Facebook
Fark
Digg
Reddit
Stumble
Sunday, March 17, 2013 | 2 a.m.
Another view?
View more of the Las Vegas Sun's opinion section:
• Editorials - the Sun's viewpoint.
• Columnists - local and syndicated writers.
• Letters to the editor - readers' views.
Have your own opinion? Write a letter to the editor.
Mining always has been committed to fostering a healthy Nevada economy and supporting the state in which we operate. We have grown as an industry and now contribute more than $417 million in state and local taxes to support essential services such as education and safety. We provide thousands of the state’s highest-paying jobs and invest billions to develop new projects.
In 2011, mining’s share of the taxes paid by all Nevada businesses was $171.4 million. In addition, we paid a $245.8 million mining tax (Net Proceeds of Minerals Tax) — a tax no other Nevada business is required to pay.
While most sectors of the economy have seen decreases in tax contributions, ours have more than doubled in the past three years. Furthermore, our per-employee tax contributions of $24,000 are four times the state average of $6,000. Mining is Nevada’s eighth-largest industry but supports a portion of the general fund that is twice our economic footprint.
Mining’s growth in recent years is a perfect example of how an industry can thrive and support Nevada even during tough economic times. Since the recession ended in June 2009, mining has added 1 out of every 3 jobs in the state.
Because modern mining is a highly technical process, we must employ a well-educated workforce to operate advanced technology on the mine site. As a result, mining pays the highest average salaries in the state at more than $87,000, including full benefits.
In addition, the industry now supports more than 2,300 Nevada-based businesses through our constantly growing supply chain.
Our continued growth requires long-term investment in developing new technologies to extend the life of our mines and to explore for new mineral resources. In 2011, mining’s in-state investment to discover new ore bodies and develop new projects totaled more than $1.6 billion.
This investment creates jobs, provides economic development to communities and generates sales taxes and induced spending throughout the supply chain. For example, $3 billion will be spent developing the Long Canyon project from when exploration began in 2005 by New West Gold to when Newmont Mining will extract the first ounce in 2017.
When it is fully operational, that project anticipates employing several hundred Nevadans.
Mining has always been there to work with both the governor and Legislature to craft sound policies for our state. We were there in 2011 when mining’s taxes increased by $48 million. We were there in 2010 when we helped balance the budget. We were there in 2009 when we agreed to prepay our taxes at the beginning of each fiscal year to assist with cash flow. We were there in 1989 when the rates were raised on the Net Proceeds of Minerals Tax, and we’ll be here again in 2013 to help devise solutions to address fiscal issues in a manner that does not inhibit the future prosperity of the state.
Tim Crowley is president of the Nevada Mining Association.
A pretty bad PR piece. The fact remains that the royalties the mining industries pays are a joke. Look at what the royalties the mining companies pay to various regions of Australia. The mining companies which are largely owned by foreign interests can easily afford to pay more..a lot more.
MINING has enjoyed "favored status" for over a century, since writing the MINING laws into the Nevada State Constitution. NONrenewable minerals have been extracted from Nevada and taken out of the state, even out of the country, for a pittance, where mining pays other states far more for what it takes. Nevada's infrastructure has long been suffering,with the mining barons living the high life out of state, and having their legions of lobbyists influence any and every person who deals with mining in any way, shape, or form.
Commenter NVFisherman expressed his take on mining with, "A pretty bad PR piece. The fact remains that the royalties the mining industries pays are a joke. Look at what the royalties the mining companies pay to various regions of Australia. The mining companies which are largely owned by foreign interests can easily afford to pay more..a lot more."
Many of those working in the mining industry are outsiders, and they are making the nice compensation figures. Where the mining stops, they pull up stakes and move back to their "real homes" in other states or countries. Sure, you have a few locals driving haulers, delivering fuel and goods at lower wages, then their jobs disappear when mining stops. Then what? It is a boom and bust industry, and it pays a pittance back to the State of Nevada and its People in return for the wealth it exploits.
As the previous Governor Bob Miller long ago stated, "Mining does not pay its fair share," way back in 1989. It never has, anyway you cut it.
So quit the lies and propaganda, mining. The People of Nevada have heard enough.
Blessings and Peace,
Star
It's interesting that Mr Crowley should use 2011 in talking about gold taxes. That was the year gold reached an all-time high price - in September it was $1921/oz. Today it is $1592, an 18% drop in a year and a half. Yes, mining creates job, but hardly even semi-permanent ones, mining is notorious for its boom/bust cycles - sometimes with just 2-3 years between a peak and a bottom. Nevada must set its taxes at a point that will not only cover current expenses during a boom, but also cover future expenses for cleaning up after the boom moves on. It's almost impossible to find a house in Elko, today. Who will pay to remove all the new construction once Newmont, Barrick, and the others move on? Those of us who are actually permanent residents? Just as we're now paying to clean up a century of mining's abuses?
The region has 59.0 million ounces of proven and probable gold reserves, representing 42% of the company's total reserves.
In 2012, gold production is expected to be in the range of 3.425-3.55 million ounces at total cash costs of $475-$525 per ounce. Pueblo Viejo is expected to contribute about 80,000 ounces of gold to Barrick in 20123 and is anticipated to contribute an average of 625,000-675,000 ounces to Barrick annually over the first full five years of operation at total cash costs of $300-$350 per ounce.
Beyond 2012, we have identified various opportunities to add production within North America, including the recent Goldrush discovery in Nevada.
This is the link to the Barrick Mining document on mining in North America.
http://www.barrick.com/operations/north-...............
Barrick paid about $104,000,000 to Nevada last year. They prepaid taxes for one year during the worst of the budget crunch.
