11:59 a.m.

Jean Sozio calls himself a tramp-miner.

He's spent 38 years working in mines all over the world.

Now general supervisor of shafts at Barrick Gold Co.'s Meikle Mine near Elko, he says mining today is "a picnic."

"My first job underground was digging a ditch. They gave me a shovel and I went at it. The attitude was if you don't like it, you can quit and go somewhere else. Today things are a lot different. Better working conditions, better money and better benefits. And there's plenty of work here."

Rather than a picnic, the Nevada mining industry is calling it a "second renaissance."

Mining is currently the state's second largest industry, boasting $3.2 billion worth of mineral production in 1995.

According to statistics from the Nevada Mining Association, the state produces about 64 percent of the gold in the country and 9 percent of the world's.

It also ranks as the fourth largest gold producer in the world behind South Africa, Australia, and the Commonwealth of Independent States, the former Soviet Union.

With known and inferred gold reserves of 132 million ounces -- which is more than 60 percent of the known U.S. reserves -- the renaissance should continue well into the next century.

NMA President Mike Doyle said the industry's economic impact tells the story.

"We're very proud of our 1995 economic impact numbers. They indicate that mining is truly a benefit to the state coffers and show that the industry is looking forward to a long stay in Nevada," he said.

Mining was ushered into Nevada with the discovery of the Comstock Lode near Virginia City in the 1860s.

From 1860 to 1890, miners dug into the territory's gold and silver reserves -- those rich silver deposits hastening Nevada's admittance to the union in 1864 to help finance the Civil War.

Thus the nickname "the Silver State."

But as quickly as the mining industry grew, the rich ore veins were depleted and the mines dried up. By the turn of the century, there was little mining in Nevada.

Nevada mining's "first renaissance" happened during the early 1900s when new sources of ore were found. Tonopah and Goldfield sprang up as gold and silver towns. Copper mining produced Ely.

The boomtowns thrived for several decades, but by the time the Great Depression hit, the ore was again depleted and mining again gone from Nevada.

But these days, just because you can't see the gold doesn't mean you can't mine it.

The second renaissance was sparked by the technological advances of the 1980s that allow large-scale operations to mine microscopic minerals -- including $2.6 billion worth of gold in 1995.

"We call it invisible mining," Doyle said, referring to the complex chemical and scientific procedures now used to find and extract unseen gold from ore that used to be considered waste.

And the gold reserves continue to increase as technology does.

It happens inside Newmont Gold Co.'s unique robotic laboratory where mechanized alchemists have been discovering invisible gold for seven years.

The state-of-the-art computerized lab is home to dozens of machines that seemingly have a life of their own, perpetually lifting, pouring, analyzing and reporting the results of minute ore samples.

It never stops.

Twenty-four hours a day, seven days a week, thousands of crushed ore samples arrive in small cloth bags. They're sorted and tagged by human hands and then they're off to the robots which are carefully monitored by four or five skilled technicians per shift.

"This laboratory is the first of its kind," said communications manager Mary Korpi. "In the old days, things could never have been done this way and at this level. Things are changing fast in the mining industry."

Those changes mean growth.

In 1995, the Nevada mining industry employed 13,190 people with salaries averaging $47,540 a year for precious metals mining and $35,800 a year to mine other materials. The state's average salary is $26,626.

Pit and underground mining is done in Nevada, but the total land impacted by mines in the state totals 0.1 percent -- less than the size of Sparks, according to the NMA.

That includes about 38 major operational precious metals mines and about 24 industrial sites where prospectors seek minerals such as gypsum, silica, limestone and diatomite.

There also are mining operations in Battle Mountain and Elko awaiting permits.

There also are more than 55 producing oil wells and 14 operating geothermal electrical generating plants.

Doyle said the industry has spent the last 15 years developing a large, efficient and economically viable capital base that's sustainable for at least 20 years.

"During that time, we've (the mining industry) spent over $10 billion for exploration and other investments. We spent $1 billion in 1995 alone," said Doyle.

Almost one-third of that was to revive copper operations near Ely.

The rest was spent developing new mines and expanding existing operations in the rich gold deposits along the Carlin and Battle Mountain trends.

The industry's growth is reflected in the 25 percent increase in state and local taxes paid from 1994 to 1995 -- from $113.3 million to $141.2 million.

That's nearly a 50 percent increase in taxes paid over 1993.

While total taxes paid by the industry increased in 1995, net proceeds taxes decreased from about $48 million in 1994 to about $33 million in 1995.

Mining companies are allowed to deduct certain costs incurred at the mine site such as mining and milling expenses from their gross expenses. They pay 5 percent of that to the county and the state general fund.

Those decreases were offset by a 78 percent increase in sales and use taxes paid by the industry in 1995. The sales and use taxes went from about $42 million in 1994 to $74 million in 1995, according to NMA statistics.

The future holds some regulatory and technical challenges for the Nevada mining industry, according to John Dobra, professor of economics at the University of Nevada, Reno, Mackay School of Mines.

"A lot of the ore now being accessed is more difficult to process and requires the development of new technology, such as the bioleach process which makes it possible to process at a very low cost. And Nevada has untold millions of tons of low-grade sulfide ore, the old waste rock, laying around," he said.

Consequently, regulations will be dealing with more environmental issues such as reclamation and environmental protection.

But that's all part of the process.

"The capital investments made over the last decade will allow the industry and, in particular, it's gold industry to sustain its large, efficient, and economically viable position as one of the leading producers of the world," he said.