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October 31, 2014

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Mining pays its share of taxes

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Mining always has been committed to fostering a healthy Nevada economy and supporting the state in which we operate. We have grown as an industry and now contribute more than $417 million in state and local taxes to support essential services such as education and safety. We provide thousands of the state’s highest-paying jobs and invest billions to develop new projects.

In 2011, mining’s share of the taxes paid by all Nevada businesses was $171.4 million. In addition, we paid a $245.8 million mining tax (Net Proceeds of Minerals Tax) — a tax no other Nevada business is required to pay.

While most sectors of the economy have seen decreases in tax contributions, ours have more than doubled in the past three years. Furthermore, our per-employee tax contributions of $24,000 are four times the state average of $6,000. Mining is Nevada’s eighth-largest industry but supports a portion of the general fund that is twice our economic footprint.

Mining’s growth in recent years is a perfect example of how an industry can thrive and support Nevada even during tough economic times. Since the recession ended in June 2009, mining has added 1 out of every 3 jobs in the state.

Because modern mining is a highly technical process, we must employ a well-educated workforce to operate advanced technology on the mine site. As a result, mining pays the highest average salaries in the state at more than $87,000, including full benefits.

In addition, the industry now supports more than 2,300 Nevada-based businesses through our constantly growing supply chain.

Our continued growth requires long-term investment in developing new technologies to extend the life of our mines and to explore for new mineral resources. In 2011, mining’s in-state investment to discover new ore bodies and develop new projects totaled more than $1.6 billion.

This investment creates jobs, provides economic development to communities and generates sales taxes and induced spending throughout the supply chain. For example, $3 billion will be spent developing the Long Canyon project from when exploration began in 2005 by New West Gold to when Newmont Mining will extract the first ounce in 2017.

When it is fully operational, that project anticipates employing several hundred Nevadans.

Mining has always been there to work with both the governor and Legislature to craft sound policies for our state. We were there in 2011 when mining’s taxes increased by $48 million. We were there in 2010 when we helped balance the budget. We were there in 2009 when we agreed to prepay our taxes at the beginning of each fiscal year to assist with cash flow. We were there in 1989 when the rates were raised on the Net Proceeds of Minerals Tax, and we’ll be here again in 2013 to help devise solutions to address fiscal issues in a manner that does not inhibit the future prosperity of the state.

Tim Crowley is president of the Nevada Mining Association.

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  1. MINING has enjoyed "favored status" for over a century, since writing the MINING laws into the Nevada State Constitution. NONrenewable minerals have been extracted from Nevada and taken out of the state, even out of the country, for a pittance, where mining pays other states far more for what it takes. Nevada's infrastructure has long been suffering,with the mining barons living the high life out of state, and having their legions of lobbyists influence any and every person who deals with mining in any way, shape, or form.

    Commenter NVFisherman expressed his take on mining with, "A pretty bad PR piece. The fact remains that the royalties the mining industries pays are a joke. Look at what the royalties the mining companies pay to various regions of Australia. The mining companies which are largely owned by foreign interests can easily afford to pay more..a lot more."

    Many of those working in the mining industry are outsiders, and they are making the nice compensation figures. Where the mining stops, they pull up stakes and move back to their "real homes" in other states or countries. Sure, you have a few locals driving haulers, delivering fuel and goods at lower wages, then their jobs disappear when mining stops. Then what? It is a boom and bust industry, and it pays a pittance back to the State of Nevada and its People in return for the wealth it exploits.

    As the previous Governor Bob Miller long ago stated, "Mining does not pay its fair share," way back in 1989. It never has, anyway you cut it.

    So quit the lies and propaganda, mining. The People of Nevada have heard enough.

    Blessings and Peace,
    Star

  2. It's interesting that Mr Crowley should use 2011 in talking about gold taxes. That was the year gold reached an all-time high price - in September it was $1921/oz. Today it is $1592, an 18% drop in a year and a half. Yes, mining creates job, but hardly even semi-permanent ones, mining is notorious for its boom/bust cycles - sometimes with just 2-3 years between a peak and a bottom. Nevada must set its taxes at a point that will not only cover current expenses during a boom, but also cover future expenses for cleaning up after the boom moves on. It's almost impossible to find a house in Elko, today. Who will pay to remove all the new construction once Newmont, Barrick, and the others move on? Those of us who are actually permanent residents? Just as we're now paying to clean up a century of mining's abuses?

  3. According to the Reno Gazette Journal Mar 5 2013, the taxes paid represent only 2.3% of gross proceeds:

    "In 2011, Nevada's gold mining industry produced approximately $8.8 billion in gross revenue, Republicans said. On this revenue, $97 million was paid to the state's general fund in net proceeds, along with another $106 million paid to local government in net proceeds. This totals approximately 2.3% of gross revenues, Republicans said."

    "In contrast, Nevada's gaming industry in 2012 produced $10.8 billion in gross revenues and paid $694 million. This amounts to 6.6% of gross revenues. The top-tier tax rate is 6.75% of gross gaming revenues."

    If the gaming industry pays around 6.6% of their gross revenues, thats about 3X more than mining - and Nevada's gaming industry pays only HALF of National averages. The top-tier tax rate for mining is no where near gaming.

    The overwhelming bulk of the mining proceeds go to Canada and other foreign countries. Canada (Barrick, Ontario) AND Australia (Rio Tinto) HAVE universal health care - thanks in part to Nevada mineral resources.

    And I pay $1700 a year in property taxes on a house that has a negative value of $46,000, that much less than what it cost 10 years ago.

    So thank you, Nevada Mining for all your concern! I'm certain there will be empty pits, rotting carcasses of birds and fish in stagnant water ponds, and no footprints left behind when the minerals run out. So Corporations are people? Not when it comes to taxation.