Access Fund Responds to Resolution Copper’s Recent Announcement of Workforce Reductions

From Access Fund News

Access Fund Responds to Resolution Copper’s Recent Announcement of Workforce Reductions

12/10/2012
Some of you have probably seen the recent announcement by Resolution Copper Mining (RCM) stating their intent to scale back most activities at the RCM mine due to uncertainty in the legislative and regulatory environment. This mine is located adjacent to the rock climbing areas at Oak Flat in central Arizona.

The announcement reads, in part: RCM “will reduce its overall budget from about $200 million in 2012 to about $50 million in 2013, which will result in the loss of approximately 400 jobs or about 75 percent of its overall workforce….To justify further development, we need more certainty around legislative and regulatory activity affecting Resolution Copper.... Specifically, approval of the land exchange we’ve been seeking since 2005 constitutes the critical path forward. Our efforts at RCM will be directed toward working to obtain the certainty we need.”

While we at the Access Fund are very sympathetic to those who may potentially lose their jobs, this statement links the upcoming workforce reduction to uncertainty caused by RCM’s inability to get their land exchange bill (HR 1904) passed in the United States Congress which would convey ownership of Oak Flat’s popular climbing areas to RCM for a massive copper mine. In reality however, Rio Tinto, the parent company and majority owner of RCM, simultaneously announced it was cutting back some $7 billion dollars in development and operations costs worldwide over the next two years due to a global weakening in commodity demand.

Resolution Copper’s recent announcement is thus a politically motivated attempt to gain sympathy for layoffs that they would most likely be making anyway and to pressure Congress to move their problematic legislation through the Senate. We should not let RCM succeed in this misinformation strategy.

Resolution Copper bemoans the fact that eleven versions of their land exchange bill have failed to pass through Congress over the last seven years, but RCM has only themselves to blame. If RCM had put a larger portion of their lobbying efforts into finding meaningful compromise with Oak Flat recreational users, environmental advocates and Native Americans, they might have obtained a land exchange or other authorization for their new mine. Instead, inflexibility on RCM’s part has caused them to insist on terms and conditions for their mine that are highly favorable to them at the expense of all other interested parties.

A few remarkable examples of RCM's unwillingness to be reasonable include:

• An insistence on employing a mining method which will destroy the entire Oak Flat area and with it cause the destruction of a heavily used federally protected recreation area, while alternate mining methods which would preserve the surface and lead to greater job growth are dismissed out of hand,
• An attempt to bypass the National Environmental Policy Act (NEPA) and any responsible environmental analyses before a land exchange takes place,
• Removing the Secretary of Agriculture’s ability to make a genuine determination whether this land exchange is “in the public interest” as required by most federal land exchange laws, and
• The disregard of the cultural and traditional interests of Native Americans who use the Oak Flat area and consider it sacred.

Please let your senators know that the Oak Flat land exchange bill (HR 1904) is a bad piece of legislation and should not be passed in the current lame duck session of Congress. Please also tell your senators that HR 1904 should expire with the 112th Congress and that RCM must address all of the substantial problems in the current bill before Congress considers any future proposals. To find your US Senators, see this link.

Many thanks to the AF and to those who are keeping the pressure on RCM. I will definitely write.

Thanks Access Fund for the info. I also want to thank the Queen Creek Coalition and the Concerned Climbers and the overall climbing community for keeping the pressure on RCM through the years.

However I see this as an opportunity for RCM to put all of their monies into pushing their intentions through congress. There is a less demand for copper so hence layoffs at their projects that are not producing (yet?).

I am sure that RCM is still pushing their bill through congress just as strongly as before.

Has anyone seen any information on Resolution's projected price coming out of the proposed mine vs. the global commodity futures? Resolution's statements about political uncertainty would hold up, in my opinion, if they can demonstrate that 1) this would be their lowest cost operation and 2) that the projected costs are below the projected global commodity costs. If they can prove that but for the legislative uncertainty, this would have been their most profitable operation then the argument that they would have "most likely be [laying people off]...anyways" wouldn't hold. We need to know the validity of being able to tie the operation of the Superior mine to Resolution's operations on a whole.

Thanks,
Tony
(reposted from my post on CCA's FB)

The copper market has been in net deficit for most of 2012. Copper prices have held up relative to other commodities.

80% of Rio's profit comes from Iron - Iron and coal prices have gotten pummeled in 2012.

Rio is diversifying more into copper to try to reduce exposure to Iron. The good copper deposits now are deep. Oyu Tolgoi is just starting open pit production, and will start from underground in 2016. Resolution probably has the grade and size to be a relatively lost cost producer (yes, below current prices). They've been trying to get a land exchange for 8 years. Why keep flogging a dead horse?

Here's a link to a new film (2013) about Oak Flat and Resolution Copper's efforts to privatize this federally-protected landscape:

youtube.com/watch?v=yiME3XW…

Great video! Really well put together. I wish everyone in the House and Senate would watch this video! Thanks for posting it BlueFrog.

