In the Central Arizona town of Miami, a thick deposit of copper is buried nearly 2,000 feet deep under a mile of U.S. 60.
The highway is the town's main drag, but that fact might not deter a mining company from going after the metal below. Canada-based Bell Copper Corp. will decide early this month whether to try to unearth it.
It's just one of many signs in Arizona of the copper industry's reawakening, fueled by rapidly escalating global prices.
It's also the latest chapter in the saga of boom and bust that has marked mining in this region since the late 1800s.
Globally, copper prices that bottomed at $1.33 per pound during the recession's abyss back in 2008 have routinely topped $4 recently, and in the last two weeks climbed to $4.40. They're regularly setting records.
Stockpiles of copper on the world's metal exchanges have plunged this year, and some forecasters see a shortage occurring next year. Many forecasters see $5-a-pound prices during the next one to three years.
In Arizona, the higher prices have sparked renewed interest in several long-recognized, largely untapped deposits besides Miami's.
Moreover, the state's existing mines have restored many jobs they cut in 2008 and 2009.
There's no doubt copper is again a hot commodity in this state - but that doesn't mean all local leaders are sold on it.
Copper a major force
"When you're hunting elephants, you go to elephant country," and that explains Bell Copper Co.'s attraction to Miami, Bell consultant Bob Zache says.
Copper mining in the hills has been a huge force in the town of 1,800 for more than a century, although its mines aren't nearly as active today as they were 50 years ago.
Magma, Inspiration, Miami and BHP are among the copper companies that have plowed Miami's hills over the past century. Freeport McMoRan and BHP operate there today.
But the copper underneath what is now U.S. 60 has been only sporadically mined since Cleve Van Dyke, the town's founder, hit a 40-foot-thick deposit of 4 percent copper grade there in 1916.
This month, Bell will decide whether to exercise an option and pay $2.5 million to buy surface and underground mining rights to about 1,000 acres. After four years of drilling and permitting that would cost the company tens of millions of dollars, the Vancouver-B.C.-based Bell Copper would start going after 112 million tons of deposits containing about 0.52 percent copper.
The operation would employ about 100 people, said Tim Marsh, Bell's president.
He rules out ripping up the town's streets to get at the copper. An alternative could be to inject an acid solution into the ground to extract copper from underground rock, then pump it up in liquid form for processing.
From 1968 to 1980, Occidental Minerals Co. drilled 70 holes all over Miami to test the copper deposit, but pulled out after community opposition erupted.
While copper's rising price now makes this project more attractive, Marsh said the single biggest factor that will drive his decision is the attitude of town officials. "I want a sense that I won't be throwing shareholders' money down a hole like Occidental did," he said.
Another mining venture
An hour's drive from Miami, in Florence, another Vancouver, B.C., company is eyeing an underground copper deposit along the Gila River. Curis Resources Inc. bought 1,182 acres of land last May at the town's north end and hopes to start mining in 12 months.
Copper was discovered at that site in the early 1960s but never mined. In the 1990s, Magma Copper Co. and its successor BHP Copper owned the property, and by 1999 BHP had received all the needed permits. Then copper prices crashed. A real estate developer picked up the property in 2001. Before development could get going there, the real estate market cratered.
Curis started looking at the site four years ago, recalls Michael McPhie, Curis' president and CEO.
The company plans to drill 800 feet deep into the copper deposits and inject a vinegar-strength sulfuric acid solution to dissolve the copper, then pump the liquified copper back up.
Last month, the company issued an Initial Public Offering and sold about $38 million in stock, $8 million more than it was seeking.
"We think the trend and timing is right for this project," McPhie said, adding that the company plans to hire 150 to 160 people and spend about $250 million to bring the site into production.
Work forces increased
As rising copper prices increase mining-company profits, Arizona-based mining giants Freeport McMoRan Copper & Gold and Asarco have boosted the work force at most of their eight Arizona mines, and at Asarco's Hayden smelter, by a range of less than a percent to 33 percent compared with 2008.
Freeport has reopened mines in Miami and its Chino mine complex near Silver City, N.M. At Miami, it is investing $40 million to ramp up its production.
Gryphon Resources, a company based in Washington state, says it intends to spend $265,000 to buy an option to acquire rights to copper and gold on 560 acres lying about 40 miles north of Tucson and 13 miles west of the old San Manuel copper mine in Pinal County.
The owners of the old Oracle Ridge Mine near the top of Mount Lemmon north of Tucson are still at the beginning of their efforts to secure government permits to reopen that aging underground copper mine, which last operated from 1991 to 1996.
