14 minute read
Arizona Mining
WHO’S THE BOSS?
Arizona’s mining industry fuels the economy as it fulfills the future demand for copper and other minerals
By ERIN THORBURN
If you ever watched “Undercover Boss,” then you know the show’s premise involved wealthy executives posing as entry-level employees. Moguls like Steven Cloobeck, founder and former chariman of Diamond Resorts, and Mitch Modell, president and CEO of Henry Modell & Company and of Modell’s Sporting Goods, disguised themselves, later revealing their true identities. In the process, they often financially assisted or gifted employees in need. Mining is very much like an undercover boss. At first glance, it looks kind of familiar, but it’s not recognized as something particularly powerful. But, after closer inspection, what you come to realize is mining is a true boss for Arizona’s economy. In fact, in Arizona, mining packed a $15.4 billion economic impact in 2020. Now, that’s a boss move.
Copper helps drive demand and dollars
In addition to being a key fiscal driver, Arizona mining is a job producer, highwage generator, and tax revenue creator.
“According to the National Mining Association, the U.S. mining industry, directly and indirectly, employs more than 1.5 million individuals paying in excess of $95 billion in labor income,” says Norm James, director of natural resources for Fennemore Craig.
In 2020, the mining industry generated close to 48,000 direct and indirect jobs in Arizona. And mining jobs are among some of the highest earnings in the state, with an average wage of $81,000 per year — compared with an average wage for all workers in the United States of $59,000 per year.
If you’re wondering what makes Arizona mining an economic impact gangbuster, there are several reasons. And one of the most prominent is copper.
“The future demand for Arizona copper and other needed minerals will continue to escalate,” says David Kimball III, shareholder for Gallagher & Kennedy, “due not only to the dramatic increase in global demand for electric vehicles and other green energy technologies, but also for the needed infrastructure that enables the harnessing green power.”
Earlier this year, GM announced that it aims to stop selling petrol-powered and diesel models by 2035, and Audi had a similar proclamation targeted for 2033. According to Kimball, Zimtu Capital Corporation recently reported, “electric vehicles will require on average of approximately 83 kilograms (183 pounds) per manufactured vehicle, an increase of 277%, or three times more copper than for traditional vehicles.”
Norman D. James David Kimball III Brad Ross
EVs and their other green-technology counterparts, however, are only a small sampling of copper use and demand.
Copper is also sought in the medical field for its antimicrobial characteristics. In national defense, it’s critical to aircraft and advanced weaponry. And commercially, copper can be found in smartphones, tablets, and other mobile devices.
“Today the world uses 10 times as much copper per year than it did in 1950, and that number is increasing with the population and the demand for green energy technologies,” Kimball says.
And if you’re wondering how Arizona measures as a copper producer compared with the rest of the world, the U.S. is the fourth-largest copper-producing nation (in 2019) with Arizona (in 2020) accounting for 74% of total national copper production.
Demand for minerals maintains an upward trajectory
While it’s clear mining has and currently is essential to supporting Arizona’s economy, will it continue to be looking forward to the next five years, 10 years? Yes.
Mineral demands are expected to grow as much as 1,000% by 2050. And going back to EVs, much of this demand will come from automakers, which plan to spend $300 billion globally to produce new EVs over the next decade.
Additionally, points out Dr. Brad Ross, interim director for the University of Arizona’s School of Mining and Mineral Resources, “The Infrastructure Investment and Jobs Act makes mining even more critical to Arizona’s economy.”
In the next year, according to Ross, construction will begin on a wide variety of projects that range from roads and bridges to airports and railroads. Mining will be called upon to supply the basic materials of sand, gravel cement, and rock products to make these projects possible and bring billions of dollars into the state.
Could challenges slow supply?
While future demand is clear and steady when it comes to the need for minerals, the supply chain outlook is less so.
“We seem to be making mining more costly and difficult,” James says, “rather than supporting the industry and ensuring that our future supply of minerals will be secure.”
And, the reason for uncertainty in securing the minerals needed — even crucial ones such as the 14 minerals deemed critical by the secretaries of defense and the interior — is somewhat of a Catch-22, according to James. “Mining in the United States is among the most heavily regulated industries in the world,” he says. “Too often, critics of mining point to mines that operated many decades ago, when environmental standards and enforcement were largely non-existent, to argue that mining should not be allowed.”
Additionally, permitting delays pose a risk to many U.S. mining projects. “Because of the extensive nature of regulation, and as well as litigation by opponents of mining, it takes about 10 years to obtain the permits needed to operate a mine in the United States,” he says.
Despite the challenges, however, Arizona mining will likely continue to covet its deserving status as an economic boss.
After all, as Kimball so perfectly states, “We know if it can’t be grown, it must be mined. Contributions to the Arizona economy from the Arizona mining industry should increase over the next year, five years, and into the next decade as the demand in mined goods for electric vehicles and other green energy technologies escalates.”