Thanks Red.

Love it! Great photography, narration, music and content. Well done.

Really glad you enjoyed it.

Right on Blue Frog. Though it is a fiercely complicated issue, it's hard not to see it as black and white. Good vs evil. Though I have only climbed down there once, it was easy to appreciate the unique environment these lands offer, and it would be heartbreaking to see them ravaged any further for the ultimate profit of a few.

That's good news for climbers/environment land the Native Americans, but sucks for people who have to provide for themselves, and families.

I love Oak Flat. This excellent and informative video explains some of the reasons why you would love it too. It was protected for a good reason, it is also sacred to many.

Thanks for making such a wonderful video BlueFrog!

Excellent. Puts the issue in good perspective. Irreplaceable natural system versus short term $$ locally. We need copper, but maybe not this copper.

Thanks for watching the film and for the great comments. Gosar's bill is now officially dead with the end of the 2012 Congress, meaning Oak Flat remains a federally-protected landscape in 2013.

However Ann Kirkpatrick is the new representative for the district containing Oak Flat, and she sponsored a (failed) land exchange bill when she last held office in 2010. She may soon try to submit a new bill so the challenge of defending this area is not over.

For now though we can look forward to visiting Oak Flat and enjoying it as it was meant to be enjoyed - without a noisy backdrop of drilling rigs.

"H" wrote:That's good news for climbers/environment land the Native Americans, but sucks for people who have to provide for themselves, and families.

Climbers and Native Americans also have to provide for themselves.

A deeper issue here is that Resolution laid out a strategy from the beginning that sought special favors from Congress without providing critical information as to the scope of the project. One example (of many) is their failure to address the waste side of mine production. Specifically, where to put the mountain size of waste (tailing). It is equivalent to NASA proposing putting people on the Moon without a plan for how to get them back to Earth.

My personal view is that Congress should be working on establishing a modern Mining Law that creates a level playing field for all mining companies. Such legislation should include royalty provisions and recognize that planning needs to go all the way through closure of an operation. This would also cut way down on corporations buying favors through lobbying and the resultant elimination of the democratic process.

These things are important and in the long run would be more fair to workers, stakeholders and to the environment

The playing field is level now for metal mining companies, and the various permitting requirements for opening a mine do require planning for closure during the design.

Today Rep. Ann Kirkpatrick (D-AZ) submitted new legislation to privatize Oak Flat for Resolution Copper. She's partnered with Tea Party republican Paul Gosar to sponsor the bill, in fact Kirkpatrick has the support of all AZ's republican reps but no other democrat beside herself This is an attempt to appear more "bipartisan" (hate that word but there it is).

This bill will likely pass the House quickly. Then it's up to Sen. Ron Wyden (D-OR) who's the new Committee Chairman of the Senate Energy and Natural Resources Committee. Also new Interior Secretary Sally Jewell could play a part in this, and who knows how a former REI CEO will approach an area with great recreational value and mineral value. Writing these people to urge them to continue to preserve Oak Flat would be helpful.

With the Queen Creek Coalition (a group of climbers who have received moneys from Resolution Copper) being in support of mining at Oak Flat, it's up to climbers who oppose the mine to make their voices heard elsewhere.

The Concerned Climbers of Arizona is one group in opposition.

BlueFrog wrote:With the Queen Creek Coalition (a group of climbers who have received moneys from Resolution Copper) being in support of mining at Oak Flat,

formally Queen Creek Coalition Inc. since it's tyrannical overthrow by 1 who shall always be named

EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF.EF

"...The Concerned Climbers of Arizona is one group in opposition."

the 'only' climbing group in true opposition

BlueFrog wrote:it's up to climbers who oppose the mine to make their voices heard elsewhere.

want to start another thread.. anyone have a copy of the nu bill?

I don't have a copy of the new bill yet but it would be good to post it when available.

I forgot to mention that the QCC gave its position on its website today, which I'll paste here:

"Many of you have heard that Congressional Representatives Gosar and Kirkpatrick have re-introduced the Land Exchange legislation into this session of Congress. We do not have further information than it appears to be similar to Gosar’s bill of last year.

Please keep in mind that following years of negotiations that began in 2004, the Queen Creek Coalition signed a Recreational Use License with Resolution Copper in July of 2012. It provides for QCC to manage the rock climbing on Resolution Copper’s private property that includes The Pond and Atlantis. Under the License QCC is responsible for communications and permitting of that climbing on private property. QCC will be disseminating the process for such registration soon and is setting it up so that while parties need to register to have legal access, the registration process does not include an endorsement of the Mine or Land Exchange by the individual climber.

It is the hope of QCC the economic benefits of a potential copper mine can seed sustainable, "green" economy based on the tremendous recreational and conservation resources in the region. This Grand Solution of a Desert Greenbelt around the mining activities has been a guiding principle of the QCC since day one and we remain committed to its creation and implementation."