Phelps Dodge looks to revive mining in the Copper State

Would the mine be a boon to southern Arizona, or a taxpayer rip-off?

  • Phelps Dodge Company wants to open a major new copper mine near its Morenci Mine, pictured here

    DON TIBBITS
  • Phelps Dodge project site, Safford, Arizona map

    DIANE SYLVAIN
 

SAFFORD, ARIZONA — Times had gotten so tough for the copper business in Arizona that mining giant Asarco recently owed $900,000 in back taxes to Gila County. But thanks to new technology and rebounding copper prices, Phelps Dodge is on its way to opening the first big copper mine in the state in 30 years.

Located eight miles north of Safford, the open-pit mine would be one of the nation’s largest, able to crush 100,000 tons of rock a day and produce up to 250 million pounds of copper a year. In December, the Bureau of Land Management tentatively approved both the mining operation and a land swap that would give Phelps Dodge 16,297 acres of federal land around the mine, and give the BLM 3,867 acres scattered throughout the state.

The mining company will get more than four times as much land as it gives up, but federal and company officials say it’s an even trade: The BLM property is dominated by ordinary desert with creosote bushes, while the company’s offering includes a marsh near Flagstaff, grasslands southeast of Tucson and riparian habitat near Safford.

Some environmentalists, however, think the BLM undervalued its land by not accounting for its mineral resources, and overvalued the Phelps Dodge properties. "Almost invariably, the taxpayer gets ripped off in these land exchanges. We’re giving them land that essentially will be destroyed," says Rob Kulakofsky of the Sierra Club. "Rarely do we get an even exchange or figure in the cleanup that will have to be done."

Jobs and taxes

Phelps Dodge first staked a claim in the area in 1953, but it took technological advances to make it profitable to extract the ore, which averages just 0.36 percent copper. "Things that were once considered waste can now be considered ore," says economist and mining analyst George Leaming. "But a lot of capital has to be sunk to develop the facility — that’s the hard part."

Although the Safford mine will cost at least $350 million to develop, copper is now trading at about $1 per pound, up 40 percent this year amid growing demand in China and a stronger U.S. economy.

The new mine, which could open by 2007, would cover 3,400 acres in the foothills of the Gila Mountains and create a 450-foot pile of crushed ore visible from Safford. It could also provide 350 full-time jobs and double the value of taxable land in rural Graham County.

According to Phelps Dodge, an average of 450 workers would be needed in the 18-month construction project, and the mine would directly employ 350 people. Another 275 jobs would be created in Safford, where about 750 of the city’s 10,000 residents already commute 45 minutes to Phelps Dodge’s Morenci Mine — the largest in North America.

Local civic leaders say they’re banking on the new mine to give Safford’s farm- and prison-based economy a much-needed boost. In the "Copper State," mines employed a mere 6,200 people last year, less than a quarter of the total in 1981, at the industry’s peak. Mayor Van Talley predicts that the mine could make Safford one of Arizona’s fastest-growing cities and give young people a reason to stick around. "They’ll be able to stay here and find meaningful employment," he says. "We need this mine to move forward."

The land exchange would also cause the amount of private property in Graham County to increase from 7 percent to 8 percent, swelling its assessed value from $104 million to at least $200 million, says County Supervisor James Palmer. "We need a new jail in the worst way, and we have no way of providing it," says Palmer, adding that the mine’s presence could help the county lower its taxes.

Sulfuric acid and groundwater

Phelps Dodge says the new mine will have "zero discharge" to the environment. "There won’t be anything that leaves this property other than the final (product)," says R. Hunter White, president of Phelps Dodge Safford. "Every drop of water we use in this will be continually recycled." The company, which plans to pump 1.96 billion gallons of groundwater per year, says operations will not impact the Gila River, which begins in southwest New Mexico, winds toward Phoenix and dies well before it reaches the Colorado River near Yuma.

But environmentalists and others question whether such a massive operation will be so benign. In comments on the Environmental Impact Statement, the U.S. Fish and Wildlife Service said not enough work was done to gauge the effect of groundwater pumping on the Gila or nearby springs and Bonita Creek. The Environmental Protection Agency said particulate pollution might exceed federal standards.

Phelps Dodge plans to use sulfuric acid to leach out the copper — and opponents question whether impoundment dams for acidic water will be able to withstand a 100-year flood, or be maintained in perpetuity to protect the Gila.

"I’m always skeptical when a mining company says there’s not going to be any impacts," says David Hodges, executive director of the Tucson-based Sky Island Alliance. "We’ve heard that a few thousand times, and it’s never turned out to be true."

Phelps Dodge must still obtain other water, mining and air quality permits from the state and federal agencies.

The author is the environment writer at the Arizona Daily Star in Tucson.

The Safford mine environmental impact statement is on the Bureau of Land Management's Web site, www.az.blm.gov, or call Scott Evans at 928-348-4414

Phelps Dodge 602-366-8100, www.phelpsdodge.com

Sierra Club Arizona 602-253-8633, arizona.sierraclub.org.

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