By BRIAN SODOMA
April 22, 2012 - 1:05 am
Rocky Smith had been in the construction field for nearly half his life and was enjoying the Las Vegas boom years when 2007 hit. Change was afoot and jobs would soon become scarce. Gone were the days of finishing a big union project and hopping onto the next one while collecting a nice signing bonus as well.
So Smith, now in his late-30s, has done what other tradesmen have done since then. He's simply followed the work.
Four years ago, he signed on with CB&I, an Illinois-based engineering and construction firm with considerable work in the oil and gas exploration field. Smith still lives in Las Vegas with his wife and two sons but has become a bit of a construction gypsy to keep the income rolling in. And the move has paid off.
For the past two years, Smith has been working at ExxonMobile's Kearl Oil Sands project in Alberta, Canada, some 1,800 miles from Las Vegas. CB&I has been building a new extraction unit to aid in ExxonMobile's quest for oil found in the sand a few meters below the surface. The open-pit mining operation is scheduled to come online later this year and should eventually be extracting some 110,000 barrels of oil a day at that point; and with later expansion, output should climb to 300,000 barrels a day.
Prior to his Canada tenure, Smith, who is a health, safety and environmental oversight manager, had stops in California and the Caribbean. In Canada, he works for 20 days then comes home for eight, he says. In the Caribbean, he worked for 60 days straight before coming home for just 10 days.
"The financial aspect makes it easier to live more comfortably when you're at home," he said.
Smith earns double what he made in similar positions in Las Vegas.
He is content with the work and even the work schedule, for now. He lives in an upscale trailer unit on the job site, basically a 12-by-12 room with a private bathroom, and his family has gotten used to the schedule on some levels. He'll be faced with a decision soon, whether to sign on for three more years in Canada or not.
"Those winters are brutal," he admitted.
Does he stay with the consistency that has its financial pluses and scheduling minuses? Or does he roll the dice on a new location?
The business
Smith is not alone with these dilemmas. Many tradesmen have had to do just the same, and it is probably a strong contributing factor to the population exporting going on these days in Nevada offsetting the valley's minimal in-migration. Since 2007, when the valley's real estate bubble began bursting, tradesmen also have learned which few business categories are adding jobs. Mining is one of them.
Some tradesmen, engineers, mechanics or heavy equipment operators are heading to Idaho and Montana to do oil and gas exploration work like Smith. There are many types of mines in the industry to consider.
The pay is good, but relocation always becomes the sticking point, said Michelle Rauer, a recruiter with Simplot, which has a silica mine in Overton that employs about 40 people, down about a dozen from boom years as silica was used heavily in construction materials. But Simplot also employs hundreds in its Utah and Idaho ore mining activities that support its fertilizer business.
The company is a major conglomerate with about 10,000 employees companywide. Getting in with a mining operation in Utah or Idaho could mean future promotions or moves to other segments of the company, if someone is flexible about moving.
"You always want to look at the local talent and not uproot the family. That's a win-win for everybody," Rauer said.
On any given day, Rauer juggles 30 to 40 jobs to fill, about five directly related to mining activity. Right now Simplot is in need of mining engineers, geologists and other engineers.
She said the toughest part when it comes to recruiting people from Las Vegas is tied to decisions regarding real estate. Many have a hard time walking away from underwater homes or grapple with selling homes at a loss for a new start in a new industry far away.
"We find that some people are just not willing to walk away," she added.
Nevada gold
Nick Tompkins, director of talent acquisition for Newmont Mining, is another Las Vegas story gone north. Working in human resources for a major homebuilder during the building boom in Las Vegas was a fun ride while it lasted. He, too, started to see cracks in the industry in 2007. His timing for getting into the gold mining industry couldn't have been better as the price of gold has soared during the recession, and the company's gold mining operations in Elko County are booming.
Newmont has eight gold mines in Northern Nevada, and the area is the fourth-largest producer of gold in the world. About 92 percent of the gold mined in the United States comes out of Northern Nevada, Tompkins said.
Newmont employs about 3,700 people in the area. It hired 600 last year and will probably hire about the same number again this year. Elko County's total population is about 50,000.
Tompkins is looking for those with applicable skills to his industry who can be hired and trained. Truck drivers, for example, can be trained to drive trucks with a 250-ton payload, vehicles that Tompkins describes as "driving your house around." Commercial electricians, mechanics and construction heavy equipment operators can find a place in the mining industry with the right training.
