One of the sessions of the Legislative Finance Committee, which met at Western New Mexico University on June 12-14, featured the draft Copper Rules.
Tony Trujillo, Freeport McMoRan Copper & Gold Inc. staff, said: "On behalf of our 1,600 employees here, I welcome you to Silver City. Freeport McMoRan is the economic engine in this area. We have an impact on 4,300 jobs."
John Brack, New Mexico Operations vice president, said the company members present were wearing ribbons in respect to the 28 employees the company lost during an underground mine cave-in that occurred at their Indonesian operations.
"Freeport, as a copper company, is second globally only to Codelco in Chile," Brack said. "Morenci is our largest mine in the U.S., where we have 15 mines, with Chino and Tyrone in New Mexico. We are also big in the molybdenum business. We have operations in Peru and Chile in South America, in Indonesia, copper and gold, and in the Congo, with copper and cobalt."
Globally Freeport has 34,000 employees, and the company recently purchased Plains Exploration and McMoRan Oil and Gas.
"We, as a company, have two ways to grow," Brack said. "We can buy another company or we can expand within and explore for more copper. Our acquisition of oil and gas companies expands another avenue of income."
He reported, in the metal markets, which are heavily dependent on China, the recent price is down. Copper is also used in housing and the auto industry, "which are coming back. We love the solar industry."
Tim Eastep, Grant County operations manager, said the impact on Grant County is about $162 million, with $116 million directly from operations, and about $9 million from supplier purchases. "We have also contributed more than $1 million through the Community Investment Fund and to United Way."
"In 2008, the price of copper dropped below where we could make a profit, so we decreased employment," Eastep said. "Since the rebound, we have added 850 employees in the past couple of years. Between Chino and Tyrone, we produce 220-230 million pounds of copper a year and 3.5 billion pounds for the total company. We expect to increase production over the next couple of years."
He cited recent activities—in 2011, half the concentrator was brought online, with the rest coming online in 2012. "By the end of 2015, we will have the tankhouse full." He said the company is looking at permitting stockpiles, with one of the more significant permits being one with the U.S. Burean of Land Management to connect Chino and Cobre to haul ore to Cobre. "We also want to expand the pit at Tyrone's Little Rock."
"As for the copper rules, as a company, we are looking at a clear process, so we know what we have to do for the permitting process," Eastep said. "We can look at it to determine how to permit a new facility, for instance. This draft, yes, is more onerous, but it establishes comprehensive rules for us."
Trujillo gave some background on the rule. "In 2009, Senate Bill 206 gave the dairy and copper industry transparency, so we knew what we were doing. Now, it is all pending at the Water Quality Control Commission. We expect a decision in August. We support the Environment Department rules."
Eastep pointed out the rule set up the same process as is being used in the Bingham Canyon in Utah. "Chino's open pit at Santa Rita started in 1910," he said. "So it has been here well over 100 years. We had the concentrator built in 1911, and it lasted until we shut it down in 1982. We have modernized operations, using solvent extraction and electrowinning. Tyrone, at the beginning was primarily underground, until we went to the open pit in 1967."
Brack said Chino and Tyrone open pits have leaching. "We have a sequence of events before that. "We drill a nine-inch hole to determine where to go, and then we blast it. We use delays, so we have minimal vibrations and impacts. We load the ore into 240-ton trucks, using four shovels with 60 cubic-yard buckets at a time. Our slope monitoring is extensive. We have programmed photo arrays of banks, which survey. If any acceleration is detected, an alarm sounds to get people out of the way. Concentrating involves two types of processes. The concentrator crushing the ore, and then the wet process spins it in the SAG mill using steel balls. A ball mill makes the ore finer down to the consistency of face powder. Adding the ore to the flotation process takes .5 percent copper and turns it into 30 percent copper. The waste is shipped to the tailings, where the water is recovered and reused at the mine."
The solvent process is acidic and separates the copper, which is put in the top of the stockpile, making a pregnant solution. Exposing the ore to organics mixes it with the copper, which is stripped out, creating a rich electrolyte. Running a light charge on it gets the copper to plate out as copper cathode to a purity of 99.9997 percent, which is considered wire grade.
"We are part owners of the power plant in Deming," Eastep said. "We have done extensive reclamation in the county, including demolishing the smelter stacks and reclaiming the site. At Tyrone, close to 5,000 acres have been reclaimed or are being reclaimed. We have a $200 million financial assurance, which we can reduce as we reclaim. We have had it reduced by $70 million. We are wrapping up reclamation at Chino next year, with 2,000 acres reclaimed. For active Tailing Pond 7, we have $230 million financial assurance."