"Any copper project is worth more now than a year ago," said Jason Mercier, investor relations director of Gold Hawk Resources Inc., which bought the Mount Lemmon mine site at the end of September.
limited impact seen
Yet the mining boom's impact on Arizona's broader economy will be minimal, a prominent University of Arizona economist said.
The state's metal mining industry employs only 8,300 people, about 0.3 percent of the state's total work force, said Marshall Vest, director of the Economic and Business Research Center at UA's Eller College of Management.
Going back to the mid-1950s - as far back as Vest's data go - metal mining's biggest slice of the state's work force was about 5.2 percent in 1957, when 14,900 people worked in the industry.
"Now, the chance of getting back to five percent is zero," Vest said. "More than 124,000 workers in metal-ore mining would be needed to get it back to 5.2 percent. I think it would be pretty incredible if the number of mining workers could even double."
An Arizona State University economist agreed with Vest but said copper can have a tremendous local impact. The state's highest per-capita and fastest-growing personal-income rates are not occurring in Maricopa or Pima counties, said economist Lee McPheters, but in rural Greenlee County - where 45 percent of all jobs are high-paying, mining-related positions.
sLow to get going
Getting these new mines online may not be easy, which is one reason many forecasters expect global copper prices to keep rising even as companies try to crank up new supplies to meet the demand.
Sierra Club Grand Canyon chapter leader Sandy Bahr decries what she sees as inadequate mining regulations here - mines, for instance, face no limits on their groundwater pumping.
But copper companies complain that mines take too many years to permit, with Rosemont Copper's protracted delays in getting an environmental impact statement released being a prime local example. Rosemont, a subsidiary of another Vancouver, B.C.-based company, Augusta Resources, wants to build an open-pit copper mine in the Santa Rita Mountains southeast of Tucson.
In another example, the Florence proposal needs a rezoning from the Florence Town Council since the land is zoned for housing. Although BHP had a federal permit to inject the acid solution underground, the Environmental Protection Agency has ordered Curis Resources to get a new permit.
Curis, like Rosemont Copper, pushes its project as sustainable, calling its mining technology "an environmentally sound, proven technology that allows for the recovery of valuable copper minerals" with no mine tailings, waste dumps or the scars of open pits. It's called "in-situ" mining, for in-site. The project promises low energy and water use, and little dust or noise generation. Company literature hails this project as the first worldwide to rely solely on in-situ mining.
Tucson environmentalist Roger Featherstone's concern about this technology - which Bell Copper may try in Miami - centers on what mining companies say is the key to preventing groundwater pollution. When the acid is injected into the ground, the mining company rings the acid injection well with four other wells, to pump out all the acid so the groundwater isn't fouled.
Underlying that scheme is a company's belief that its knowledge of the water table is so thorough and the well casings so solid that nothing can leak out or cause problems, a belief Featherstone calls unrealistic. "By definition, in-situ mining is pollution of the water table. There is no other way around it," he said.
Local opposition to this mine is also active, with residents having sent 200 letters and e-mails against the project to town officials.
In a staff report last summer, the Florence Planning and Zoning Department said a copper mine would be in direct conflict with surrounding existing and planned future homes. A mine, which would pay lower taxes than homes on similar acreage, would create negative fiscal impacts, reducing tax revenues that the town could have collected for parks, libraries, police and fire stations and the like, the department said.
With such concerns staring them in the face, in August the company withdrew a request for an amendment to the town's general plan, pushing a City Council vote back until November 2011. Said Rustyn Sherer, the company's spokesman, "We wanted to allow more time to build community support."
The Miami proposal has drawn a warmer local response, particularly compared with the frosty reaction the Town Council gave Occidental in the 1970s. It passed an ordinance banning mining in most of the town. But federal courts later tossed the ordinance out as unconstitutional.
On Dec. 21, the company made its pitch to the Town Council in front of a packed house, and the community response was more positive than negative, said Mayor Rosemary Castaneda, a lifelong Miami resident who expects a letter of support from the council soon.
"I think that we have a responsibility for the safety and health of people in this town. On the other hand, you know, we've gotta survive," Castaneda said.
DID YOU KNOW
Ten of the 16 largest copper mines in the United States are in Arizona, says the U.S. Geological Survey.
The biggest of those is Freeport McMoRan's Morenci mine, which ranks second among all U.S. mines to the Kennecott Copper Co.'s Bingham Pit mine near Salt Lake City, Utah.
The Morenci mine has the capacity to produce about 440 tons of copper and molybdenum annually.
Contact reporter Tony Davis at firstname.lastname@example.org or 806-7746.