Mining’s future raises questions about Elko’s growth
As State Demographer Jeff Hardcastle prepared his estimates of Nevada’s population growth for the next two decades, few questions were as challenging as the number of people likely to be working in the mining industry.
Despite progress on diversification of the economy of Elko County and other communities in the state’s mining belt, their population growth remains closely linked to the future of the mining industry, says Hardcastle.
And the future of mining employment in the state depends on two big imponderables:
First, what’s going to happen with the price of gold over the next 20 years?
Second, how much more efficient will mining companies become in their search for gold and in their extraction techniques?
Anyone who’s been paying attention in the past three years has seen the effects of higher gold prices on employment in the region.
As the price of gold moved from an annual average price of $1,224 an ounce in 2010 to an annual average of $1,832 in 2012, employment in the mining industry in Elko County grew by 71 percent.
Mining jobs in Elko County numbered more than 3,600 last year.
But the decline in gold prices this year already has begun affecting employment in the area.
The state estimates that mining employment in Elko County has slipped by about 100 jobs this year. Lander County has seen a similar slippage.
But a bigger question may be the productivity of the mining sector.
In preparing his annual estimates of population growth that were released this month, Hardcastle relied on a complex, sophisticated forecasting software developed by Regional Economic Models Inc.
The company headquartered at Amherst, Mass., expects that productivity in mining will rise sharply. That means that fewer mining professionals would be needed even if production remains stable.
The modeling firm expects productivity to rise so sharply, in fact, that its computer-generated projections estimate that mining employment in Nevada could fall as low as 4,000 jobs by 2032, compared with today’s total of 14,000.
“It shows the mining sector, over time, tanking,” says Hardcastle.
But the Nevada demographer is skeptical of those estimates.
He doesn’t see those sorts of productivity gains as likely in the mining industry. (He thinks that the high-level estimates developed by Regional Economic Models Inc. may be based on recent productivity improvement in the petroleum business — frakking-related gains, mostly — and he thinks the analysts are applying the same gains to the mining business.)
And even if the state’s gold-mining industry loses employment to falling prices and higher productivity, Hardcastle says it’s possible that the petroleum industry or other minerals production could take up some of the slack.
Houston’s Noble Energy, for instance, is running a good-sized oil and gas exploration program in the Elko and Ely areas this year.
So Hardcastle’s most recent projects estimate that mining employment will remain flat during the next three years. After that, he estimates that the industry’s employment will decline to about 11,000 — a figure that’s based on its average employment in Nevada between 1990 and 2012.
Using that number, he estimates that the population of Elko County will grow to 55,192 in 2032 compared with roughly 52,000 today.
The population of Humboldt County is projected to decline slightly to 16,775 from today’s 17,600. Lander County’s population is projected to fall to 5,100 from today’s 6,300, Pershing County is project to lose about 500 people from today’s population of 7,000, and White Pine County is projected to loss about 900 people from today’s 10,100.
While fluctuations in mining employment drive most of the changes in population in those counties, Hardcastle notes that gaming also plays a role, particularly in communities such as Wendover and Jackpot.
And he projects some modest growth in other employment — notably, administrative services — in the Elko area over the next two decades.
Amid slow vaccine rollout, will retail real estate in Reno-Sparks see return to ‘normal’ by the summer?
Sales of retail properties across Northern Nevada lagged after the initial wave of state-mandated closures last spring since it was impossible to underwrite the rental income generated from cash-strapped tenants. Investors, however, have cautiously been dipping their toes back into the pond.