USES OF COPPER Copper has countless applications in business and in the lives of individuals. These are just a few examples of copper’s essential uses.
MOBILE COMMUNICATIONS
• Smart phones, tablets and other mobile devices contain copper circuitry. • The network towers used to transmit wireless signals also use copper.
MEDICAL CARE
• Antimicrobial Copper continuously kills bacteria on surfaces such as hospital bed rails. • Diagnostic imaging systems and certain surgical instruments contain copper components.
NATIONAL SECURITY
• From aircraft to advanced weaponry, copper keeps our military strong. • Copper is considered to be a “strategic and critical mineral” in the DoD’s 2015
Report on Stockpile Requirements.
TRANSPORTATION
• The typical vehicle has approx. 50 pounds of copper. • Copper is used in brakes, vehicle electronics, emissions controls, and wiring systems.
RENEWABLE ENERGY
• Copper is essential for solar photovoltaic systems. There are approx. 5.5 tons of copper per MW in photovoltaic systems. • Copper is heavily used in wind turbines; found in generator coil windings, highvoltage power cable conductors, transformer coils and grounding equipment.
TECHNOLOGY
• Copper is present in major advanced economy technologies ranging from integrated circuits to batteries to electromagnets.
CHANGING MISCONCEPTIONS
Mining leaders aim to correct prehistoric views of environmental practices as the future success of green economies depends on the industry
By ERIN THORBURN
It’s safe to say that this may be the only piece of journalism to analogize
mining’s environmental impact with Britney Spears. Yet, can we mostly agree that both have faced their fair share of public scrutiny? And, while some barbs may be deserving, others are simply unfair — even unsubstantiated? It’s likely true that before they knew better, both may have made mistakes along the way. But, have they learned from their mistakes? While perhaps the jury is still out in the case of Spears, research demonstrates that the mining industry certainly has learned its lessons. Not only has the mining industry made improvements in environmental protections, but progress has also led to valuable, lasting sustainability and green energy efforts.
Norman D. James David Kimball III
Hit me baby one more time — with the truth about environmental regulations
The truth: There was a time when mining wasn’t as safe and clean as it is today. But despite the progress that’s been made in mining environmental safety, advancements in public awareness have not been as progressive. Dated perceptions have — and remain — challenging to overcome.
“Mining in the United States is among the most heavily regulated industries in the world,” says Norman D. James, director of natural resources for Fennemore Craig. “Too often, critics of mining point to mines that operated many decades ago, when environmental standards and enforcement were largely non-existent, to argue that mining should not be allowed.”
And here’s another truth: In addition to being heavily regulated by a number of local, state, and federal laws protecting public health, welfare, and the environment, the modernization of mining has rendered many irresponsible, unsafe mining practices obsolete.
“Modern mining in Arizona employs highly sophisticated mineral recovery and computer technologies that maximize mineral recovery while minimizing impacts to the environment,” explains David Kimball III, shareholder for Gallagher & Kennedy.
And, as Kimball points out, mining operations aren’t relegated to environmental regulatory processes solely during the active phase, but also they are also regulated after mining operations cease — including mine reclamation requirements to ensure beneficial postmining land use.
— David Kimball
Stronger (and smarter) mining processes
Mining in the U.S. has come a long way since its commercial inception in the 19th century, as have environmental awareness and initiatives. Within the last couple of decades, focus of improvement in mine regulations has been accompanied by a greater need for environmentally-friendly mining processes and implementation of newly discovered and innovative, green mining technologies.
“The top initiatives in Arizona mining,” says Robert Winton, senior vice president and general manager of Excelsior Mining Corp., “are focused around water usage and means of reducing the impact on Arizona’s aquifers.”
According to Winton, Excelsior’s project at Gunnison is a prime example of this initiative being impacted in a mining operation. “Excelsior uses an In Situ Leaching (ISL) process, which is a closed-loop system that largely recycles water, thereby significantly reducing water consumption over conventional mining techniques and provides a road map for future projects in the state,” he says.
Winton provides another example of ISL use in Taseko’s Florence project to reduce mining’s impact on the water supply.
“The larger-scale projects that utilize more conventional mining techniques are looking to utilize improved tailings management,” Winton says, “such as dry-stacked tails, etc., for reducing their water consumption through the life of their projects.”
Together, these two ISL projects offer a significant reduction in dust, noise, and light as compared with conventional open-pit copper mining.
Toxic views of mining mitigated through education
One of the best ways to help alter archaic ideas about mining and environmental impact is bolstering education.
“Only by breaking through traditional disciplinary silos and taking an untraditional approach to curriculum can we equip students and professionals alike with the broader, more sophisticated knowledge and skills required of the workforce of the future,” says Dr. Brad Ross, interim director for University of Arizona’s School of Mining and Mineral Resources.
