Scenic AZ areas part of surge in land filings

Metal, mineral prices spur a boom in mining claims
By Tony Davis
Arizona Daily Star
Tucson, Arizona | Published: 12.05.2006

Interest in starting mines in Arizona has skyrocketed because of rising metal and mineral prices, leading to a sharp increase in the number of land claims filed in the state in the last 3 1/2 years, according to an environmental group's study.

The claims have been most concentrated in Northern and Central Arizona, particularly in the Grand Canyon, Wickenburg and Superior areas.
But companies and individuals have filed claims seeking mining rights across some of Southern Arizona's most mineral-laden and scenic areas: near Patagonia, west of Tombstone, the Santa Rita Mountains, north of Oracle Junction, near Safford, in the Altar Valley southwest of Tucson and near the Baboquivari Mountains.

The possibility of more mines in the state raises the prospect of more jobs, more environmental conflict and more efforts to change the long-debated federal 1872 Mining Law.

In a new study, the Environmental Working Group, an environmental research and advocacy group, says it found that companies and individuals filed claims in Arizona on 208,000 acres of Forest Service and Bureau of Land Management land from January 2003 through September 2006. That's more than the combined areas of Saguaro and Petrified Forest national parks.

The total number of federal land claims in Arizona rose by nearly one-third in that period to 32,868, the study found. The working group's study found increases in claims in most states across the West.
The rise in metal prices that triggered the claims has been fueled in part by the sinking dollar and greater demand for metals from growing countries like China and India. For example:

-- Copper prices have risen from 70 cents a pound four years ago to more than $3 a pound.
--Gold prices topped $650 an ounce this week compared with $257 in 2002.
--Silver hit a 25-year high of $15.17 an ounce last spring, before settling in the $14 range.

The Pima County Board of Supervisors was scheduled to vote today on whether to recommend a plan to mine in the Santa Rita Mountains by Canada-based Augusta Resources. The company has filed claims on 18,000 acres of Forest Service land. But County Administrator Chuck Huckleberry is recommending a delay until Jan. 16 - the third such delay - to give the company time to respond to his office's questions.
By themselves, land claims don't mean mines will open right away. The new copper mine that Phelps-Dodge Corp. will open near Safford in 2008 has been in the works for a decade.

As few as 10 percent of all claims become mines, said Al Burch, manager for mineral and renewable resources for the Bureau of Land Management in Arizona. But ultimately, more claims could lead to more mining, said Madan M. Singh, director of Arizona's Department of Mines and Mineral Resources, and Ken Vaughn, who chairs the Arizona Mining Association's communications committee.

"But mines aren't developed until there is significant opportunity for public input through an environmental impact statement or other means," said Vaughn, Phelps-Dodge's communications manager.

Environmentalists greet new mines skeptically, although it's not clear if they would oppose every one, said Roger Featherstone, a Tucson activist with the Earthworks environmental organization.
Vaughn said the industry is improving its environmental performance. He pointed to the new Safford mine as one that will have a "zero-discharge" philosophy to keep all air and water emissions from leaving the site.

Mining companies in Arizona are performing regular reclamation work, he said, such as tailings capped in Clarkdale, slag piles being recontoured in Miami and creation of ponds at the Phelps Dodge Copper Queen branch in Bisbee.

The increase in claims could boost Arizona's already recovering mining job market, various officials said. Mining, which in the 1960s employed 3.9 percent of the state's work force, is now down to about 0.25 of 1 percent of the work force, according to Marshall Vest, director of economics and business research at the University of Arizona.
But the 7,300 jobs in the industry in September 2006 are up from 5,700 a year earlier and 5,400 in 2003, although far below 22,000 in 1981, he said.

Mining economist George Leaming of Marana pegs the employment figure higher - at 6,900 in 2005 - because his figures include employees in mining-company corporate offices or in smelters. A copper worker's $59,400 average annual salary exceeds the statewide average in manufacturing by 12 percent, Leaming found.

But because of the mining industry's boom-bust nature, unemployment rates in mining-dominated counties nationally were typically higher and income growth typically lower than in non-mining counties from 1980 through 2000, said a study for the New Mexico Bureau of Mines.

Environmentalists hope the increase in claims will spur more congressional interest in overhauling the federal 1872 Mining Law, which both environmentalists and mining companies agree needs updating.
The two sides can't agree on how to update the law. It has survived attempts at reform in the 1970s and the 1990s. Another effort is likely to occur next year under a Democratic-controlled Congress.

As the law now stands, mining companies, unlike counterparts in the oil and gas industries, pay no royalties for mining on federal lands, only an annual fee per claim of $170 for the first year and $125 afterward.
Environmentalists favor an 8 percent royalty, creating an abandoned-mine cleanup fund and giving the federal government discretion to rule that an area is unsuitable for mining.

Currently, outside of national parks, wilderness and other preserve lands, the federal government cannot stop mining outright, but it can reject a specific plan if it doesn't meet environmental standards.
The American Mining Association, however, said it opposes a royalty because it doesn't allow companies to deduct many of their costs in developing mines. It supports having companies pay fair market value for mineral rights, said Carol Raulston, an association spokeswoman.
Bill Walker, the Environmental Working Group's West Coast vice president, said the claims increase is troubling, "in the sense that U.S. mining laws are woefully out of date and inadequate to protect our public interest and our public lands."

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