Mining Exploration Investment in Nevada Could Be Weakening
On 2 October 2012, the mining news website Mineweb reported that Nevada, the top gold-producing region in the United States, may see a weakening of investment in mining exploration due to the state legislature’s fondness for tapping the mining industry to help ease the state’s deficit.
Mineweb quotes the preliminary results released by the Nevada Bureau of Mines and Geology, which indicated that in 2011, mining and exploration companies invested some $577 million (£358 million) in exploration. In a presentation to the annual general meeting of the Nevada Mineral Exploration Coalition on October 1, research geologist Emeritus Larry Garside noted that at least $500 million (£310 million) in exploration would be invested in Nevada in 2012. In 2010, however, investment in mining exploration in
Nevada was as much as $600 million (£372 million).
Nevada is considered to be one of the most mineral rich states in the US, with a recent report of the US Geological Survey (USGS) showing that out of the 3,633,034 ounces of gold produced in the US from January to June 2012, 2,761,750 ounces were mined in Nevada, whereas 395,454 ounces were produced from mines in Alaska.
!m(/uploads/story/511/thumbs/pic1_inline.png)Yet, out of the money spent in Nevada’s mining sector in 2011, only 53 percent was invested in actual exploration, whereas some 22 percent was used to cover land holding costs such as mining claims on public land. Mineweb quotes Ray Bacon, executive director of the Nevada Manufacturers Association (NMA), as saying that the regular revisions of Nevada’s mining taxation have caused the Silver State to lose its high ranking for predictability and stability, discouraging new mining investments, as well as investment in other sectors.
Ron Parratt, an exploration geologist and executive chairman of Renaissance Gold (TSE:REN, CVE:REN), noted that miners and geologists were unable to replicate their achievements of 10 or 20 years ago, since they were not able to get mines and projects authorised in a timely fashion.
At the beginning of September, in an interview with the website Seeking Alpha, Steve Alfers, current CEO of Pershing Gold (PINK:PGLC), explained that Nevada’s mining industry was facing certain policy challenges, particularly in terms of tax legislation. Mr Alfers pointed out that there was an ongoing debate whether the taxes for mining activities should be taken out of the State’s Constitution which would give Nevada’s legislators’ more leeway to change the tax structure or rate. “The uncertainty that this creates is not good for the industry,” said Mr Alfers, as quoted by Seeking Alpha.
The other legislative issue which miners in Nevada see as impeding exploration concerns attempts by federal agencies to increasingly restrict access to public lands in the Silver State. Mr Alfers notes that the Bureau of Land Management for instance has proposed to develop more stringent sage-grouse conservation measures and restrict development of public land considered priority sage-grouse habitat.
Yet, Mineweb reports that despite the potential legislative impediments to mining in Nevada, NMA’s Mr Bacon estimates that the improvement in technology featured in the 2012 MINExpo International, which took place from 24 to 26 September in Las Vegas, will dramatically increase the success rate of exploration ventures in the Silver State.