An entry-level truck driver can start at $54,000 per year, Tompkins said, while the mining industry average wage tops $80,000 annually, according to the Nevada Mining Association. But Tompkins also cautions unskilled workers who think there is a desperation level on the part of the mining industry to hire anyone. That's not the case.
"Mining is a pretty technical profession. We do have entry-level jobs, but in general, we require you do have a GED or high school diploma and some skills applicable," he added.
Like Rauer, Tompkins is also on the lookout for mechanics, electricians, welders, geologists and geostatisticians, and above all mining engineers. The 14 mining engineering programs in the country produce about 200 graduates annually. That figure is a far cry from the 700 graduated among 25 institutions in the 1970s.
"There's a constant challenge to get as many engineers as you want," he added.
How long can it last?
When Newmont started mining Northern Nevada gold 49 years ago, the life expectancy of the mine was eight years. If the company stopped exploring today, there would still be 22 years of life left in the mine, Tompkins added.
Newmont is the largest Nevada landowner, after the BLM, with 2.1 million acres of land in Northern Nevada. The company also is looking to open the Long Canyon mine within a couple years, producing another 400 jobs.
Tim Crowley, president of the Nevada Mining Association, said an informal survey of its members showed 1,500 to 2,000 jobs will be added this year, either directly by the mining industry or support industries.
Safety concerns have been addressed through technology as well. In more dangerous situations, some machines are operated remotely, and the overall safety culture has changed immensely through the years, Crowley added. This adds to the appeal of working in the industry as well.
Beyond the gold boom and longtime copper mining business going on in the state, there is other exploration activity, Crowley added.
Molycorp recently revived the Mountain Pass California rare earth mine near the California-Nevada border, which taps Las Vegas for its workforce. He said lithium for batteries, barite for oil and gas exploration drilling fluid and diatomite used in a variety of filter applications are other areas of exploration popping up in the Silver State today. Geothermal energy in Churchill County also is classified as mining work.
Molybdenum, found in vitamins, stainless steel and a host of other products, is on tap as the next big mining site in Eureka. Owner General Moly is awaiting an August BLM approval for the project to move forward with 400 hires on a site that should have a lifespan topping 40 years.
Another nearby site is scheduled to open by 2017, which should have a 32-year lifespan. In total, the two sites will product 12 percent of the world's supply of molybdenum.
Crowley said exploration technology has allowed companies to predict future findings more accurately, and even with conservative prediction as not to mislead investors, there will be mining work well into the future.
"I think the visual of an old mining town with the boom and bust is quite different from what we are mining today," he said. "Back then when they stopped seeing it, they stopped mining it. Today, we're much more capable of having sustainable mines."
Economic links, housing
The Nevada Mining Association estimates for every mining job, there are about five other jobs created. The industry directly employs more than 12,000 people today in Nevada, and whether it's a donut shop or grocery store in Elko or elsewhere, it's clear ancillary service industries hinge on the industry's progress.
While everyone in the industry and beyond sees this economic branching, perhaps the greatest area of expansion reluctance comes in housing. Housing shortages in Elko, Ely and in states to the north have been well-documented. Mining companies offer temporary, trailer and hotel housing to workers, but supply is hitting a breaking point, added Tompkins.
Newmont is building long-term relationships with employees. About 30 percent of its hourly staff and 40 percent of its salaried staff has been with the company for 10 or more years. Those numbers probably speak to a population that would happily set up permanent roots in the area, if there were homes to buy. Tompkins said that while the housing shortage is not a barrier to hiring yet, it soon will be.
While developers are talking partnerships with mining companies, there is still hesitation due to the industry's conservative estimates, usually only planning a decade or so out at a time for a site, Crowley added.
"When you talk about 10- to 12-year lifespans, banks and investors become somewhat reluctant," he said.
Zach Spencer, a spokesman for General Moly, said the company has about $5 million set aside for a housing development near the Eureka County Fairgrounds. Spencer's team, like Tompkins, is talking up the benefits of living in a rural environment that is a few hours from Reno and about five hours from Las Vegas to prospective employees, and there will probably be plenty of takers from areas such as Southern Nevada whose construction and engineering workforce is still seeing job cuts even with whispers of an economic recovery taking root.
Eureka only has a population of 600 people today and already has a housing shortage, said Spencer. General Moly owns a trailer park in Eureka and has worked with the city to house some existing residents. The mining operations coming online will more than double the population of Eureka, and given the other service jobs that probably will be created, there will easily be more housing needed.