Introduction to Nevada Mining
The premier mining jurisdiction in the US
Nevada is the top mining jurisdiction in the US and is unlikely to give up its throne in the coming years. Despite a two-rank fall in the Fraser Institute’s Annual Survey of Mining Companies from 1st in 2021 to 3rd in 2022, Nevada remained the top mining jurisdiction in the US – and again, a world leader – this year. Indeed, mining is critical to the economic transformation of Nevada. The industry surpassed the US$9 billion mark for the first time in 2022, reaching US$9.3 billion, an increase of almost a billion since the beginning of 2021, according to the Bureau of Economic Analysis.
First and foremost, Nevada is a state where precious metals production rules. Boosted by heavyweight producers such as Nevada Gold Mines (the joint venture between Barrick and Newmont), and home to the largest gold-producing US mine at the Carlin Complex, Nevada alone represented 77% of US gold production in 2021, and close to 5% of world production. With gold trading at a lower price than in 2021 (US$1,749/oz as of December 2022, compared with US$1,820 in December 2021) but remaining relatively high, opportunities for further exploration and operation strengthening arose for majors like NGM, Coeur Mining, and i-80.
Besides its abundance of precious metals, Nevada is endowed with several of the “future-facing commodities” necessary to achieve a green energy transition. The state is home to the only lithium-producing mine in the US, Albemarle’s Silver Peak, and is also a producer of copper. And from a mineral – but also national security – standpoint, Nevada’s importance is second to none. Geopolitical tensions prompted in 2022 by the Ukraine War and the Taiwan strait crisis have further highlighted the importance of minerals for national security, and according to the Nevada Division of Minerals, Nevada contains known occurrences of 21 of the 35 critical minerals in the USGS list, with these occurring in 60% of the state’s historic mine districts.
Nevada is also home to pioneers in terms of technological innovation, talented contractors, and expert consultancies, all contributing to improving modern mining practices. This is key at a time when demand for supply chain transparency and ethically sourced minerals is growing.
Operators can rely on technology firms like Lilac pioneering Direct Lithium Extraction (DLE) advancements, engineering minds working on increasing gold recoveries like KCA, or consultancies like SRK Consulting with expertise in environmental regulation and mine closures to help steer the decision-making ship across the troubled waters of permitting. As put by Tyre Gray, president and CEO of the NVMA: “Nevada is known for innovation. We are at the forefront of conversations on the best ways to extract lithium, and our mining techniques using microscopic mining or heap leach technology represent a huge uptick in how mining operates in the world.”
"Nevada has been mining for over 150 years. Mining techniques have changed with new technologies, and we have a unique understanding of how to mine in a more innovative, sustainable, and safe way."
Tyre Gray, President and CEO, Nevada Mining Association
Unique initiatives prompted by a superior policy and regulatory environment
Again, Nevada figured among the top 10 world jurisdictions based on policy attractiveness due to low uncertainty regarding the fluctuation of regulations, allowing for a de-risking of projects entering permitting stages. Political, economic and social concerns continuously worry shareholders and investors in Latin American, African and Asian jurisdictions, but the Nevada landscape is one of stability in terms of attracting capital.
Mining was a catalyst for Nevada to become a state, and in that regard, authorities and regulatory bodies perpetually understand the socio-economic importance of mining for the development of Nevada. This mining-friendly approach has trickled down from the authorities to the legislative bodies. As put by Comstock Inc.’s CEO Corrado DeGasperis: “Nevada has the most robust environmental protection agency that is pro-business. They want you to be clean, but they want you there.”
Unique environmental and reclamation efforts further reinforce Nevada’s position as a modern mining leader in North America. Through the ‘smart-from-the-start’ program, firms must plan for closure before a shovel hits the ground. In another unique breakthrough, Nevada has developed a standardized reclamation cost estimator, an Excel-driven template where the operator inputs the amount of disturbance from proposed activities and accounts for required water treatment. Michael Visher, the administrator of the Nevada Division of Minerals, explained: “This reclamation bonding provides certainty for both the operators and the regulators that there will be sufficient funds for reclamation, not repeating mistakes that were made in the 1970s and 1980s.”
"Unique to the state, Nevada has developed a standardized reclamation cost estimator, an Excel-driven template where the operator documents the amount of disturbance such as drill holes, the length of the roads, the pits, tailings ponds, and water treatment."
