Silver State, mining go deep – by Jennifer Robison (Las Vegas Review-Journal – December 1, 2013)

http://www.reviewjournal.com/

Editor’s Note: Nevada 150 is a yearlong series highlighting the people, places and things that make up the history of the Silver State.

Before there was Nevada, there was mining. In the state’s earliest days, mining wasn’t just our key industry. It was “essentially our only industry,” said Jeremy Aguero, a principal in local research firm Applied Analysis, and author of a September report for the Nevada Mining Association on the role of the sector in our economy.

“The mining industry was instrumental in the formation of the state and the governing laws that we still live with today,” Aguero said. “It was, for the vast majority of the history of the state, its largest single employer, and that’s still true in many rural counties today. We are the Silver State in so many ways. Our mining legacy is everywhere in Nevada, and our economic landscape clearly reflects its long history here.”

Added Tim Crowley, president of the Nevada Mining Association: “We really founded the state.”

That’s tough to argue. Mining’s rich history here traces back to 1859, half a decade before statehood. That’s when prospectors began digging up the Comstock Lode, an epic ore body that yielded millions of ounces of silver and gold. The vein birthed some of the biggest boom towns of 19th century America: Virginia City’s population exploded to nearly 30,000, making it the biggest town between Chicago and San Francisco in the 1860s and ’70s.

A century and a half later, Nevada’s 126 mining operators make up a relatively small part of the state’s economy, mostly in the north, and in rural areas. It’s our seventh largest sector, at only 5.3 percent of gross state product, or $7 billion in a $133 billion economy. But the industry still asserts outsized economic effects on the state.

Consider that jobs in metal-ore mining in particular grew 80 percent in Nevada from 2003 to 2013, even as employment in all industries averaged 6 percent gains, according to Applied Analysis. Mining has accounted for 14 percent of all job growth in Nevada since 2009. It also pays some of the state’s highest salaries. Metal-ore mining workers averaged $86,476 in 2012, 98 percent more than the overall average of $43,680.

Wage growth has been huge, too, with incomes spiking 114 percent from 2003 to 2013, compared with 39 percent growth among all jobs. Mining paid $431.4 million in taxes in 2012, including $255.6 million in industry-specific net proceeds of minerals and royalties levies, and it generated a total economic output of $8.8 billion.

Hold on — there’s more. Mining’s gross domestic product in Nevada expanded at an annual rate of 17.9 percent from 2002 to 2012, compared to overall growth of 4.9 percent, and an increase of 4 percent in accommodations and food. The industry also supports more than 2,000 vendors statewide, Aguero said. That includes some of the Las Vegas Valley’s best-known businesses, such as Cashman Equipment Co., which recently sold Barrick Gold Corp. nearly $200 million worth of ore-hauling trucks, and Ahern Rentals, which quintupled its Elko staff from 2010 to 2012 to handle new business from contractors there.

What that all means is that, amid half a decade of recession-related news about Nevada’s foundering construction sector and its relatively stagnant gaming and tourism industry, mining has told an unusual statewide growth story.

That’s mostly because of gold.

About 90 percent of the state’s gross proceeds from mined commodities come from gold. To understand why, you’ll have to go back a little earlier than statehood — about 350 million years earlier, to be exact. That’s when explosive volcanic eruptions, heaving fault lines and vast seas across what’s now Nevada combined to flood underground cavities with water. Complex chemical reactions caused gold to form and concentrate in the water. As the water cooled and receded, it left gold deposits on subterranean rocks. Those geological bodies today make up one of the world’s most productive gold-mining regions.

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