Mining in Nevada in the 1980'S: Background Paper 87-1
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BACKGROUND PAPER 87-1 MINING IN NEVADA IN THE 1980'S TABLE OF CONTENTS I . I ntrod u ct i on. 1 II. The Economic Effects Of Mining On Nevada............. 6 T he Tax at i on of Min i n g . 8 Mining Employment and Payrolls....................... 9 III. Issues Surrounding Mining In Nevada.................. 12 Restrictions on the Use of Public Lands.............. 12 Eminent Domain for Mining............................ 14 I ntegr a 1 Vis t as. 14 I V • S u mm a r y . 15 V. Selected Bibliography................................ 16 Figure I Map of Nevada Indicating Location of Deposits of Gold in Nevada................................................ 3 Figure II Map of Nevada Indicating Location of Deposits of Silver in Nev ad a. • . 4 Table I Nevada1s Role In The United States l Mineral Supply....... 2 Table II Major Mining Operations In Nevada, 1985.................. 2 Table III Percentage Of Assessed Valuation Accounted For By Nevada1s Mining Property And Net Proceeds Of Mines, F is cal Yea r 1984 - 1985. 9 Table IV Mining Employment By County In Nevada, 1985.............. 10 Table V Annual Mining Payroll By County In Nevada, 1985.......... 10 MINING IN NEVADA IN THE 1980'S I INTRODUCTION The early history of Nevada is, to a great extent, the history of the Comstock Lode. This vast deposit of silver in the vicinity of Virginia City, Nevada, was, in fact, responsible for Nevada's separate existence as a sovereign state. As H. H. Bancroft observed: Nowhere else in the world do we find a society springing up in a desert wilderness, so wholly dependent on a mountain of metal, so ruled by the everchanging vagaries of its development, and which finally attained the full measure of a prosperous commonwealth * * *. After the exhaustion of the Comstock Lode in the 1880's, Nevada's mining industry declined precipitously, only to be revived by the discovery of precious metals in Goldfield, Rochester and Tonopah, Nevada, around the turn of the century. The Goldfield-Tonopah boom lasted until the early years of the Great Depression. The 1930's witnessed the rapid development of important deposits of base metals, such as copper, lead and zinc. Copper was par ticularly important to Nevada's economy for the next several decades, providing the main economic base for communities such as Battle Mountain, Ely and Yerington, Nevada. Although copper mining declined rapidly after 1975 and ceased entirely in 1978 in response to stringent environmental regula tions and a decline in the world price of copper, Nevada has remained an important producer of other minerals. For example, the McDermitt, Nevada, mine near the Oregon border has for several years produced almost all of the Nation's mercury. The McDermitt mine is, in fact, the only primary producer of mercury in the American hemisphere. Nevada also leads the Nation in the production of barite and magnesite; is second in the pro duction of diatomite and lithium; and third in the production of fluorspar, molybdenum and tungsten. Table I shows Nevada's role in the United States' mineral supply. A list of Nevada's most important mining operations is shown in Table II. However, the current mining boom is based primarily on the pro duction of gold and silver. Over the last 5 years, Nevada's gold production has quintupled. The state now produces over half the Nation's gold and, barring some unforeseen disaster, such as a dramatic decline in price, gold production in Nevada is expected to continue to increase at least until the year 2000. Figures I and II show the location of known gold and silver deposits in Nevada. 1 TABLE I NEVADA'S ROLE IN THE UNITED STATES' MINERAL SUPPLY 100% of Magnesite 99% of Mercury 83% of Barite 58% of Gold 35% of Lithium 15% of Gemstones 13% of Silver TABLE I I MAJOR MINING OPERATIONS IN NEVADA 1985 Number of Project Product County Employees Freeport Gold Mine Gold Elko 295 Carlin Gold Mine Gold Eureka 575 Horse Canyon Mine Gold Eureka 106 Pinson Mine Gold Humboldt 134 Sleeper Mine Gold Humboldt 137 Copper Canyon Mine Gold Lander 400 Cortez Gold Mine Gold Lander 142 Sumich Mine Gold Lander 100* Nevada Cement Plant Cement Lyon 160 Candelaria Mine Gold/Silver Mineral 143 C-E Basic Magnesite Nye 117 Round Mountain Gold Mine Gold Nye 276 Paradise Peak** Gold/Silver Nye 498 Colada Plant Diatomite Pershing 110 Alligator Ridge Gold Mine Gold Wh ite Pine 157 *No longer in operation. **Employment during development phase. The current renaissance in gold mining in Nevada has been made possible by a combination of economic changes and technological innovations. The primary economic change has been the dramatic increase in gold prices. In March 1968, the Federal Government established a two-tier pricing system which allowed the price of gold to fluctuate freely in response to the forces of supply and demand. In 1974, the Federal Government went still further, removing restrictions on private ownership of gold. In the late 2 FIGURE I INSET o, 5,0 Scale, miles LEGEND • Oc:c:urrenc:e A Princ:ipal depoalt Source: Principal Deposits of Strategic and Critical Minerals in Nevada, N. T. Lowe, Russell G. Raney, John R. Norberg, United States Bureau of Mines, 1985. 