Michael Visher, Administrator, Nevada Division of Minerals
Strategic opportunities, generational challenges
When asked to answer an NVMA survey about the most significant business challenges and threats to the mining industry, almost one in two respondents named ‘hiring/retaining quality employees’ first, with inflation arriving second with less than 25% of the votes. The message is clear; the labor shortage is the biggest threat to the industry today. Direct mining jobs in Nevada have this year fallen below the 15,000 bar, resulting in 383 fewer employments than in 2021, according to the US Bureau of Labor Statistics.
Several factors contribute to the industry – and countrywide – skilled labor shortage. Recovery from the Covid-19 pandemic, the lower attractiveness of the sector in comparison with the tech industry for more innovation-focused jobs (despite above-average salaries and often-hefty benefits for mining employees in Nevada), but also cross-over for expertise in the electrical and mechanical fields. As spotted by Michael Judd, business development manager at MMR Constructors: “We are seeing a boom in data centers, semiconductors, and manufacturing facilities, driving a major demand for a craft in which there is lots of crossover with mining”.
Unlike commodities, the job market is not a cyclical one, and the roots of the industry-wide shortage appear more organic than temporary. The US Bureau of Labor Statistics shows that Nevada’s mining employment has followed a decreasing trend, despite occasional spikes, since it peaked in 2012. Michael Brown, executive director of the Governor’s Office for Economic Development, explained this generational challenge and the impact of demographics on employment: “The challenge in Nevada is that only 13% of Nevadans were born in the state, and 85% of our population lives in urban areas, so mining is in a constant state of having to reintroduce itself. In 2000 there was a recession, gold prices were down, and students weren’t enrolling in mining programs. There is almost a missing generation of mining lawyers, technology, and water consultants in the US.”
Miners are not the only segment of the industry affected by labor shortages. Regulators of the BLM, keystones to support Nevada’s mission in helping the US achieve mineral independence and in charge of managing 48 million acres of public lands, face challenges in staffing leading to delays in permitting processes. The Nevada BLM is amongst the most efficient Bureaus in the US, and all operators agree that in Nevada, regulators “speak the same language” as miners. But the long-standing challenge of resources puts in peril the timeline of projects that ought to be developed in a swift fashion to meet green transition goals. As put by Mitchell Krebs, president, and CEO of Coeur Mining: “There remain challenges on the regulatory and agency side. We need to act quickly to pass on that knowledge and allow Nevada to remain a leader.”
Giving back
Nevada’s mining industry knows no match across jurisdictions when it comes to local community involvement. After having supported small businesses during the pandemic through the i-80 fund, NGM transitioned this fund towards being a start-up supporting fund. In the Elko and Spring Creek area, the firm committed US$3 million to the Boys & Girls club daycare facilities, now named Nevada Gold Mines Early Learning Centers. In Ely County, Robinson mine made a US$500,000 donation to a new early learning center to provide childcare to young children. Tyre Gray expanded: “The industry has invested in childcare facilities, which is a woman’s rights issue. Unlocking the power of gender equity comes through having parity in childcare.”
Again in 2022, ESG topped the chart for risks and opportunities for mining firms. As a modern mining jurisdiction, Nevada understood the opportunity and made a step further when promoting diversity efforts in an industry historically male-dominated. Data from several indicators highlight that a diversity-led approach can lead to up to 20% increase in firms’ profitability. Having concluded her first year as chairwoman of the Board of the NVMA, Amanda Hilton hopes to lead by example: “A pillar of ESG is diversity in the workforce”, she explained.
Looking ahead, industry players at the state and federal levels are actively tackling challenges to create the next generation of miners. In November 2022, the GOED received state approval to contract with the University of Nevada, Las Vegas, and the University of Nevada, Reno, to create a program aimed at retaining top science and engineering talent in the state. NGM also has partnerships with these universities. In 2021, the mining tax bill, Assembly Bill 495, prompted a US$169 million contribution to the state education fund by the mining industry, further reinforcing its commitment towards access to education and fostering the next generation of miners. Understanding that talent is a natural resource, the industry can also count on its Associations. The NVMA launched the “360 Internship Program”, while Mark Compton, president of the AEMA, said: “AEMA advocates at the federal level for more funding for agencies to be able to hire skilled personnel. We have helped develop and support legislation at the federal level.
The following pages will analyze how the mining industry in Nevada is demonstrating resilience to organic, geopolitical and financial challenges, and how actors throughout the supply chain strive to reinforce Nevada’s position as a world leader in modern and sustainable mining. Historically, Nevadan miners were individual explorers, who set foot in the harsh and unforgiven landscapes of the silver state, creating whole communities by themselves. Today, faced with net-zero targets and energy security requirements, the industry will more than ever need to work in conjunction with federal decision-makers to follow a “visible-hand” concept of government interventionism in market affairs.
Image courtesy of Coeur Mining