Those at the helm of UArizona’s School of Mining and Mineral Resources are doing their utmost to accomplish their mission and disrupt traditional education pathways by what Ross describes as implementing, “innovative curriculum that keeps pace with change and leverages the best subject matter experts, wherever they are.”
Additionally, the mining school’s Innovation Hub is designed to cultivate opportunities to “attract, inspire, and connect the brightest minds and provide the framework necessary to stimulate collaborative problem-solving around the issues that matter most,” Ross says.
Radar: What’s the future outlook for mining?
At this point, Britney’s future may be more discernible than the mining industry’s. While Britney’s conservatorship has been lifted, Arizona mining projects continue to face delays and impasses that make the state’s mining outlook less clear.
“Mining in Arizona faces an uncertain future,” James says. “There is a tremendous push to restrict mining in the United States by withdrawing or banning mining activities on federal land and by imposing increasingly complex regulatory requirements that increase project costs and cause additional delay.”
The Biden administration, for example, has rescinded the Final Environmental Impact Statement for the Resolution Copper Project, leaving that project in limbo. Mining is also banned or restricted on more than half of all federal public lands, according to James, making mineral resources on those lands off-limits to production.
Yet, in an ironic twist, the green economies the world aspires to develop can only succeed through materials Arizona mining produces.
“The future demand for Arizona copper and other needed minerals will simply continue to escalate,” Kimball says, “not only due to the dramatic increase in global demand for electric vehicles and other green energy technologies — wind, solar and energy storage — but as well as the needed infrastructure that enables harnessing green power.”
With the said, “It is incumbent on the state and its citizens to support this future, as we will be able to produce these materials more sustainably and environmentally conscious as any other jurisdiction in the world,” Winton says.
SAFETY
FIRST New Arizona mine inspector places a high premium on safety and aims to take office to the next level
By ERIN THORBURN
Meet Paul Marsh, Arizona’s recently appointed Arizona state mine inspector.
“Paul Marsh has over 25 years of industry experience and will bring a wealth of knowledge to the position,” says Gov. Doug Ducey. “He is a proven leader with strong communication skills and a history of working with safety standards and regulations.”
Marsh joins an impressive lineage of mine inspectors dating back to 1912, when the position was first established. Previously, Marsh served as the ready mix operations manager in the Phoenix fivision for CalPortland Company, and before that, director of safety for CalPortland Southwest Region. Beyond his career experience, Marsh’s deep knowledge and commitment to safety protocols and standards also no doubt stems from his time operating heavy equipment in the United States Marine Corps. Az Business sat down with Marsh to learn more about his experience, goals, and outlook as Arizona’s incoming mining inspector, and to get a glimpse of what’s ahead for the state’s mining industry.
Az Business: Tell us a little about your background and career.
Paul Marsh: I started in 1994 at a small sand and gravel mining company as a laborer and equipment operator. I continually worked my way up through the ranks to management. I have been in mine safety since 2004, earned my Certified Mine Safety Professional (CMSP) credentials in 2015, and am a Blue Instructor Cardholder. I have successfully held positions in the past as director of safety and operations manager.
AB: What are you looking forward to the most in your new role?
PM: I look forward to bringing the Arizona State Mine Inspector’s Office to the next level. With my leadership, knowledge, and experience, we will continue to build upon the strong foundation that already exists.
AB: What would you say have been the most compelling
transformations in mining that you have witnessed throughout your career?
PM: I have seen a tremendous change in safety culture and overall safety in the mining industry. The days of “old school safety” are gone, and through required training, miners know they have a right to a safe workplace and that they can stop production when needed.
AB: With many automakers pledging to convert to all-electric vehicles — which will increase the demand for copper and other metals — how do you feel Arizona’s economy will be impacted?
PM: Arizona currently produces 68% of our nation’s copper, and I believe Arizona will see tremendous growth as we convert to all-electric vehicles. All-electric vehicles use more than three times the amount of copper used in current vehicles. A current gas-powered car uses approximately 50 pounds of copper versus an all-electric vehicle using over 180 pounds. One study suggests that there will be a six percent increase in global copper demand in the next 10 years due to electric vehicles alone.
AB: How do you view the current state of mining in Arizona?
PM: The current economic state of mining in Arizona is good, with Arizona ranked No. 2 for non-fuel mineral production in the United States in 2020. Furthermore, the entire mining industry in Arizona has a $20 billion total economic impact, and supports nearly 75,000 total jobs.
AB: What initially enticed you to have a career within the mining industry?
PM: I am a veteran who operated heavy equipment in the United States Marine Corps. Initially, I was just looking for a job that utilized my skills as an equipment operator, but quickly realized the opportunities available in the mining industry. It is amazing what you can accomplish with hard work and dedication.
