A gold dore bar produced at one of the Barrick mines. The bars can weigh upwards of 900 ounces and at today's prices, can sell for more than $1 million.
Jared Boyd

Nevada's Golden Child

Is the state's hardrock mining industry losing its grip?

  • The terraced walls of the Pipeline Mine pit near Elko, Nevada, part of the Cortez complex of three mines where Barrick expects to produce as much as 1.12 million ounces of gold.

    Jared Boyd
  • A miner is dwarfed by a truck used to haul rock from the Barrick pits.

    Jared Boyd
  • Barrick gold dore bars.

    Courtesy Barrick
 

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The message is clear: Life is good in Elko. The schools are first-rate, the streets safe, recreational opportunities abound and Native Americans, Latinos and working-class white people live in cooperative harmony. (In fact, the Shoshones in Elko have declined to fully support the tribe's lawsuit against Barrick.)

Part of this good life is no doubt due to the mining companies' desire to maintain their reputations as benevolent local forces: As part of a settlement with the Shoshone, for example, Barrick has set up a college scholarship fund for tribal members. And because mining unquestionably scars landscapes, releases mercury into the air and depletes local groundwater, Barrick has put land stewardship on its list of official corporate priorities. Schack even boasts of a company proposal to grow algae for biofuels in left-behind pit lakes.

Barrick currently employs 1,000 people at the Cortez Hills Mine, and will add another 100 jobs this year, at an average annual salary of $70,000 plus benefits. But those jobs don't help much with the state's revenues, because Nevada has no personal income tax. Even if Wal-Mart brings a franchise to Battle Mountain, Nevada will gain little from it: In addition to all the other taxes the state rejects, it has no corporate income tax.

Barrick effectively operates as a substitute local government in the absence of a real one, providing support to Great Basin State College in Elko, donating to community organizations, fighting house fires and providing emergency medical services in Crescent Valley. "We're careful not to replace government," Schack says, "but there are critical needs and we have to address them." Every now and then, the community asks too much, he admits, and the company says no.

It's not surprising, then, that the one state senator, Republican Dean Rhoads, and three assembly members who represent rural Nevada remain vigorously opposed to new taxes on the industry that sustains them. Like many people in the region, Claudia Wines, the director of the Northeastern Nevada Museum in Elko, worries that the international mining companies Nevada hosts will find other places to mine if Nevada costs them too much. "Mining has been part of our history right from day one," she says. "If we didn't have it here, we'd have as many economic problems as the rest of the state."

The quest for more mining taxes to distribute across the state is no different, Wines says, "than Las Vegas wanting to take our water." (The Southern Nevada Water Authority has proposed supplying Las Vegas with 16 billion gallons a year from the Snake Valley Aquifer on the Utah border, 300 miles to the city's north.) "We take offense at the idea that the main industry in northeastern Nevada has to pay for the problems in Las Vegas," she says.

It's true that, at the moment, unemployment figures are low in the mining counties. But in better times for the rest of the economy, the reverse is often true. And mining, by its nature, is a volatile business. Although some people you meet in Battle Mountain and Elko now say they wish that California could annex Las Vegas, one day, when the mines are empty and the blackjack tables are full, they may wish they had it back. In January 1994, when gold prices were low and mining operations near the Crescent Valley running down, unemployment in Lander County topped 15 percent. And when gold fell below $300 an ounce in 1999, mining-dependent Humboldt County cost $1 million more in state taxes than it had paid out.

Lou Schack says that one of Barrick's goals is to help create sustainable communities that will be able to thrive "whether we're here or not." What Barrick can't do, however, is make the gold last forever. The forces that threaded these mountains with minerals will never recur in a human timescale; when the minerals are gone, the money that makes Elko such a nice place to live will also disappear. And it won't take long: Barrick's Goldstrike Mine on the Carlin Trend might have five to seven years left; Newmont's nearby Emigrant Mine will likely produce only until 2017. Schack expects the gold at the $500 million Cortez Hills site to last at least for another decade, but that's "assuming favorable market conditions."

Nevada's Gloden Child
Jan Stabile
Jan Stabile
Apr 24, 2010 12:49 PM
As a native bore Nevadan living in Humboldt County, Winnemucca Nevada. I have seen firsthand both sides of the mining issue. As stated in the article the ore will not last forever. 20 years from now we will be asking what do we have to show for all the mountains of tailing piles, open pits with poisoned water, miles of roads cut into the landscape for test drilling, and mercury tainted rivers and lakes. Keep in mind that the vast majority of the gold went into jewelry production not into currency or for industrial needs. With any down turn in mining we will suffer with lower home prices and higher unemployment just as we did in 1999, but we managed before the mining boom and we will have to adjust once the ore runs out. The people of Nevada must consider this a fair trade.
Canada's *Golden* Child
Moe Badderman
Moe Badderman
May 08, 2010 11:31 PM
Taxes will not be increased, Canadian mining companies have the sweetest deal here in Nevada that money can buy, and the politicians in their pocket are more crooked than the casinos and their owners ever were.