Victoria Geologist Quoted
To hear Steve enders talk about it, the goldmining
industry is in a dickensian period
right now.
“it’s the best of times and the worst of
times,” the vice president of worldwide exploration
for denver-based Newmont Mining
Corporation says, paraphrasing dickens’
opening lines of A Tale of Two Cities.
Newmont operates several gold mines in
Nevada, which, even though it’s only a state,
ranks as the world’s fourth-largest producer of
gold after South africa, australia and China.
What makes this the best of times for gold
mining is obvious enough: the price of gold.
By Nov. , it had climbed above $600 an ounce,
more than double the price of five years ago.
On the down side, oil and gas prices have
also skyrocketed in recent years, and energy
costs make up 25 percent of Newmont’s costs.
That erodes profits.
So does higher salaries. labor accounts for
40 percent of expenses, enders says, and labor
costs in the mining industry have been rising
along with commodities prices.
Here’s why: When the price of a commodity
like gold rises high enough, it becomes
economical to go after
more-difficult-to-extract
deposits. But
more exploration and
production requires more labor. and when job
openings exceed qualified workers, as is the
case right now, companies bid up salaries to
attract or keep employees.
That makes this one of the best times to be
a geologist.
and one of the worst times to be running a
graduate program in geology.
“i’m having a hard time keeping my grad
students,” says Tommy Thompson, director of
the roberts Center for research in economic
Geology, part of the department of Geological
Sciences and engineering in the university
of Nevada, reno’s Mackay School of earth
Sciences and engineering. economic geologists
prospect for valuable minerals and then
determine if there’s enough of the material to
make it economically feasible to mine.
Thompson said last fall he’d heard that
entry-level economic geologists, those with
graduate education, were being offered salaries
of $65,000 to $70,000 a year with $ 0,000 signing
bonuses and relocation costs.
That kind of money proved too appealing
to pass up for one of his master’s students and
one doctoral student. Their departures last
winter left the program with four master’s and
four doctoral students, he said.
This situation is nothing new for the mining
industry, which is notorious for its cyclical boomand-
bust periods. during booms, the graduate
programs starve for students. during busts, when
companies are looking to cut payrolls, many
geologists and other scientists enroll (or re-enroll)
in graduate school, hoping an advanced degree
will translate into a better job when prices recover
and the companies are hiring again.
Marcus Johnston ’03Ph.d. (geology) found
himself in a bust period as he was nearing the
end of his doctoral studies in economic geology
in 2000. Gold prices lingered below $300
an ounce, and job prospects were few. When
Newmont offered him a position, he figured
he couldn’t ask the company to wait until he’d
finished writing his dissertation. So he took
the job and ended up with the unenviable task
of writing a dissertation while working full
time and also starting a family.
Three years later, with gold having risen
above $400 an ounce, he left Newmont to
become project manager for a small or “junior”
Canadian mining exploration company,
victoria resources uS inc., that was working
in Nevada. The firm contracts with larger
production companies like Newmont.
“We find it, they mine it” is how he describes
the business model of his outfit, which
has about 0 employees based in reno.
Johnston marvels at how the job market has
changed since he left school.
“Six years ago when i went to work for
Newmont, i had five years of graduate school
and i was almost done with a Ph.d. and i made
$43,000 a year. right now we’re paying people
with zero experience and a bachelor’s degree
$50,000-plus.”
unlike larger mining companies, juniors
like victoria resources often offer stock
options to employees. That way, when the company
makes a big find, employees can share
more directly in the bonanza. Johnston says
a student who was finishing up his master’s
at the university when he was completing his
doctoral studies took a job in Mexico after
graduation and, two successful years later, his
options were worth more than $ .5 million.
even with all those perks, however, many
geoscientist jobs are going unfilled in the mining
industry, says Jon Price, state geologist and
director of the Nevada Bureau of Mines and
Geology.
“There just are not enough people available
who can do the jobs.”
Traditionally, the best source of available
geologists was recent college graduates. But undergraduate
enrollment in the geosciences has
yet to recover from a steep decline that began
in the mid- 980s. according to elizabeth Ball
’97M.a., the Mackay School’s coordinator of
student services, the number of undergraduates
in geological sciences has started to climb
only in the last two years. leigh Freeman,
general manager of downing Teal inc., one of
On campus or around town, Wolf Pack
pride never goes out of style.
the largest personnel recruiters for the mining
industry, has said that the 3 remaining mining
programs in the united States are graduating a
total of about 00 students a year. But the mining
industry will need three times that many
over the next several years, he says.
That dearth of new talent leaves companies
few alternatives when it comes to recruitment.
“Turnover is high right now,” says Newmont’s
enders. “There’s a pretty sinister trend
going on in industry, which is poaching each
other’s employees, which, in my opinion, is an
unsustainable practice.”
enders says a more practical solution is to
attract new people into the mining professions
and train them. in line with that philosophy,
Newmont has pledged $2.5 million to Mackay
over the past five years to support scholarships,
professorships and programs.
The shortage of geologists doesn’t figure to
last forever because commodity prices inevitably
fall when production expands in response
to high prices. enders says price cycles typically
last five to seven years in the gold-mining
business, and the industry is four years into
the current cycle. Optimists believe this boom
could be longer because it’s being driven, in
large part, by demand for all kinds of minerals
to feed explosive manufacturing growth in
places like China and india.
a longer expansion, however, could only
compound the industry’s labor woes. ed Cope,
vice president exploration-uSa for Barrick
Gold Corporation, the world’s largest gold
mining company, says Barrick’s exploration
division, based in elko, has been aggressively
recruiting lately but still has some openings.
He’s more concerned with the future of the
organization. That’s because almost all of the
54 geoscientists employed by Barrick in elko
are in the 40-55 age range with only a few
geologists as young as 30.
Says Cope, “The question of where we’re
going to be in five years is more critical than
where we are today.” nn
Nevada Silver & Blue • Winter 2007
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