This may help you understand some of the recent history of taxes paid by mining to Nevada.
Coincidentally, Barrick Gold of North America issued a news release Thursday announcing it had paid record state taxes on its Nevada operations, prepaying $101 million in net proceeds of minerals taxes to the state on March 1, based on estimated 2011 operating results.
However, Nevada Department of Taxation projected figures published by the Las Vegas Review Journal reveal Barrick's Nevada operations are expected to earn gross revenue of $3.72 billion this year with allowable deductions of $1.73 billion, resulting in net proceeds of nearly $2 billion. Net tax after credits is projected to be $101.9 million this year.
Nevada's second largest net proceeds of mines taxpayer, Newmont, is projected by Nevada taxation officials to pay $33.7 million in net proceeds taxes this year as Newmont's Nevada operations are expected to earn a gross revenue of $2.21 billion with allowable deductions of $1.59 billion, resulting in net proceeds of $620 million.
In total, the Nevada Department of Taxation projected that mining companies would claim $4.2 billion in tax deductions in 2011 as many global mining companies proclaimed record earnings last year, thanks to record metals prices."
This is an interesting article. The Barrick mines in Nevada produced over $8,760,000,000 and paid $104,000,000 to the state of Nevada. The contract with the Domincian Republic has Barrick Mining paying 3.2% of the gross production, 25% income tax and 8.75% of net earnings or an estimated total of $11,000,000,000. What's wrong with that picture?
http://www.newsreview.com/reno/back-to-t............
The 2011 Barrick Mining annual report is out. If you read it, there are some very interesting facts that emerge. This is a link to the Barrick Annual Report for 2011.
http://www.barrick.com/files/doc_downloa...............
Barrick Mining either owns outright, or is a partner in a joint venture in 7 gold mines in Nevada. To determine my estimate a profits for 2011, I assumed the price of gold at $1500 per ounce, or less. The current price for gold is in excess of $1750 per ounce. The first four mines listed are totally owned by Barrick Mining. In 2011, according to their own figures, Barrick Mining produced almost 97 TONS of gold from their Nevada Mines. That is same weight as 16 full size, original HUMMERS. Barrick Mining has reported record profits and dividends in both 2010 and 2011.
The Cortez Hills Mine produced 1.42 Million (44.375 tons) ounces of Gold at a cost of $245 per ounce. If you assume a conservative profit of $1000 per ounce, you get a profit for the Cortez Hill mine of $1,420,000,000. Barrick paid a total of $47,300,000 in local and state taxes last year.
Bald Mountain Mine produced 93,000 ounces (2.9 tons) at a cost of $558 per ounce. Assuming a profit of $900 per ounce for the Bald Mountain Mine, you get a profit of $83,700,000.
The Gold Strike mine produced 1.09 MILLION ounces (34.0625 Tons) at a cost of $511 per ounce. Again assuming a profit of $900 per ounce for the Gold Strike mine, you get a profit of $981,000,000.
Ruby Hill mine produced 127,000 ounces (3.96875 tons) at a cost of $334 per ounce. Assuming a profit of $1000 per ounce for Ruby Hill, you get a profit of $127,000,000.
Barrick Mining is involved in three joint ventures in Nevada.
Barrick owns 33% of the Marigold mine. Barrick's share of production was 51,000 ounces (1.59675 Tons) at a cost of $761 per ounce. For the Marigold mine, assume a profit of $700 per ounce. The total profit would be $35,700,000.
Barrick owns 50% of the Round Mountain mine. Barrick's share was 178,000 ounces (5.5625 Tons) at a cost of $612 per ounce. Assuming a profit of $800 per ounce for the Round Mountain mine, we get a total profit of $142,400,000.
Barrick owns 75% of the Turquoise Ridge mine which produced 135,000 ounces (4.21875 Tons) at a cost of $569 per ounce. Finally for the Turquoise Ridge mine, assume a profit of $700 per ounce. This would give a profit of $ 94,500,000.
Barrick is actively exploring in the Carlin Trace in Nevada. The Carlin Trace is one of the richest gold deposts in the world. Barrick's annual report shows that 44% of the companies income comes from North America. Don't forget that Barrick is also mining silver along with the gold in Nevada. If you add all of the projected and conservative profits, the total is $2,884,300,000. This is a conservative estimate.
According to the Reno Gazette Journal Mar 5 2013, the taxes paid represent only 2.3% of gross proceeds:
"In 2011, Nevada's gold mining industry produced approximately $8.8 billion in gross revenue, Republicans said. On this revenue, $97 million was paid to the state's general fund in net proceeds, along with another $106 million paid to local government in net proceeds. This totals approximately 2.3% of gross revenues, Republicans said."
"In contrast, Nevada's gaming industry in 2012 produced $10.8 billion in gross revenues and paid $694 million. This amounts to 6.6% of gross revenues. The top-tier tax rate is 6.75% of gross gaming revenues."
If the gaming industry pays around 6.6% of their gross revenues, thats about 3X more than mining - and Nevada's gaming industry pays only HALF of National averages. The top-tier tax rate for mining is no where near gaming.
The overwhelming bulk of the mining proceeds go to Canada and other foreign countries. Canada (Barrick, Ontario) AND Australia (Rio Tinto) HAVE universal health care - thanks in part to Nevada mineral resources.
And I pay $1700 a year in property taxes on a house that has a negative value of $46,000, that much less than what it cost 10 years ago.
So thank you, Nevada Mining for all your concern! I'm certain there will be empty pits, rotting carcasses of birds and fish in stagnant water ponds, and no footprints left behind when the minerals run out. So Corporations are people? Not when it comes to taxation.