ELKO – Traffic is up at Northeastern Nevada Regional Railport in Elko County, where one of the newest customers is Newmont Mining Corp., which ships gold concentrate from its mine in Colorado to the railport for processing at Carlin.
“We feel that our Elko railport operations have had a lot of success,” said Jeff Hymas, communications director for Savage Services, the railport operator. “It’s been good for us and the county, and we see the potential for growth as more businesses come to the area or expand operations.”
The railport is on roughly 58 acres of county-owned land, and “more than half of that is currently being used for operations,” leaving room to expand, he said.
The site is along East Idaho Street roughly 6 miles east of Elko and south of Interstate 80.
“Elko’s railport is attractive due to its proximity to I-80 and superb access to the rail line,” said Sheldon Mudd, executive director of Northeastern Nevada Regional Development Authority, which markets the railport as part of its economic development efforts.
Elko County owns the railport, and Savage Services operates the site at no charge to the county, although Savage is required to pay a concession fee when the number of railcars going through the railport reaches a certain amount per year.
“Traffic out there is growing,” said Cash Minor, assistant Elko County manager. “All we keep talking is railcar count.”
Still, Elko County has only received royalties from Savage once since the company began operating the facility in November 2009 because the number of railcars coming into the railport in the other years fell below the concession agreement with the county.
Minor said the concession agreement with Savage calls for 1,500 railcars to come through the railport before the concession fee, or royalty, kicks in.
“The only time that an excess of 1,500 cars passed through the railport was in 2010. This was when the Ruby Pipeline project [for natural gas] was being built,” he said. “We received a check for $7,880. The concession fee is $20 per car from 1,500 to 2,000, $30 for the next 500 cars and $40 per car in excess of 2,500.”
Ruby Pipeline took delivery on hundreds of pipes at the railport in that year for the pipeline that goes through Elko County.
“Royalties are not enough to make up for the investment, but the county benefits from higher property taxes, higher sales taxes and job creation because of the railport,” Minor said. “Those are where the big returns are.”
The railport cost roughly $12 million to develop, according to accounts when it was dedicated in March 2010.
Newmont began shipping concentrate in the second quarter of this year from the Cripple Creek & Victor Mine in Colorado by railcars to the railport in Elko County, where the ore is transloaded onto trucks to go to a mill at Carlin.
“The concentrate is loaded into special intermodal containers and moved by truck to the railhead in Colorado Springs. From there, the containers are shipped by rail to the Osino railport here in Nevada, where the reverse happens,” said Lorna Shaw, spokeswoman for Newmont’s Nevada and Colorado operations.
She said the concentrate is then shipped from the railport by truck to Newmont’s Carlin operations for processing.
“Shipping concentrate to Nevada benefits Newmont in three ways. First, Cripple Creek gets 30 percent higher recovery when the concentrates are processed through the roaster. Second, the sulfur in the concentrate acts as fuel for the roaster, reducing the use of natural gas at the Carlin operation,” Shaw said.
The third way shipping concentrate benefits the company is that the sulfur in the concentrate is converted to sulfuric acid, she said. The company then uses the acid at its Phoenix copper and gold operations south of Battle Mountain. The sulfuric acid is used in the copper leach process.
Savage Services transloads liquid and dry bulk products from Union Pacific Railroad cars to trucks and transloads from trucks to train cars, as well as providing switching services for railcars. Savage Trucking serves the railport but is a full-service, stand-alone trucking company that is under the same umbrella.
Savage Trucking’s terminal is on private land near the railport at Osino, which is an unincorporated community. The trucking company hauls loads to and from the railport, but other trucking companies also deliver and pick up materials at the facility.
Between the two operations, Savage has more than 50 employees, most of them working for the trucking company, Hymas said.
There are six nearby private parcels of land capable of connected rail service with Union Pacific through the railport, and two of them use Savage Services, he said.
