A steep increase in the price of copper is stirring activity in Arizona’s copper country.
With the metal more than doubling in price on the world market since late 2001, Arizona copper operations are expanding production to take advantage of booming demand, especially from China. Also development plans are moving ahead for newly discovered ore bodies.
The recovery is welcome news for copper companies that have endured a slump stretching back to the late 1990s.
Phoenix-based Phelps Dodge Corp., the largest copper mining company in the state and the second largest producer in the world, reported its first profitable quarter since 2000 in the last three months of 2003. Also the company, whose stock price has more than tripled since late 2002, has announced plans to expand its mining operations in Arizona, New Mexico and Chile.
In Arizona, the company will begin running its Miami, Ariz., copper smelter at 100 percent capacity by the third quarter of this year, although it will not need to hire added workers to achieve the increase. The smelter had been running at a reduced rate since 2002.
Also the company will increase concentrator operations at Sierrita and Bagdad, to full capacity during the course of this year, adding 100 jobs in Sierrita and 50 in Bagdad. Both have been operating at a reduced rate since 2002.
The company expects to produce 2.8 billion pounds of copper worldwide this year and 3 billion next year, up from 2.6 billion in 2003.
"Our industry has experienced a long downturn. We are excited about being able to increase production and put people back to work," said chairman Steven Whisler.
Smaller Arizona copper companies also are expanding. Mercator Minerals Ltd., a Canadian mining company, has acquired and expanded production at the Mineral Park mine near Kingman while Nord Resources Corp., another Canadian company, is raising $20 million to reopen the Johnson Camp copper mine near Dragoon in Cochise County.
The turnaround is demand is coming largely from China, which claims to be the largest copper-consuming country in the world. China is using copper to developed its wired infrastructure and for construction projects, said Phelps Dodge spokesman Peter Faur.
"Also a lot of manufacturing that uses copper has moved to China, like electric motors," he said.
As far as the U.S. market is concerned, "we haven’t seen a lot of growth yet," he said.
Long-range activities are developing two major new mines in Arizona to satisfy future demand. An environmental impact statement has been completed for a new Phelps Dodge copper mine near Safford, which the company hopes to open between 2007 and 2009. It would be the first new copper mine in the state in more than 30 years, Faur said.
Also a joint venture of Rio Tinto and BHP Billiton has discovered a massive 1 billion-ton ore deposit near Superior, which the partners are calling the Resolution project. The deposit contains about 1.5 percent copper, which is twice the concentration of copper at most Arizona mines, said Nyal Niemuth, engineer for the Arizona Department of Mines and Mineral Resources.
But the Superior deposit is deep underground and contains hot rock temperatures of 80 degrees Centigrade, which will make the mine tough to develop. Project officials say production might not begin until the middle of the next decade.