State’s mining increasingly underground | nnbusinessview.com

State’s mining increasingly underground

John Seelmeyer

Slowly and probably inexorably, Nevada’s gold mining operations increasingly are moving underground.

It’s a trend that boosts mining companies’ costs a growing issue if precious minerals prices to continue to retreat from the lofty levels they reached earlier this year and it’s a trend that raises some difficult new manpower questions for the industry.

A new report from the Nevada of Minerals notes that underground mines accounted for 23 percent of the state’s gold production in 2005. That’s up from 22 percent a year earlier, and the percentage has been steadily climbing for several years.

An economist at the University of Nevada, Reno, who closely follows the industry says underground techniques will become increasingly important.

“The trend will clearly continue as the industry matures and as near-surface ore bodies that can be mined with open-pit techniques are exhausted,” says economist John Dobra in a report for the Nevada Mining Association.

The implications, Dobra says, are wide-ranging. The industry will need to make hefty investments in new equipment as it shifts from surface mines to underground operations. Production costs at underground mines often are higher than they are at surface mines. And workers need to learn a new set of skills.

On the other hand, notes Nevada Mining Association President Russ Fields, the costs of reclaiming underground mine sites often are lower because they don’t involve the same disturbance as a surface operation.

Some of the recent development of underground operations, Fields says, has come as mining companies follow linear roots of gold veins that extend as offshoots from the walls of surface mines. Often, he says, it’s more economical to mine those roots with smallish underground operations.

But even those veins, like the ore hauled out of surface mines, are hardly glittering with rich deposits of gold. Think, Fields says, of microscopic particles that might amount to a tenth of an ounce of gold in every ton of rock that’s hauled to a processing plant.

The need to move tons of rock to get ounces of gold accounts for much of the higher costs of underground mining.

“You cannot move the amount of rock underground that you can from an open pit,” says Alan Coyner, administrator of the state division of minerals.

The costs of building processing facilities everything from crushers to haul roads to power lines means that much of the underground activity is likely to be close to existing surface mines, Fields says.

Another challenge to the industry, the traditional cornerstone of the state’s economy, is finding workers with the skills to handle underground mining.

Mining companies, already struggling to find workers for booming surface mines, advertise in mining towns and industrial centers across the United States. Some such as the operators of the Turquoise Ridge near Winnemucca, are investing heavily like $60,000 a head in training of underground miners.




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