A gold price plummet of more than 25 percent since January has led to cutbacks in Nevada’s mining industry — a smaller scale version of what the gaming industry faced when the U.S. economy collapsed, local Latin Chamber of Commerce members were told Friday.
Allied Nevada Gold Corp. canceled the expansion of two of its mines just outside Gerlach and halted construction of a 124-unit housing project near Winnemucca, said Dylan Shaver, a spokesman for the Nevada Mining Association.
Mining, the state’s ninth-largest industry, has managed to skirt massive layoffs, but jobs have been lost because of the unstable gold market. Although prices have rallied the past few days, the downturn has taken a toll on Nevada, the nation’s largest gold-producing state, Shaver said.
Forty of Barrick Gold Corp.’s 6,000 Nevada employees lost their jobs at the company’s Elko site, but the situation could have been much worse, he said.
One of the mining association’s member companies, which operates out of state, has laid off a third of its employees, Shaver said, citing it as an example of the possibility of tougher times ahead.
“The similarities are pretty stark — between what happened to Fountainebleau resort and Echelon resort and what the mining industry is experiencing,” Shaver said, referring to a pair of unfinished megaresorts where construction suddenly stopped.
“When the economy fell apart in 2009, the first thing to go was travel, and people stopped showing up at the tables,” he added. “Well, we can’t control the sort of product we produce — in this case, gold.”
Still, with all things considered, the industry isn’t doing too badly, Shaver told the luncheon crowd of more than 100 people at the South Point.
The industry still employs 10,000 people in Nevada, comparable to Wynn Resorts in Las Vegas, and its workers earn an average of $87,000 annually.
And gold isn’t the only natural resource that is key to Nevada, he said. There are lithium, turquoise and magnesium and rare-earth materials used to help construct the drones for the Department of Defense. So all is not lost, Shaver said, in an industry that is high-tech and whose job positions range from engineers, drillers and chemists to hydrologists, electricians and accountants.
Arnold Lopez, a NV Energy economic development executive who led the luncheon, said he worked in mining while in college, leading to an invitation for Shaver to speak.