Savage Services has a strict policy of not identifying any customers by name, but customers like Newmont and Pacific Steel & Recycling can identify themselves.
Pacific Steel is one of those businesses using Savage railcar switching services, said the Elko branch manager for Pacific Steel, Adam Eyman.
“It works great,” he said.
To be able to transload Union Pacific rail cars, Savage has special equipment that Hymas said started in 2009 with a locomotive used to move customers’ rail cars. The company has added four transfer conveyors, a forklift, a boiler system for heating products in rail cars, two mobile racks for transloading, a Mi-Jack crane for intermodal transloading, and air compressor systems for moving containers.
The railport was the brainstorm in 2005 of what was called the Elko Economic Development Authority, and Elko County Commissioners came on board to make the project possible. Northeastern Nevada Regional Development Authority is the current name of the expanded authority.
Then-Great Basin College President Paul Killpatrick and then-ECEDA Executive Director Elaine Barkdull met with then-Lt. Gov. Lorraine Hunt, who urged them to acquire land for the proposed railport, according to the Elko Daily Free Press.
Hunt committed $1 million in state economic development money. Barrick Gold Corp. donated $1 million. Newmont also supported the project. The Nevada Legislature appropriated $1 million, too.
Elko County acquired 800 acres of ranchland at Osino from Charles, Ann, James and Joyce Ellison for $2 million in 2006 and later sold much of the land to pay for development of the railport and industrial park. Ground was broken for the project in a ceremony in June 2006, and it was another three years before it was ready for use.
Although the aim of the economic development authority and the county was economic diversification in the beginning, most of the railport customers have been tied to the mining industry, Minor said.
Hymas said Savage Services plans to increase its outreach to potential customers, and such expansion would benefit the company while providing increased royalties for Elko County, more jobs and more spending at area businesses.
“Our hope is to identify other types of businesses in northern Nevada that could use our services, but mining is the focus of the local economy,” he said.
Hymas said businesses other than mining that move raw materials or chemicals, for instance, would benefit from the regional railport because Savage Services employees have the experience to handle critical materials.
Savage Services is based in Salt Lake City, has more than 50 years of transloading experience and started the trucking operation more than 70 years ago. The company has more than 250 locations, including international sites, and more than 4,000 employees. Growth recently included acquisition of Bartlett & Co., a grain and milling company.
“It’s a good thing for Elko.” Hymas said. “We’re a financially stable industry with a focus on safety and reliable service for our customers.”
NNRDA is planning new economic development promotions for the railport and for economic development in all its territory, which covers Elko, Eureka, Humboldt, Lander and White Pine counties.
Mudd said industrial sites “are paramount for economic growth within our entire region. Further, the more developed these sites are and the more amenities they provide, the more appealing they are to companies and site selectors looking for a new location. Most inquires we receive at NNRDA are those looking for turn-key locations where operations can begin almost immediately upon arrival.”
Mudd also said Jan Morrison, NNRDA’s economic development officer for Winnemucca, is working with Union Pacific Railroad to “ensure that all of our industrial sites are included on their online GIS industrial site map, adding to our overall exposure.”
Current economic impact of the railport and industrial park hasn’t been calculated, but the University of Nevada, Reno, did an analysis in 2010 that estimated a railport construction impact of $21 million in Elko County that year and an ongoing economic impact of $4 million, including from the industrial park.
Another UNR study in 2014 showed that beneficiaries of tax revenue generated by the economic impact of the railport and industrial park from 2008 to 2014 totaled about $1.7 million, according to an article in the Elko Daily Free Press.
After the Ruby Pipeline construction project, the railport’s business and development of the nearby industrial park slowed, so NNRDA hired consultants in 2013 to develop a master plan for marketing the facility and industrial park, according to news reports.
Companies at the industrial park in 2013 included Pacific Steel & Recycling, SAS Global Corp., Liebherr Mining Equipment and National Oilwell Varco.