Economic Benefits of the Rosemont Mine

The Augusta Mining Company’s plan to build an open pit mine in the Santa Rita Mountains south of Tucson has been controversial from the start. The Rosemont Mine project will cover 4,300 acres, about one third of which is privately owned by Augusta, the rest is U.S. Forest Service land. Many support the plan for economic reasons, while others see it as a bight on the landscape and an ecological disaster.

The Arizona Department of Mines and Mineral Resources
(DMMR) released a describing the economic impact the mine would have. The data are based on a recent assessment conducted by the Arizona State University.

The DMMR included the following in a press release dated November 20, 2009, “During the projected 20-year production/post-production phase, the State of Arizona will see an average annual increase of $907 million per year in economic activity, $214 million in residents’ income, and $32 million in state revenues. The project will support 800 additional jobs for Arizona residents above the 2,100 added in the three-county area.” It also reports that during the twenty year production/post-production phase that “the total gains to the U.S. economy add up to $27 billion in output, $15 billion in gross domestic product, $8 billion in personal income and $3 billion in federal government revenues.”

Along with environmentalists and residents in the area, Pima County has taken an anti-mine position, even though it has no legal authority to participate in the decision process. The U.S. Forest Service has sole authority in that regard.

Ironically, Pima County had an opportunity to purchase the private land (approximately 1,000 acres) prior to Augusta, but turned it down.

Could Augusta’s plan to mine Rosemont Valley maybe, possibly, not be such a bad thing?

 

This was originally published in the Tucson Weekly

Sherman, set the Wayback Machine for 1897. We are going to visit the United States Congress as they pass the Forest Management Act, which defined the mission for what will become the United States Forest Service.

Mr. Peabody might begin a history lesson in this way.

The Forest Reserve Act of 1897 created management provisions, provided funding, and defined the purpose of the reserves as forest protection, watershed protection, and a source of timber supply for the nation.

In addition to timber, today’s “Land of Many Uses” provides an array of materials and services including ore and recreation. As a forestry student said to me some twenty-odd years ago, “The National Parks are our Crown Jewels, and the National Forests are our industrial diamonds.”

The mining industry has profited wildly from these government resources. This, along with its colossal disruption of the countryside and toxic byproducts, make it second only to whaling in industries despised by the environmentally sensitive.

Could there ever be a “nice” mining project, or maybe just an acceptable mining project? If so, what would it look like?

Let’s try a little brainstorming. First, a nice mining project would buy the land it wanted to use, instead of paying token, below market fees for government set-aside land, as do the hikers, mountain bikers, hunters, and birders. Second, it would generate an independent fund to restore the site after it is depleted. Third, it would create an endowment that would support the local community. Of course, it would comply with the latest standards of worker and environmental safety.

Enter the Augusta Resource Corporation. Augusta wants to get at the rich copper deposits in the Santa Rita foothills. It’s proposed mine seems to fill the bill as a nice mining project.

From Pima County Supervisor Ray Carroll, to the folks at the Tucson Weekly, anti-miners stand in fierce opposition to the project. Those who are in favor, cite the need for copper, job creation, wealth creation, etc., while acknowledging the visual price and environmental risks. The anti-miners generally acknowledge many of these positives, but they see the environmental impact as a deal breaker.

Ironically, this whole controversy could have been avoided if Pima County had purchased the property, now owned by Augusta, from Yoram Levy when it had the chance. Levy purchased the land for $4.8 million, then offered it to Pima County for $11.5 million. The county passed on the deal, and he ended up selling it to Augusta for 20.8 million. Now, some might say that ol’ Yoram was a schmuck for trying to more than double his money with the county. Others might call him a fool for making the offer to the county when he could have (and did, in the end) quadruple his money with another buyer. You might even say that the county blew a chance to buy it at a $9.3 million discount.

I attended the meeting of the Pima County Supervisors in which Ray Carroll’s resolution opposing the mine was discussed. The Augusta folks made a presentation, and answered questions from the Supes. Ray Carroll did not miss an opportunity to bash the mine idea, or Augusta Resources. Ann Day got in a few licks, but did not seem very inspired. The rest were oddly silent.

The audience was one-third pro-miners, two-thirds anti-miners. Augusta “salted the mine,” so to speak, by filling the center section with friendlies.

The speakers were quite predictable, though one put words to a feeling I get that makes me squirm in my seat when these sorts of issues arise. A geologist named Ann Pattison made the following statements: “Some say that we should let all the mining be done in the Third World. That is Environmental Imperialism of the worst sort.” She went on to point out that if a mine were to be built, it would be far better, from a global perspective, for it to be built here. Our environmental laws, labor laws, and advanced technology would result in a much cleaner and safer operation.

From a strictly environmental perspective, that’s a tough argument to beat. Maybe we could make amends for our Environmental Imperialism by offering Augusta a tax break… just a thought.