3 FIGURE II --J------:-~:~ DE !~~~---------.. i . I .' ,,~ • ---l · , I J- . I·~· ;. ... I • .&: '"' .: '-,- I I' i ~.. :- : .' i I ] I. ~ I I 0 -: 'L"! 0 .-, "L -. ,. ,/) -T-]' ,-.: i I -~ I. • '" I ". i . i :<.. r- ~ -'b' '" .. 1. 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""" . I ~J . ,~~( ... LEGEND - • Occurrenoe . '. "'...,,~ . ~.\" ~~ Source: Principal Deposits of Strategic and Critical Minerals in Nevada, N. T. Lowe, Russell G. Raney, John R. Norberg, United States Bureau of Mines, 1985. 4 1970's, loss of confidence in the economy and persistent high inflation made gold an attractive investment for many people. As a result, the price of gold rose from $35 an ounce in 1967 to a peak of approximately $850 an ounce in 1980. Although the price of gold currently is around $400 an ounce, it still remains high enough to make most of Nevada's mines profitable. Technological changes have also stimulated gold mining. Unlike previous gold mining booms, the present one is based primarily on low-grade ore and disseminated gold. For example, at the Round Mountain, Nevada, mine, approximately 160 tons of rock must be moved to produce 1 ounce of gold. Deposits of this type could not be exploited profitably using traditional methods. One of the processes which makes the exploitation of low-grade deposits possible is heap leaching. At Round Mountain, the largest heap leaching operation in the world, crushed ore is piled 35 feet high on an asphalt pad. For a period of 50 to 60 days, the ore is sprinkled with a weak solution of sodium cyanide, which dissolves the precious metals. The pregnant solution is then processed to recover the gold and silver. A diagram of this process is shown below. LEACHING FRESH WATER CRUSHED ORE WITH LIME LEACH WASTE LEACH PADS LEAN SOLUTION ~t-_____.!P:!!R~!..a!ll..!-~IIlIt..!..!JIWi.----_ TO CARBON ,... ADSORPTION i FROM CARBON ..........---. ,........J.--4-~--4-_--.J!~~l4~Il..!.lIl!!...----I+--- ADSORPTION I I I lc- SOLUTION _I HEATER L..-___---' ,.- -- -- --FUEL OIL 5 Unlike the mines on the Comstock Lode and other early mlnlng areas, most of Nevada's modern mines are open pit operations. In fact, the only major underground mine remaining in Nevada is the Sixteen-to-One mine at Silver Peak, Nevada. Open pit mining makes it possible to use larger trucks and excavating machinery than could be used underground and to remove ore more efficiently. I I THE ECONOMIC EFFECTS OF MINING ON NEVADA Despite the enormous quantity of gold, silver and other minerals produced in Goldfield, Tonopah and Virginia City during the 19th and early 20th centuries, the true significance of these early mining booms for the state's long-term economic development is debatable. Nevada did not have the banks, factories and ware houses necessary to provide the mines with capital, equipment and supplies. Consequently, the mines relied primarily on out-of-state suppliers and the larger part of the economic bene fits went to other states--particularly California. As the historian H. H. Bancroft said of the Comstock boom: What advantage to Nevada has been her mountain of silver? What advantage to her organization as a state? Some, no doubt, but more to individuals than to the commonwealth at large. To the later inhabitants, the merchant, the miner, the farmer, the professional man, it is not a matter of great moment, the fact that millions of money have been taken from somewhere about Sun Peak, leaving hills of debris and ghastly holes in the ground--money squandered by lucky gamblers in New York and Paris, and used for purposes of political and social corruption in Virginia City and San Francisco. Less than the least of the tailings of this vast output of wealth has gone to benefit Nevada. The present situation is somewhat different. Other sectors of Nevada's economy are now well developed and better prepared to supply the needs of the mining enterprises and their employees.