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Elko, Nev., takes the gold boom with a grain of doubt

Mining firms are hiring, but the city government, and even mine employees, are wary. Only a decade ago, tanking gold prices saddled the region with abandoned homes and tarnished dreams.

September 20, 2011|By Ashley Powers, Los Angeles Times
  • Construction is underway at the Rabbit Brush Run apartment complex in Elko, Nev. The city faces a severe housing shortage because of the gold mining boom.
Construction is underway at the Rabbit Brush Run apartment complex in Elko,… (Elko Daily Free Press, Ross…)

Reporting from Elko, Nev. — This far-flung capital of Nevada's Gold Belt is booming — very, very reluctantly.

With the price of gold in the stratosphere, the mine-chiseled corner of northeastern Nevada is scrambling to fill thousands of jobs, while newcomers to the barren region beg for somewhere to sleep. The motels: sold out. The apartments: good luck. The RV parks: get in line.

Nevada churns out more gold than all but four nations. The Elko area's 7.4% jobless rate is about half that of the once-thriving Las Vegas region.

But you'll find little of the gold-rush euphoria here that has long defined the American West. These days, Elko knows better.

Nevada is stippled with so many mining camp ruins — more than 100 in Elko County alone, locals say — that "ghost-towning" is a weekend pastime. Only a decade ago, tanking gold prices saddled the region with abandoned homes and shredded dreams.

Now the Elko city government is mostly socking away cash and putting off hiring, even for a police force strained by a transient population. Even among workers who feel blessed to cash paychecks, there is a sense of unease. Why buy a home here if the gold rush could vanish tomorrow?

That feeling is palpable at the Iron Horse RV Resort, where Ron and Judy Fletcher have been parked in Lot 70 for more than a year, ever since Ron's company told him: Move to Elko. Now.

Ron, 67, sells pump seals to mines. So the Fletchers squeezed their lives into an RV and motored from Spokane, Wash., to this mountain-ringed swath of cattle, alfalfa and cowboy poetry enthusiasts.

"This is where the work is," Judy, 61, said inside their 38-foot trailer, their black poodle-Chihuahua mix, Izzy, sprawled on her lap. "As much as we don't want to be here, we want to be employed."

A city born as a transportation hub in the 1860s and possibly named by a railroad official with a fondness for elk, Elko has survived a roller-coaster history. Its fortunes are tied to the seesaw industries of mining, ranching and tourism, though gold is clearly king.

Elko serves as the center of Nevada's mining industry, which churned out 5.34 million ounces of gold last year valued at $6.54 billion. It's not unusual to see yellow-flagged mining vehicles puttering around town and bumper stickers that taunt: "Earth First — We'll Strip Mine the Other Planets Later."

"If you work in Elko and don't think you work for the mines, you're crazy," said developer Pedro Ormaza, who grew up here. "The mines bring people here."

Because of its isolation — Salt Lake City, the closest big city, is 230 miles of scrub brush away — Elko has struggled to lure much else. "The federal government owns 90% of this land, and most of it is useless for anything except weapons testing and poison-gas experiments," scoffed Hunter S. Thompson in his essay "Fear and Loathing in Elko."

Still, Elko is widely admired for its Wild West charm. Its downtown includes a custom saddle shop, Basque restaurants and a casino whose mascot is a stuffed polar bear named White King. There's also a legal brothel in a residential neighborhood whose neon sign promises "dancing and diddling."

After 1980, when the average annual gold price more than doubled to $615 an ounce and new technology lowered processing costs, so many people streamed into Elko that some camped in a gulch and showered at a truck stop. The county population soared from about 23,000 in 1986 to 44,000 a decade later. Onetime ranchland whirred with home and apartment construction, while the school district rolled in temporary classrooms to cope with all the new pupils.

But by the late '90s, gold prices had sagged to about $300 an ounce, less than the cost of extracting the metal. The mine workforces shrunk, as did local government payrolls.

Gold eventually rebounded — from 2009 to 2010, its average annual price jumped 26%, to $1,225 an ounce — partly because of global economic jitters. Investors view gold as a safe haven when there is uncertainty in the financial markets. Lately, it has topped $1,800 an ounce.

That explains why the state's two major mining companies, Barrick Gold and Newmont Mining, are poised to hire hundreds of people in the coming years, economic development officials said. That's in addition to the 12,000 or so engineers, geologists and other workers employed in mining statewide, who make an average salary of $83,000, according to the Nevada Mining Assn.

When the Las Vegas economy was flourishing in the 1990s and early 2000s, governments binged on new city halls, developers on gated cul-de-sacs and casinos on multibillion-dollar expansions.

But in Elko, the bust-time prudence has mostly lingered. Construction is modest — a new Ross clothing store is the talk of the town — partly because developers are hard-pressed to get loans.

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