Nevada mines striking gold
CARSON CITY — With gold and silver prices climbing to 25-year highs, Nevada mines produced minerals worth a record $4.9 billion in 2006, according to a newly released report from the state Division of Minerals.
About $3.8 billion of the value came from gold sales.
Gold prices averaged $603 an ounce in 2006, the highest since 1981. The price of gold has continued to increase in 2007. Despite dropping $26.70 on Monday, spot gold closed at nearly $806 an ounce.
In the report, Alan Coyner and Doug Driesner, top-ranking Minerals Division officials, said Nevada had known reserves of 84.2 million ounces of gold at the end of 2006. Companies in the state spent $165 million during the year — the highest in 11 years — to find additional gold.
“Under current conditions, the existing proven reserves are sufficient to sustain gold production at current levels for about 13 years,” Coyner and Driesner said.
In a recent report for the Nevada Mining Association, John Dobra, a University of Nevada, Reno professor, said the primary reason for the increase in gold has been the “steadily declining value of the U.S. dollar” relative to the euro and other currencies.
Dobra said gold values also have been climbing because of the demand from China and India, whose economies have been booming.
He also cited a major demand for gold among people in the Middle East, where surplus revenue has been created by rising oil prices.
During 2006, Nevada mines produced 6.3 million ounces of gold, 8.5 million ounces of silver and 127.6 million pounds of copper.
Gold prices have steadily increased since 2001, when an ounce sold for an average of $271.
Nevada mines produce 81 percent of the gold in the United States.
Silver prices also have been increasing, selling for $11.55 per ounce in 2006, up from $7.32 in 2005. Silver was selling for $14.70 per ounce Monday.
Copper prices fell to three-month lows Monday due to concern about a drop in demand for the commodity in China.
Still, copper was selling for more than $3 a pound, compared with less than 50 cents a pound four years ago.
According to the state report, employees in Nevada’s minerals industry earned an average annual pay of $69,387 in 2006, the highest income of any employment sector in Nevada. About 11,516 people worked for the mining industry in the year.
Besides the key minerals, Nevada companies also mine sand, gravel and crushed stone, along with industrial minerals such as barite, gypsum, limestone and magnesite.
The state also has a tiny oil industry. Oil wells produced 426,000 barrels during the year. Production of oil, however, has been on a decline since 1989 when 4 million barrels of oil were produced in Nevada.
Contact Capital Bureau Chief Ed Vogel at evogel@reviewjournal.com or (775) 687-3901.
