New mining commission gathers input at first meeting

A new state commission cleared its throat on Tuesday, but it remains to be seen what it will have to say about taxing and regulating the Silver State's namesake industry.

The Mining Oversight and Accountability Commission took care of some housekeeping business, listened to background briefings and gathered public input during its first-ever meeting, which was conducted by video link from Carson City, Las Vegas, Elko and Winnemucca.

Commission members are expected to oversee all state regulation of mining, including taxation, worker safety and environmental rules.

The seven-member panel was created by lawmakers earlier this year after it was revealed that state taxation officials had not conducted field audits at Nevada mines for at least two years and lacked trained staff to do so.

In one of the first reports to the commission, Chris Nielsen, deputy director of the Nevada Department of Taxation, said work is under way to get the auditing program back on track.

Every mine operator in the state has been notified to expect a field audit in the coming months, with the first wave aimed at the state's largest operator, Toronto-based Barrick Gold Corp.

Newmont Mining Corp., based in Denver, is the state's second-largest operator and will be next in line for financial review.

Nielsen said results of those field audits are expected by mid-2012.

Based on public input at Tuesday's inaugural meeting, some expect the commission to provide more than oversight.

Several people called on commission members to use the new platform to push for tighter restrictions and higher taxes on the industry.

One audience member said Nevada's century-old mining laws now serve to protect the profits of international corporations that "rape" the state's resources and give too little in return.

Another audience member encouraged the commission to consider a Nevada version of the Alaska Permanent Fund, which collects proceeds from oil and mineral production and distributes dividends to residents of that state.

Arguably the commission's best-known member is also one of its most outspoken critics of the mining industry.

State Sen. Steven Horsford, a Las Vegas Democrat and candidate for Nevada's 4th Congressional District, said he nominated himself for the new panel because of his experience in the Legislature and his work to close tax loopholes exploited by mining companies.

In an interview shortly after Gov. Brian Sandoval officially named him to the commission, Horsford said this year's legislative session opened his eyes to all the perks and protections mining enjoys in Nevada.

"After I started peeling back the onion, it made me want to cry, but it also stunk up the place," he said.

This year's session in Carson City proved to be one of the most punishing for the mining industry in decades.

Lawmakers took away several of the industry's historic tax deductions and struck down an 1875 law that gave mining companies the power to condemn private property.

They also gave preliminary approval to a measure that would write the mining industry out of the Nevada Constitution, ending what some lawmakers consider outdated protections that make it impossible to get more tax revenue from mines now booming because of record gold prices.

The measure, known as Senate Joint Resolution 15, will be taken up again by the Legislature in 2013. If it passes a second time, it will be up to voters to decide whether to strike the constitutional limit on mining tax rates.

The Associated Press contributed to this report. Contact reporter Henry Brean at hbrean@reviewjournal.com or 702-383-0350.

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Comments

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1. deacon427 Jan. 4, 2012 | 7:18 a.m. Report Abuse

   Tanker has it right. The mining industry is getting away with murder and has been since the state was founded. Geex Governor and Legislature wake up and smell the coffee, because I assure you that if this lately thing with the mining commission does not do what it is suppose to do and put an end to this ridiculous outrageous theft that the mining industry is perpetrating on the people of Nevada, then your little touches are going to be toast, and you can take that to the bank! Regulations have just been past, but they do not go even far enough, they are a start, but a weak one. You need to do better! You can do better and we all know it, the question is will you? The legialatures up till now have been an embarrassment and things need to change or the people are going to throw all of your touches out the door and start over. Here is a start. Governor Sandoval please resign. Any one in the legislature more then one term please resign. Masto, please resign. Ross Miller you are a joke, please resign. There are also agency heads that need to resign, but you should know who you are because you have been ineffective. Lets get on with running this state the right way. Do what needs to be done, but don't throw the baby out with the bath water, Taxes and cuts need to go hand in hand. Be smart.

2. TankerUSMA1975 Dec. 21, 2011 | 9:21 p.m. Report Abuse

   In 2009, the mining industry had gross revenue of 5.8 BILLION. After deductions, including some that may have not complied with state law the net profit was 1.8 BILLION. The tax paid to the state of Nevada was 48.6 MILLION. The state of Alaska collects a royalty of 25% on oil. Alaska currently has a 3 BILLION surplus in the state budget, and Exxon just reported record 1st quarter profits of over 10 BILLION, so the royalty payment doesn't seem to be causing the oil companies financial problems. In contrast, the gaming industry had gross revenue of 5.8 BILLION in 2010, and paid 426 MILLION in taxes. Yes, almost 10 times what mining paid on similar revenue.
   
   In 2010, the Cortez Hill mine, owned by Barrick Mining, in Northern Nevada produced 1.14 MILLION ounces (31.6 TONS) of gold at a cost of $312 per ounce. In the first quarter of 2011, the mine produced 366000 ounces (11.4 TONS) at a cost of $220 per ounce. Nevada is one of the largest gold producing areas in the world. The current price for gold is approximately $1800 per ounce. If you assume a profit of $1000 per ounce, that amounts to a profit of $366,000,000 for one quarter for one mine. From that profit, it is likely that Nevada will get less than $10,000,000. Two companies are in the process of opening new mines in the old Comstock Lode and the Carlin Trace.

3. Paul.Rupp Dec. 21, 2011 | 9:02 a.m. Report Abuse

   It is time for a change at NV MSATS. Sandoval has received formal complaints for safety, health and harassment violations in the NV Mining industry @ RMGC in Central NV. NRS 512.200> "Workers may request inspection of mine; conditions". "any worker or a representative of the workers, if any, has reasonable grounds to believe that a violation of a health or safety regulation or standard exists" NV miners and citizens know the field is not level or fair. A cab fire in a moving haul truck and removing and repairing defective parts as required by statue does not require unlawful termination AND requires more than a token phone call to the offending mine by C.A.O. of NV MSATS, that is what this miner who file formal valid timely complaints received from MSHA AND NV MSATS!!!
   Inspection REQUIRES investigation and inspection of the RECORD, not an unlawful sham token phone call? How long does a miner in NV have to wait for a formal complaint too be investigated? PRupp SP NV 89047

4. deacon427 Dec. 21, 2011 | 7:38 a.m. Report Abuse

   Let me see are the voters and legislature going to pass SJR15 a second time...? I think sooooo. Come on the mining industry has gotten away with murder for over a 100 years, I think their time is about due for a reality check. Eliminate all deductions from the net proceeds so it just becomes a tax on the proceeds. If you do that then you might not havr to raise the rate. This commission had better really do some work and make come changes or they will themselves on the outside looking in because the people will not stand for the pulling of the wool over their eyes this time nor on this issue. Horsford, you had better be talking real game here buddy or you butt will be toast! Those that know know how ridiculous the whole mining thing has been for years. You want to know why the taxation department didn't audit for 2 years? IT was not because we did not have qualified people. It was because the man in charge knew there was not much to get there because the deductions for the net proceeds made it so the mining companies got away with murder, and there was nothing there to get. People have known this for years, and the legislature and the Governor's office looked shocked and surprised at the whole thing....what a joke! Everybody and his brother in Carson City knew what the real deal was, and they went along because the mining industry bought off enough people to make it stay this way. How naive can you be Horsford and Sandoval, and how stupid do you think the people of Nevada are that they will stand around and let this continue. Not any more Brother! Time has come, and the dogs have been released and the mining companies had better watch out, their goose is cooked. About time.