The Morenci mine, in Southeast Arizona, may soon lose its status as one of North America’s largest producer of copper.
Resolution Copper Co., a US-based company owned by giants Rio Tinto (ASX, LON: RIO) and BHP (ASX: BHP), is fine tuning details to submit a plan to the federal government this week, which will detail how it would run what it could be North America’s largest copper mine.
Based in Arizona’s famous Copper Corridor, the Resolution Copper mine is currently in its pre-feasibility stage. The plan, to be presented to the U.S. Forest Service on Friday, is only the first step in a lengthy environmental review of the vast mine by the federal government.
According to USA Today, Resolution Copper —a 55%-45% joint venture between Rio Tinto and BHP— is expected to present a step-by-step strategy on how it plans to mine the copper ore, dispose of tailings and other waste, and bring water to the site.
The ore body the company seeks to mine is a deep-seated porphyry copper deposit located under the now inactive Magma Mine. Rio has reported an inferred resource of 1.624 billion tonnes containing 1.47 per cent copper, at depths exceeding 1,300 metres.
BHP Billiton bought Magma Copper in 1996 for $3.2 billion. The group’s San Manual copper smelter in Arizona was considered to be the jewel in the crown, but barely three years later BHP was forced to put it on care and maintenance and then shut it down completely in 2003.
Closure costs added another $800 million to the world’s number one miner’s most disastrous acquisition to date. Rio Tinto became the joint venture partner on Resolution Copper as a result of these write-offs.
Since 2005 Resolution Copper has been trying to arrange a land swap deal with the federal government to start mining. So far, eleven versions of a land-exchange bill have been introduced in Congress.
If approved, the mine is expected to create 3,700 direct and indirect jobs and bring $61.4 billion in economic benefits to Arizona.
Copper output from the mine, to begin production in 2021, is projected to meet 25% of the internal demand.
Image from WikiMedia Commons
7 Comments
Sergo Cusiani
Bought the mine in 1996 to begin production 27 years later! Excellent example of strategic planning!
Chris Armstrong
Mr. Cusiani, it is easy to be an armchair critic with 20/20 hindsight some 17 years after the fact, and, in 1996, it was a lot more difficult to predict copper prices, than recently. What $billion investments have you been successful with recently?
Sergo Cusiani
What is 20/20 hindsight? I see, it could be a
local parametre in Lerch-Grossman algorithm. I wonder, if anyone there in 1996
knew that net profit value of a single ore block decreases by approx. 5% every
year. That is, you will have better finance if you mine the block today
rather than next year (let alone 27 years’ time), regardless the price. Looks like the board of
directors sits in armchairs with 6/5 hindsight.
Mike Failla
Lets get this land swap done and get our miners to work. That is what needs to happen. Yes copper is cyclical but the ore is 7000 ft down. one shaft is almost done and I understand 5 or 6 more need to be constructed so lets give all our poiticians a kick in the pants and for once get this done right and very soon. This is one hell of a project and well worth the time and the effort!
Sergo Cusiani
Questions!
1. Who has made a pre-feasibility study?
2. What are reserves?
3. What are resources?
4. What copper price did they use for NPV scheduling?
5. Is there any other payable mineral except copper?
6. What is the planned mine-life?
7. What is annual production plan?
william
The land swap is wrong. They had nature conservancy close all the land included in the swap. So we’ll be giving open land for closed land that a tree hugger group controls to keep people off of. Tell them open the San Pedro river or keep Oak Flats open to the public.
Wilmer
Bringing JOBS and ECONOMIC BENEFITS to America!?!? Shame on them. Just wait until the President hears this. He’ll shut it down immediately.