The multi-national mining company Rio Tinto has long promised that its proposed new copper mine near the small town of Superior, Ariz., would provide 4,000 jobs and economic salvation for a local population that has struggled to find work since a previous mine closed in the 1990s. But Rio Tinto’s subsidiary Resolution Copper recently announced it is laying off 400 of its approximately 500 workers, blaming the U.S. Senate for not passing a land exchange bill that the company says is crucial to its proposed operations. The land exchange would give Resolution Copper ownership of 2,300 acres of national forest land, including the popular Oak Flat campground, on a lovely oak- and cottonwood-studded plateau above the desert east of Phoenix.
On November 30 the company announced that they cannot get financing to continue operations without the land exchange, so about 400 workers will be laid off between now and March, as work on a new mining shaft and exploratory drilling projects are completed or suspended. The copper and other metals industries worldwide have taken a hit in recent months, and Rio Tinto is scaling back operations globally. The company recently announced that by the end of 2013 it would slash $1 billion worth of exploration and evaluation spending worldwide and at least $5 billion in total spending due to falling commodity prices. While the European and American economic crises have slowed demand for steel and other products that drive metal demand, China’s growth is expected to still keep copper and other commodities in high demand (and thus at high prices) in the longer-term.
Meanwhile, activists and local residents who have been fighting Resolution Copper’s proposal see the layoff announcement largely as a ploy to pressure Congress to pass the land exchange bill, possibly during the lame duck session before the next Congress is seated, or as reintroduced legislation early next year.
“Getting the land exchange is what this is all about, though even I didn’t think they would do something so cynical,” says Roger Featherstone, executive director of the Arizona Mining Reform Coalition, which works with environmental groups, tribal leaders, local residents and former miners concerned about new mining projects in the state. “They’re making every effort to make the town freak out.”
The Arizona Republic quoted Resolution Copper spokesman Bruce Richardson saying those who see political machinations in the layoffs are the cynical ones: “Cynics haven’t invested $1billion in the project…Cynics didn’t have to go to the town and tell people they are losing their jobs today.”
Sen. John McCain (R‑Ariz.) said in a press release that the layoffs are the result of Congress failing to pass the land exchange, and he called the bill “a top priority for the state of Arizona.” Media reported his office saying he’d pursue all options to pass the legislation by the end of the year. Rep. Raul Grijalva (D‑Ariz.) continued his strong opposition to the mine, noting that under the 1872 Mining Law that governs metal extraction, Rio Tinto would get the copper essentially for free and pay no royalties to the federal government.
Arizona elected officials have been trying to push the land exchange through Congress in different forms for at least seven years. Opponents have countered that it is a bad deal for residents and taxpayers, and that it is not legal because President Dwight D. Eisenhower specifically removed part of the area in question from mining, and other presidents reaffirmed that order. San Carlos Apache leaders also say the mine would destroy areas sacred to the tribe and violate their tribal rights.
Two years ago, backers of the land exchange attempted to pass it attached to an omnibus public lands bill, an effort that failed after widespread organizing by mine opponents and public lands groups. On November 18, Featherstone sent out an action alert predicting a similar maneuver:
(Arizona Republican Senators Jon) Kyl and McCain will most likely attempt to attach (land exchange bill) HR 1904 to important legislation instead of letting the Senate decide on the merits of the bill. Because of the controversial nature of the Oak Flat land exchange, this would amount to adding a poison pill to any necessary legislation.
Resolution Copper announced that their annual funding to the mine will drop from $200 million in 2012 to $50 million in 2013. With no land exchange before spring, the company said it would maintain a staff of about 100 working on permitting and political issues, while halting physical construction and exploration activities.
Jobs are badly needed in Superior and surrounding small mining towns where other mines have closed or reduced their workforce over the years. At a recent meeting with residents, Resolution officials said they would try to relocate workers at other Rio Tinto operations. However, new jobs are surely less likely for those who need the jobs most desperately — the younger, lesser-skilled local residents employed by subcontractors.
The proposed mine has bitterly divided the town, with many supporting the idea and longing for a return to the mining-based prosperity of the past, while others say the mine would destroy a beloved beautiful area and hopes of building thriving outdoors- and arts-related tourism in Superior. While hundreds of layoffs are sure to have a significant impact on the town, Featherstone says many of the employees don’t live in Superior, and the jobs being eliminated appear to include temporary hires by contractors who offer little job security and few benefits. He also says Resolution Copper should not have sunk so much money — $1 billion — into the project before acquiring the land or permits needed to open the mine. A common criticism of the hard-rock mining industry is that companies invest heavily in projects before receiving government approvals, then use their investment as an argument for why government agencies must green-light their projects.
“Even if this is based on a financial crunch and is not just extortion, it’s still a crisis of Rio Tinto’s own making,” says Featherstone. “It shows the boom-and-bust cycles of mining. The world’s economy is cooling off again, so now there’s a glut (of copper). No one asked Rio Tinto to go out and do all this work without permits. Now this is a natural place for them to stop.”