Where I Stand — Russ Fields: Mining’s solid groundwork offers bright future in Silver State

Friday, Aug. 14, 1998 | 11:22 a.m.

WHILE THE WORLD'S mining industry is now in a very challenging price environment, Nevada's mining companies are working hard to reduce their costs so that even with the low price of gold, mines in the state can continue to make a positive impact on Nevada's economy.

While Nevada's mining industry generated sales of $3.2 billion in 1997, with gold mining responsible for 85 percent of that, overall return on investment was the lowest it has been in several years.

Nevertheless, operating results in the Nevada gold industry continue to be impressive. In fact, if Nevada were a sovereign country, it would be the world's third largest gold producer behind South Africa and Australia. As part of the United States, it helps to make this country the world's No. 2 gold producer.

Currently the price of gold is low -- about $295 per ounce compared to $385 an ounce in 1995, which in real terms is about equivalent to the price of gold in the early 1970s. The mining industry also has no ability to set the price of gold. That is dictated by the world market. So all we can do is work hard to control our costs.

In Nevada the mining industry is improving efficiency, using improved technology and revising plans in order to mine a higher grade of ore. All of this effort is aimed at reducing the cost of production.

Nevada, which has some of the lowest costs of mining in the world, is involved in many other types of mining. In addition to being the top silver-producing state in the nation, Nevada in the last couple of years has again become a significant copper producer with BHP Copper in Ely.

And we are producing industrial minerals such as gypsum, limestone, barite, specialty clays, sand, gravel and crushed rock. Nevada mines world-class opals, some of which are on display at the Smithsonian Institution in Washington, D.C. The industry also produces oil and geothermal energy.

We mine diatomite, which is used in filters, absorbents and kitty litter, and magnesite, which is used as an additive to cattle feed and as a flux for steel making.

In short, Nevada produces a wide variety of minerals because its complex geology is conducive to these types of mineral deposits.

And the industry here employs 14,000 people to mine those minerals. Although that is a relatively small percentage of the state's work force, in rural communities such as Elko, Ely, Battle Mountain and Eureka, mining is by far the chief economic activity.

Miners are the best-paid segment of Nevada's work force. The average mining job pays $50,000 a year. And while it is still hard work, it is a highly sophisticated industry with enormous and expensive equipment.

Today a single miner can haul more than 200 tons of rock in a single load. A hundred years ago one trip would produce only what a miner could carry out in one wheelbarrow.

Today's miner is highly skilled and trained. Some of those jobs include degreed professionals such as mining engineers, metallurgical engineers, biologists and environmental specialists who restore the landscape for such future uses as ranching, recreation and wildlife habitat.

And, speaking of the environment, Nevada regulatory agencies have an outstanding record of regulating mines for environmental impact. Nevada has developed mines over the last 10 years to protect land, air and water.

The government, mining industry and environmental community have worked together to create a good regulatory climate, protective of the environment while allowing production to take place.

Still, about 86 percent of Nevada's land is owned by the federal government. Federal regulations of mining are constantly being changed, by Washington, D.C.-based regulators. Uncertainty over these changes has led to reduced spending on public land, especially in the area of mineral exploration.

To understand the future of mining in Nevada, one needs to look at its past and, for that matter, the history of the state.

Prospectors were among the first settlers in the state. Many came here for the Comstock Lode between 1859 and 1880. Over the years, there have been periods of major mineral production of gold and copper. Mining's impact has always been important to Nevada's economy, and that situation continues today.

I am optimistic about the future, especially for gold mining. This industry has invested more that $10 billion in Nevada over the past 12 years, and Nevada's gold, silver and other mineral resources are large. Also, we have the support services and infrastructure in place to carry out the work.

Nevada has created for itself, through its Legislature, governor's office and congressional delegation, a reasonable business environment in which to conduct the business of mining.

This, together with the presence of outstanding ore deposits, makes it certain that, even in this low-price environment, there will continue to be mining here. Further, as long as there are gold mines operating anywhere in the world, Nevada will continue to be among the leaders in efficient, safe, responsible production.