Jan. 2, 2009
A Nevada Town
Escapes the Slump, Thanks to Gold
By Steve Friess
BATTLE MOUNTAIN, Nev. — Hundreds
of revelers crammed into this small town’s community center
on a recent Saturday night to celebrate the marriage of Bianca
Hernandez and Jose Lomeli.
Throngs danced to Spanish folk
music well into the wee hours. Beer, wine and laughter were
abundant, and several tables were piled high with gifts. “It’s
not just the wedding,” said a friend of the newlyweds, Jesse
Dias, 34. “Times are good around here. People are happy.”
Good times? Happy people? Hasn’t word
of the national economic anxiety and resultant austerity made
it to this remote high-desert capital of Lander County, 215
miles east of Reno?
Throngs danced to Spanish folk music well
into the wee hours. Beer, wine and laughter were abundant, and
several tables were piled high with gifts. “It’s not just the
wedding,” said a friend of the newlyweds, Jesse Dias, 34. “Times
are good around here. People are happy.”
Yes, it has, but the economic meltdown
in much of the country has been a boon to the county and its
5,000 residents, 4,000 of whom live in the Battle Mountain area.
The reason: They mine gold in Lander
County, a mineral-rich area that is a major reason Nevada, nicknamed
the Silver State, is also the world’s fourth biggest producer
of gold.
And when the broader economy declines
and the value of the dollar fluctuates, people buy gold. At
current prices — gold hit $892 an ounce on Monday, its highest
price in three months and not that far off its record high of
more than $1,000 an ounce in March — places like Battle Mountain
hum with good-paying jobs and rising home values, making the
financial woes of the rest of the country a distant concern.
“I don’t know of anybody who
is getting foreclosed on; it’s just not something that’s an
issue out here,” Charlotte Thompson, 56, said, shrugging as
she seated diners on a frigid, wind-swept evening at the Owl
Club Casino and Restaurant, the main attraction of Battle Mountain’s
four-block main thoroughfare, Front Street. “That’s the way
it usually goes, though. We’re always opposite of the rest of
the country.”
To grasp how anomalous Battle
Mountain is now, consider the data. Home foreclosures, as Ms.
Thompson noted, are unheard of here, even though November was
the 23rd consecutive month that Nevada had the nation’s highest
foreclosure rate.
Unemployment in Lander County
was 4.8 percent in November, while the statewide rate of 8 percent
was the state’s highest since 1984. Two goldless counties bordering
Lander, Nye and Pershing, had unemployment rates in November
of 10.5 percent and 8 percent, respectively.
Even with annual salaries for
average mining jobs starting at more than $60,000, the two largest
mining companies in the area, Barrick and Newmont, cannot find
enough qualified workers to fully staff their operations round-the-clock.
Mr. Dias, the friend of the newlyweds, is working six days a
week.
Robert Perry, a shift supervisor
at Barrick’s Pipeline Mine, a 12-year-old facility near Battle
Mountain that yields about a million ounces of gold a year and
is expected to continue to produce until 2014, said the mine
was always interviewing and hiring people.
“Our housing market, I would
say, is better than most, just because there are jobs around
here,” Mr. Perry said. “My house I bought five years ago for
$134,000, and right now it’s worth about $300,000.”
The gold-mining business is
doing so well that industry lobbyists did not complain when
the Nevada Legislature passed a measure in early December requiring
mining companies to pay $28 million in 2009 taxes early to help
the state patch a $340-million shortfall in revenue.
And Barrick is set to spend
nearly $500 million to open a new mine near Pipeline, provided
it wins a legal challenge by the Western Shoshone Indians, who
assert that the mine would disturb the tribe’s most sacred religious
site.
“In tough times, people need
a backup for their money, and that backup is gold,” said Omar
Jabara, a spokesman for the Newmont Mining Corporation, which
operates eight Nevada mines that yielded 2.3 million ounces
of gold in 2007.
Battle Mountain residents are
clearly enjoying the upswing, just as they clearly suffered
through the high-tech boom of the late 1990s that brought prosperity
to much of the rest of the nation. During that time, gold fell
to about $215 an ounce, the local economy was moribund and several
mines laid off workers. The Owl closed for four years, during
which Ms. Thompson worked as a truck driver.
“We went 11 years without a
new business really opening up here, but now we’re getting a
new furniture store, and there are some new commercial businesses
opening that are mining-related,” said Sarah Burkhart, director
of the Battle Mountain Chamber of Commerce. “We’re getting a
Family Dollar, and that’s kind of a biggie for us because it’s
like a mini-Wal-Mart.” (The nearest Wal-Mart is about 50 miles
away in Winnemucca.)
These signs of prosperity are
especially gratifying to residents who took umbrage at a 7,000-word
cover article in The Washington Post Magazine in December 2001
in which the writer, Gene Weingarten, went searching for the
“armpit of America,” and found it in Battle Mountain. Some town
boosters, like Ms. Burkhart, used the national notoriety to
organize three annual Armpit Festivals, sponsored by the deodorant-maker
Old Spice, but others were insulted by the article and glad
when the festivals were abandoned.
“I think we ought to have a
little more pride than that,” said Kimberlie Davis, owner of
Sage Homes, a company here that builds about 25 homes a year
in Lander and neighboring counties. “If that’s all we have to
market, then don’t market it.”
There is so little to see in
Battle Mountain that the state’s promotional map, Nevada Wide
Open, designed to generate interest in tourism in the sparser,
less-known regions of the state, does not highlight it. The
town has no traffic lights. Besides two small casinos and one
legal brothel that caters almost exclusively to truckers who
crisscross the nation on Interstate 80, there is a pizza place,
a coffee shop, a McDonald’s and a Super 8 motel.
“Oh, we’ll drive 75 miles to
go get Chinese food,” said Ms. Davis, 39, who moved here from
Portland, Ore., in 1989 after visiting a childhood friend who
had come here to be with her miner boyfriend. “If you’re going
to the movies, that’s 55 miles. It’s an event. You make a big
deal out of it. You give up conveniences of the big urban areas
for a great deal of safety and comfort and a really nice place
to raise your families.”
The town’s isolation and its
dominant, blue-collar industry propel many of its disaffected
young people to pursue college degrees.
“It’s too small — there’s not
enough opportunity as there is in a big city,” said Ed Figueroa,
20, home for a holiday visit from the University of Nevada at
Reno, where he is studying international business administration.
“There’s nothing to do here. All our parents work at mines.
I like to come back and see friends, but the town itself is
... whatever, you know?”
Both Ms. Davis and Ms. Burkhart
shrugged off such statements, citing numerous examples of Battle
Mountain natives who do return, as Ms. Davis noted, “after they
swear they never will.”
Most everyone here is concerned
that a national economic recovery could drive gold prices down
again. A Barrick spokesman, Louis A. Schack, agreed that it
was a danger, but he noted that in the decade since the last
major slump, gold had become a staple as an electrical conductor
in things like cellphones and most high-tech wiring, boosting
its value considerably.
Yet Mr. Schack acknowledged
that commodity markets were unpredictable, so Ms. Davis and
the rest of Battle Mountain know that slow times could return
and are determined to enjoy their good fortune while it lasts.
“It’s a very unique economy
that exists out here,” Ms. Davis said. “I don’t want the national
economy to be awful by any stretch. I like a happy medium. There
is a point when everything’s even, when it’s good here and good
everywhere else, too, but it’s very short lived.
“More than likely, gold’s going
to devalue and the cycle will start all over again.”
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