Construction of Thacker Pass, the largest known lithium resource and reserve in the world, is expected to employ close to 2,000 people who will largely live, recreate and spend money in rural Humboldt County, where about 17,000 people live now.

At its peak, the planned buildout of Rhyolite Ridge mine will employ several hundred people, substantially increasing the population of Esmeralda County. With less than 800 residents, it is Nevada’s most sparsely populated county.  

While the coming large-scale lithium mines and their future employees will bring revenue and jobs to rural Nevada communities hungry for an economic jolt, they’ll also bring growing pains. Rural counties will be on the hook to come up with the money to fund critical infrastructure and other expenses — but, with proceeds from the mines not reaching the counties until production is underway, those same counties have limited ways to prepare or pay for expenses in advance.

“It’s not just ‘not in my backyard’ — it’s [that] the mine is bringing these issues we didn’t have before, but we don’t have the resources to deal with them,” said Susan Frey, a member of Thacker Pass Concerned Citizens and Thacker Pass Working Group. “We’re beholden to the mine to address them.”

The companies behind Thacker Pass and Rhyolite Ridge are taking steps to address those greater community needs, spokespeople for the companies say — in Humboldt County, a new school will be built; around Rhyolite Ridge, mine owners will pay for additional law enforcement and emergency response personnel. 

“We committed to build it and are moving forward with it,” Tim Crowley, Lithium Americas’ vice president of government and external affairs, said of the new school. 

Expecting rural communities with small tax bases to fund infrastructure needs brought on by large-scale development isn’t new — historically, developers built mines where it suited them, with or without community buy-in. 

But now, there’s an expectation of a social contract between mines and their communities, said Mark Haggerty, senior fellow for energy and environment at the left-leaning Center for American Progress (CAP). Those benefits, he added, need to extend beyond addressing just infrastructure needs that facilitate development to include initiatives, such as enhanced broadband, that provide long-lasting benefits to the community beyond the lifespan of the mine.

“The mining company is going to come to extract something of value, and in exchange, they need to make sure the community receives tangible benefits and the environment is protected,” Haggerty said. 

Economic benefits from the mines 

In tiny Esmeralda County, there are no cities, nor is there a county manager. It can take the county’s few law enforcement personnel an hour and a half one way to respond to an emergency. 

That rural county is where Rhyolite Ridge, a lithium-boron mine that has been fully permitted and is awaiting a final investment decision, is being developed by Australian company Ioneer. Over the mine's 60-year lifespan, Ioneer estimates the mine will pump between $300 million and $700 million into county coffers, as well as between $110 million and $250 million into the school district’s coffers. 

But that money isn’t there yet. 

Lengthy permitting periods result in lags in revenue for communities, according to a 2023 report from CAP outlining the need for federal mining reform. In the early stages of development, local governments receive little revenue while having to pay substantial costs for services such as road improvements and schools to serve a growing population. 

The center argues those costs should not be shifted onto state and local taxpayers but should be paid for by the mine developer.

Earlier this year, Ioneer entered into a development agreement with Esmeralda County to provide more than $15 million in benefits to the county before work commences on the mine. 

The agreement, which has drawn praise from local officials and is separate from developments the company is making to develop the lithium-boron mine, includes more than $10 million in road upgrades and up to $7 million in benefits such as emergency response training. Ioneer will also fund emergency response personnel, additional law enforcement personnel, and provide vehicles and a building, with staffing increasing as construction ramps up at the site (it hasn’t started yet). 

“What the county was focused on was the shoulder period of when we start having an impact from our activities versus when we’re in production and the county is receiving direct tax receipts from proceeds from minerals and property tax,” said Chad Yeftich, Ioneer’s vice president of corporate development and external affairs. “There’s a gap, and this helps fill that gap.”

In 2022, Esmeralda County collected less than $350,000 from the net proceeds of minerals mining tax  — once the mine is in operation, the county will receive about $8.7 million per year from real property and other mining taxes.

"Between now and then, Ioneer acknowledges there will be more impacts to the county before they start getting those revenues,” Yeftich said.  

A sizable projected tax influx is also forecast in Northern Nevada, where a 2024 study projecting benefits from Thacker Pass estimated Humboldt County will bring in $6.5 million annually during the construction phase and $26.5 million annually during the operational phase — primarily from sales tax on purchased materials, according to Crowley. The study also reported that every $1 of capital construction will generate an additional 26 cents of spending in the county. 

It echoes a 2020 report that found more than 40 percent of Humboldt County’s economic revenue was attributed to mining. So far this year, Lithium Americas has spent between $300 million and $400 million on supplies for the project, with most sales tax revenues directly heading to Humboldt County’s coffers. 

“We are bringing tremendous economic development to Humboldt County. Most of it will be felt in Winnemucca, but the tax revenues will be felt throughout the county,” Crowley said.

But in Northern Nevada, some residents are concerned because despite years of meetings with Lithium Americas, no written agreement such as the one in Esmeralda County has been drafted. That’s because Lithium Americas hasn’t been asked to sign anything, Crowley said — but that doesn’t mean the company isn’t addressing community concerns.  

“If the school district or community wants to see our commitment in writing, they're welcome to write it up, and we'd sign it — no problem,” he said. 

But some residents and county officials worry their needs are being left behind as construction ramps up at Thacker Pass.

“They can talk a lot about the economic benefit this is gonna bring to Humboldt County,” Humboldt County Commissioner Ron Cherri told The Nevada Independent. “But we have to improve our infrastructure … we have to improve our public safety … where’s the money going to come for that?”

Crowley understands the frustration. Mine construction isn’t a speedy process, and lawsuits and protests also slowed buildout of Thacker Pass. For 15 years, Humboldt County residents have heard Lithium Americas make promises without action, he said.

