GOLDSTRIKE MINE, Nevada (Reuters) - Kelly Branstrom has worked underground for a dozen years in the most productive gold mine in U.S. history, Barrick Gold Corp’s (ABX.TO) Goldstrike, yet never seen the ore.
“You hope to walk around and find nuggets everywhere,” Branstrom, 41, said at a depth of about 1,000 feet below ground, roughly 100 stories down. “But you don’t normally see ore; it’s so small, it’s microscopic.”
Even if miners at Goldstrike rarely if ever spot gold with their own eyes, they are enjoying booming times in this remote northeastern corner of Nevada with gold prices XAU= nipping at a record $1,000 per ounce. Times are so good, in fact, that mining firms cannot find enough workers.
Thanks to the latest mining techniques that extract microscopic amounts of gold from huge quantities of rock, Barrick produced just under 2 million ounces of gold last year at Goldstrike, and expects between 1.6 million and 1.7 million ounces this year, John Mansanti, Goldstrike’s general manager, said in an interview.
“It’s totally different mining from the days of the 49ers,” he said of California in the mid-19th century. “It’s all microscopic at this point. We are in effect cheating Mother Nature.”
About 1,800 people work at Canadian-headquartered Barrick’s Goldstrike mine, where company officials say an average worker earns $70,000 a year. Around the clock, about 250-275 miners work 12-hour shifts underground, and others dig in vast open pit mines.
Goldstrike has produced about 33 million ounces since it started operations there in 1986, officials say.
The lure of a well-paying job and adventure lured Andrea Ouchi, 28, to move from Canada to nearby Elko, Nevada, to work at Goldstrike a year ago. She is one of few single women working down in mines dominated by middle-aged men.
“I like the work,” she said, wearing a helmet with lamp on top, a belt with an emergency air filter, a reflective vest and thick waterproof boots. “I’ve never been a girly girl. I can take care of myself.”
Mining officials from Barrick, the world’s top gold producer, and other companies wish more such qualified workers were stepping forward in this best of times for gold -- even as other parts of the U.S. economy suffer a slowdown.
“There is an enormous people shortage here. Technicians, craftsmen, blue-collar skilled workers are scarce as March hares out here,” said Llee Chapman, of Denver-based Newmont Mining Corp (NEM.N), the second-largest gold producer, who oversees business services in Nevada.
“Probably finding and retaining the work force is the No. 1 challenge we face, not only because of the demographics but because the work force in the U.S. has changed so much,” Chapman said.
“There was a time ... when we’d have 300-400 people applying for a job and lines outside the building,” he continued. “Today when we post a job we might get 10 applications and nobody standing at the door.”
Barrick Chief Executive Greg Wilkins told the Reuters Global Mining Summit on Wednesday that his work force in North and South America was stable. Still, Barrick faces challenges in the far-flung corners of the world in which it operates and explores for mineral.
“Africa, Tanzania are more difficult because the working conditions are difficult there. So it’s tough to attract and retain people when you can write your own ticket and work anywhere you want. Working in remote and hostile environments makes it difficult. The same can be said in Papua New Guinea.”
“Australia is the worst market for people. The competition for people from base metal companies is fierce,” he said.
Of Chapman’s 3,600 Newmont employees, about a third are within five years of retiring. “We have to find people that like living in small-town America,” he said, referring to a recruiting difficulty.
Newmont mines land near Goldstrike in this obscure corner of the United States. The only scheduled flights arrive from Salt Lake City to Elko (pop. 22,000), an hour’s drive away from the mines. Reno or Salt Lake City are a four-hour drive from Elko.
At Goldstrike, general manager Mansanti said he is about 100 workers short now, with a need for specialists such as technical engineers. He is also concerned about a lack of workers aged 25 to 40 to fill ranks in the years to come.
Another issue facing mines even amid record gold prices is sharply higher costs such as fuel and materials.
“Mining companies are in a consolidate mode, a cut-cost mode. We’re doing the things you think we’d be doing if the price was still $275, ” Chapman of Newmont told Reuters.
Chapman said he was hoping to produce gold for an average of $407 per ounce this year from Newmont’s Carlin trend area in Nevada. The price of gold only went above $600 in April 2006 for the first time in a quarter century.
Huge dump trucks and earth movers also cost millions of dollars apiece. Neal Blaster -- who said he did not change his surname to work at the mines -- was operating a massive P&H 4100 XPC mining shovel at Goldstrike that cost $18 million. He was scooping up 90 tons of rock per scoop at an open pit mine.
“This is like Cadillac versus a Ford,” he said as the air-conditioned operator’s cabin quaked every time he scooped up more rock and dirt.
Barrick expects to shut down Goldstrike’s open pit mining in about eight years, with processing continuing onsite until between 2020 and 2023.
Glenn Miller, a professor of natural resources and environmental science at the University of Nevada, Reno, is concerned about the lasting environmental impact when Goldstrike closes for good.
“We still don’t know how to close large mines,” he said. “What they have done is take 8, 10, 12,000 acres and put it out of use for perpetuity.”
Editing by Matthew Lewis