Two tiny northern Nevada towns near the site of the annual Burning Man festival are facing an uncertain future when the largest regional employer closes early next year.

Citing a sluggish construction market, USG Corp. announced Thursday that it will halt its gypsum mine and wallboard manufacturing operations in the company-owned town of Empire on Jan. 31.

Officials say the move will put 92 people out of work in the town 100 miles north of Reno and could have a ripple effect on nearby Gerlach.

USG Corp. is allowing its employees and their families — about 300 people — to remain in company-owned housing until the school year ends in June, the Reno Gazette-Journal reported. But with most of the area's population of 465 people tied to USG and few, if any, other immediate job options, officials are concerned about the risk of a wholesale exodus.

"We've got to evaluate the whole situation. There are so many working pieces to this," Washoe County Commissioner Bonnie Webber told the Gazette-Journal.

The county school district operates elementary, middle and high schools in the area. Of a combined 74 students at the schools, all but about a dozen are family of USG employees, said Heath Morrison, school district superintendent.

"So the potential reality is we could be down to 12 students. We have to assess what that means," he said.

University of Nevada, Reno, economist Elliott Parker said closure of the USG plant could mean Burning Man might have to move.

"If the idling isn't temporary and (USG) doesn't come back in a year or two, I'd have a hard time imagining Burning Man could continue there," he said.

But Matthew Ebert, executive director of Friends of Black Rock/High Rock, questioned the prospect of losing Burning Man.

"Burning Man is largely a self-contained entity run from Reno," he said. "The event relies less on the infrastructure of Gerlach than perhaps what people think."

Gypsum mining first began in the area in 1923 and USG has operated a mine near Empire since 1948.

But the collapse of the nation's housing market has taken a toll on demand, plant manager Mike Spihlman said, leading to the Chicago-based company's decision to cease operations at Empire.

Empire is one of 16 gypsum mines USG operates in North America.

Closure of the plant is more bad news for Nevada's economy. The state leads the nation with a 14.2 percent unemployment rate, and construction job losses are the single biggest driver.


Information from: Reno Gazette-Journal, http://www.rgj.com