“They’re tired of thinking of all the impacts and not feeling the benefits, but that’s because it’s taking so long,” Crowley said. “But we’re on the cusp of major economic development. Construction has begun and … all these things we’ve promised for over a decade are starting to materialize.

“I just don’t think the communities have had the luxury of feeling any of the things we’ve said would happen, and they’re about to.”

Equalizing ‘power dynamics between communities and the mining company’

In the 1980s, Montana passed an act requiring private mine developers to jointly develop economic impact plans with local officials as a condition of receiving a mining permit. Once approved, the developer must commit to paying all increased local costs resulting from the development through a variety of mechanisms such as grants, contributions and property tax prepayments. 

Once the mine is operational, the developer receives credits via tax rebates — if the mine fails to open, the developer remains on the hook for costs it already expended. 

Montana’s plan “equalizes power dynamics between communities and the mining company,” according to the CAP report, which points to a secondary problem — 150-year-old laws that regulate mining.  

Federal mining law was written in 1872. While private landowners, states — and in Nevada, local governments — collect royalties on hard rock mining, the federal government does not (although it does collect royalties on other private uses of public lands, such as oil and gas drilling). 

The mining industry has zealously and successfully lobbied against having to pay the federal government anything more than a nominal maintenance fee for its ability to operate on public lands, said John Leshy, professor of real property law at UC Law San Francisco.

“In part, it’s the problem of the industry that’s been so aggressive in preserving its really unique status as a major user of federal resources that pays zip,” he said.  

With the federal government not collecting royalties on most critical mineral mines, Leshy said there is little to show for depletion of public assets and no strategy in place to assist with local effects from mining activity. 

Many states focus on attracting large developers by cutting taxes and reducing regulations to incentivize activity, Haggerty from CAP said. And with most extractive mining occurring in rural locations, this leaves rural communities with an outsized portion of the burden.

“You get rural communities that need an economic shot in the arm and they are at a huge capacity mismatch. They don’t have the staff … they don’t have the financial resources to do a thorough assessment [of community needs],” said Jackson Rose, who helped author the 2023 CAP report. 

“There's been a lot of efforts to reform hardrock mining laws … why the efforts have failed is case by case,” he added. Mitigating effects on communities that host the mines should definitely be part of the updated framework, he said.

Chris Reilly, Nevada’s state infrastructure coordinator, agreed initial conversations between developers and communities are critical. He also cautioned that project detractors should consider the economic ramifications if development doesn’t occur. 

Without development, people leave in search of work, weakening the tax base, leading to a reliance on a fewer number of industries, he said.

“That’s the balance that we have to play, where we want to have a healthy, diversified economy,” he said. 

Helping address the needs of rural communities is one component of Gov. Joe Lombardo’s economic development bill SB461, Reilly said. The measure, which has not yet had a hearing in the Legislature, would establish a fund to assist with construction of necessary infrastructure for businesses looking to expand or relocate in the state and assist with funding projects to address critical rural housing shortages. 

‘Safety needs to be their number one priority’ 

A major concern of Humboldt County residents revolves around Orovada, an unincorporated town of roughly 150 people, 45 minutes north of Winnemucca, that serves as the gateway to Thacker Pass. 

When talk of Thacker Pass first started, residents raised a red flag about the community school, which sits at the intersection of Highway 95, a major thoroughfare connecting to Boise, Idaho, and the highway trucks will use to access the mine. As construction ramps up, dozens of trucks will rumble each day past the small K-8 school that sits just off the highway.

“I’m pro-mining. Obviously living in Northern Nevada, I see the benefits,” said Dave Jensen, Humboldt County School District’s superintendent. 

But having dozens of semi trucks passing within yards of the school on a daily basis is a safety issue, he said. 

“You’re going to have that amount [of] driving right next to my elementary school, and heaven forbid something happens, we have a tragedy,” he said.

Residents asked for help relocating the school, and mining representatives assured them that they would help make it happen, Frey and others said. But as construction on the mine is ramping up, the school has yet to be relocated, and the district doesn’t have funding of its own to move it.

Construction hinged on the company receiving full financing, Crowley said, which happened in early April — with that funding secured, Lithium Americas has acquired land for the new school and design is underway. The company will fund its full $16 million construction.

And, it’s taken steps to increase safety around the existing school, adding signage to slow speeding drivers and adding turn lanes. 

But with the new school not expected to open until 2027, two more years of truck traffic passing the old school is a concern for residents.

“Safety needs to be their number one priority for their workforce and the surrounding communities,” Frey said. 

Those same trucks Orovada residents are worried about will drive on Highway 95, the main north-south artery to Boise, Idaho, that is considered dangerous by locals because of a lack of passing lanes. With slow-moving truck traffic increasing as production ramps up at Thacker Pass, they worry about more accidents as drivers try to bypass the growing number of trucks. 

Between 2019 and 2023, Highway 95’s crash rate between Winnemucca and the Idaho border was higher than other rural state highways during the same period, according to an email from the Nevada Department of Transportation. The fatal crash rate is nearly 50 percent higher and the injury crash rate is nearly 75 percent higher. 

The department has plans to construct additional northbound and southbound passing lanes between Orovada and the state line, according to Public Information Officer Meg Ragonese, who did not provide a time frame for the work. 

Cherri said that in his 12 years of serving as a county commissioner, adding passing lanes to Highway 95 has been a number one priority for the county.

“We out here don’t feel it’s our responsibility to get things in order for a large mining company to come in here,” he said. “If the mine’s going to be making money out of this, they can ante up some money and get some of these improvements in.”