Mining in Nevada in 1997 increased over the prior year in terms of production amounts, but due primarily to lower gold and silver prices the value of production was less than 1996. From the discovery of the Comstock silver deposits in 1859 to today, mining has had a major role in the state's economy. The Nevada mineral industry in 1997, as it has for several years, led the nation in the production of gold, silver, and barite; was second in diatomite and lithium; and was the only producer of mined magnesite. Total mineral production in Nevada in 1997 had an estimated value of about $3.3 billion, down from a record level of $3.4 billion in 1996.

Production Highlights

Nevada's gold production reached 7,853,000 troy ounces in 1997, a new state record, and a 12% increase over the record high production established in 1996. Nevada is the third largest producer of gold in the world, behind only South Africa and Australia. Silver production exceeded 20 million ounces for the fifth year in a row and set a new record at 24,748,000 troy ounces. Copper production was 148,600,000 pounds, 50% more than in 1996. Lime production increased nearly 50% over 1996, largely due to increased demand by gold operations for pH control. Gypsum production also increased due to the construction industry's demand for more wallboard.

The trend of growing production of gold from underground operations became firmly established in 1996 and continued in 1997. Twenty percent (1.57 million ounces) of Nevada's gold production was mined underground. Barrick Goldstrike's Meikle Mine in Elko County is the largest underground gold mine in the United States with 1997 production of 574,308 ounces. New underground mines expected to begin production in 1998 include Getchell Gold's Turquoise Ridge Mine and Midas Joint Venture's Ken Snyder Mine. While open-pit mines will continue to produce most of Nevada's gold, underground mines will become increasingly important.


According to the Nevada Department of Employment, Training and Rehabilitation, for the last four quarters available (last quarter of 1996 and first three quarters of 1997), Nevada mining operations employed 14,758 workers. The total payroll for that period was $734,096,985 making the average annual pay for a mine worker $49,742, the highest average for any sector in the state. The average salary for all Nevada workers in 1997 was $26,791. In addition to the direct employment in mining, there are an estimated 48,000 additional indirect jobs in the state related to providing goods and services needed by the industry.

Taxes and Other Impacts

The taxes paid by the mining industry to state and local government is derived from property taxes, sales and use tax and, unique to the minerals industry, net proceeds of mines tax. The net proceeds of mines tax for 1997 totaled approximately $30.2 million, with $16.2 million paid to the state and $14.0 million paid to the counties. Revenues generated from property and sales taxes for 1997 are not yet totaled as of this report, but they should be approximately equal to those paid in 1996.

The economic impact of mining is important for the state as a whole, but the greatest impacts are felt by local communities near the mines. These towns, like Elko, Lovelock, Battle Mountain, Winnemucca, Beatty, Eureka, and Ely enjoy healthy economies because of the high paying employment and the taxes and contributions of the industry.

In addition to the positive economic impacts, growth related to mine development often effects nearby communities in ways that are difficult for local governments to deal with. Demands on schools, police, fire protection and other public services increase when large mines open or undergo expansions. Many mining companies help offset this increase by providing donations of money, water systems, school buildings, buses and other services to the communities where their mines are located.

Permitting and Reclamation

Before mining can take place, plans must be submitted and permits must be obtained from federal and state agencies to ensure protection of water, air, wildlife, land, and other resources. Nevada and federal laws and regulations require that lands disturbed by mining must be rehabilitated so they can be used for other purposes once mining is complete. The goal of this process, called reclamation, is to return mined areas to a condition capable of supporting resources and activities such as wildlife habitat, livestock grazing, recreation and new industrial uses. To insure reclamation is done, bonds are posted by operators and held by the government agencies. Bonds are released only after the area is stabilized and reclamation criteria are met. The various uses of the land after mining and reclamation are done also have a beneficial economic impact on nearby communities and on the state.

Gold Reserves

Nevada's reported gold reserves at or near currently operating mines which can be mined at a profit with reasonably foreseeable economics stood at about 103 million ounces at the end of 1997. Many Nevada mining operations have been able to add to reserves each year with development drilling, thereby extending their lives. It is also true that mining companies do not completely drill out their ore deposits if reserves are sufficient for their current planning horizon. Extensive additional gold resources are present at properties that are currently in various stages of development and permitting. The price of gold, however, is an important factor in determining whether a reserve is really a reserve or just a sub-economic resource. With the gold price currently at a relative low, many companies have had to reevaluate their reserves, and reclassify some as sub-economic resources. If the price of gold rebounds, these subeconomic resources will regain their reserve status. At current gold prices, the existing proven reserves are enough to sustain gold production at current levels for about 15 years.


Exploration for new deposits, particularly gold, is an ongoing effort by the producing companies and many others who do not operate mines in the state. About 310 geologists in Nevada are employed primarily to explore for mineral properties that can be developed into new mines. These geologists, together with their support staff and expenditures on drilling, assaying, travel, and other related costs, represent a significant additional positive economic impact, particularly in the rural communities. In 1997, exploration spending in Nevada totaled about $131 million.

Minerals Other Than Gold and Silver

Minerals besides gold and silver are also important to Nevada's economy. Industrial minerals such as barite, copper, diatomite, gypsum, limestone, lithium carbonate, magnesite, and specialty clays in the state. Sand, gravel, and crushed stone are critical to the building requirements of the state's cities and towns and to the infrastructure of roads and airports.

Oil and gas exploration and production in Nevada is a small industry when compared with mining, but it does contribute to the economy of east-central Nevada. In oil field terms, Nevada is a "frontier," meaning its potential is really yet to be realized. Oil production in 1997 was about 1.0 million barrels (42 gallons per barrel) with an average value estimated at $15.00 per barrel, or $15 million. Nevada oil is used for the production of kerosene, diesel, boiler fuel and asphalt. In 1997, 14 new wells were drilled for oil and four of these became producing wells. These wells, many of which are risky exploration wells called wildcats, indicate the oil industry's enthusiasm for Nevada's potential. No natural gas is commercially produced in the state, but minor gas produced at the Kate Spring Field in Railroad Valley is used to fuel onsite equipment.

Nevada is rich in geothermal resources. There are currently 14 plants at 10 locations in the state with a total electric generating rated capacity of 236.8 megawatts (MW). Net geothermal electrical production sold in Nevada in 1997 was 1,347,655 MW hours with a net value estimated at $107 million. Electric generating capacity and output have been fairly steady for the past several years. Geothermal heat is also used in a variety of commercial, domestic, and public applications in Nevada. Mining, aquaculture, and agriculture also benefit from geothermal resources. Schools in Elko County, and homes and commercial buildings in Lincoln and Washoe Counties are examples of public and private facilities in Nevada using this renewable energy resource.


Nevada's mineral industry continued to be a major economic force in the state during 1997. This situation should continue for many years to come. The conditions that lead to this optimism are that most Nevada mines have significant known reserves with good potential to add to those reserves. Gold exploration efforts have been successful and several new large mining projects are scheduled to be developed within the next several years. Oil and gas exploration has increased, as the state has caught the eye of oil company explorationists. Finally, geothermal energy production has remained steady.