He showed photos of the Chino Mine overlook, "which we are proud of."
"We are very proud to be part of the three Cs of Grant County—cattle, copper and climate," Trujillo said.
Rebecca de Neri Zagal, Office of Natural Resources Trustee executive director, said the mission for the agency is to restore or replace natural resources that have been damaged by hazardous material or oil. "In New Mexico, we don't do oil releases, because there are no bodies of water near production sites."
The trustees were formed by federal statute and the members are five—the Department of the Interior, the Department of Agriculture, the Department of Energy, the Department of Defense, and the National Oceanic and Atmospheric Administration. "We have only one trustee in the state, Ryan Flynn, who sent his regrets. We are one dedicated agency for one purpose to restore or replace damaged natural resources. Sometimes, we overlap with federal agencies, and we frequently work with other trustees. Our funding is from the General Fund and in past years was from the Trustee Fund. It is used for planning and implementing damage settlements. We bring technical people together to get to end results. When we identify the range of injury, we sit with the responsible party and negotiate a settlement, which includes the assessment costs, then we implement the restoration."
"In the past many years, we have worked with Freeport," de Neri Zagal said. "We settled for $13 million for groundwater, as well as $5.5 million and a trade of 714 acres of unique habitat at City of Rocks for wildlife injury."
Restoration projects on groundwater include the San Vicente Creek Mill, and removing contaminated soils at the abandoned site. The trustee is also working on the Santa Clara wellfield and on sewer improvements to prevent spillage into Cameron Creek. In Silver City, the trustee is working on a sewer line extension to get people off septic systems and developing wastewater treatment to reuse the effluent for irrigation. In Bayard, faulty clay pipes in the sewer system are being replaced.
For the settlement for wildlife and wildlife habitat, the trustee expects the final restoration plan "soon. We were co-trustees with Fish and Wildlife Service. We anticipate beginning restoration at the end of the year."
Tannis Fox, New Mexico Attorney General's office assistant attorney, said she was attending the LFC meeting on behalf of Attorney General Gary King.
"Our office has been involved with the copper rule," Fox said. "The attorney general strongly supports copper mining and he strongly supports groundwater quality."
She said New Mexico's water resources are important, and groundwater takes on extra importance because surface water is limited. "Now, in the opinion of the attorney general, is the wrong time to loosen groundwater rules. The Water Quality Act protects groundwater. The WQCC requires 10,000 milligrams or less of pollutants in groundwater. Groundwater is protected under sites such as mines or dairies. However, the copper rule proposes to change and would undo protection of water under discharge sites."
She showed maps of the nine square miles under the Tyrone Mine, which would not be protected. "In the opinion of the attorney general, because it is not allowed under the Water Quality Act, the copper rule would set a bad precedent. The continuation of copper mining and the protection of groundwater are not mutually exclusive. Liners are one way to protect the groundwater."
Harry Browne, co-founder of Gila Resources Information Project 15 years ago, said: "We recognize mining plays an important role, and we advocate for responsible mining. Mining and the environment are not just compatible, but are mutually supportive. The mines should clean up messes without taxpayer dollars. Freeport is showing itself as responsible and doing a great job of reclamation. We differ on details. We oppose the new copper rules because they violate the Water Quality Act. The company promises to pump groundwater forever to achieve the prevention of pollution getting into the water. There is already contaminated groundwater. If the rules are diminished, then there will be more pollution. If the company goes bankrupt, and cannot continue treatment, within 150 years of no pumping, the contaminants will flow into the aquifer.
"Freeport enjoys billions of dollars of net income and gives special dividends of over $1 billion to shareholders," Browne continued. "Despite the profitability of the company, the Martinez administration believes the cost of groundwater protection will drive out the industry. We people are the ones who will decide whether we trade groundwater for tax dollars. We accept mining and a healthy environment."
Max Yeh, resident, said Freeport is successful, makes a profit, gives to charity and pays taxes. "It seems to me all the costs are borne by the people of New Mexico. Primarily the cost of water. About 21,000 acre feet of free water a year goes to Freeport. A pound of copper sells for $3.50, but it takes 60 gallons of water in the concentrator process. Potable water is not restored; it's polluted and has to evaporate off. $1 per gallon of water equals $60 going to Freeport to make $3.50 worth of copper. Freeport gives to the university and creates hundreds of jobs, with water costing $60 for one pound of copper. The process is depletion of natural supplies. I urge the committee to consider the costs of every project in relation to how much it takes in water costs."
The meeting was opened up to questions from the legislators.