Confidence in the sustained economic growth of China and India and its effect on prices for Arizona’s copper is continuing to revive and expand the mining industry in Southern Arizona.

To further emphasize a company commitment to Tucson and its surrounding mines, metallurgy and mining engineering company Aker Kvaerner is expanding again, adding a second, 13,730-square-foot, building on North Dragoon Road. Bringing its total leased square footage to more than 30,000, the company is providing space for an employee total of 100 or more, along with the equipment and supplies needed to support engineering and construction services for eight projects in Arizona.

Expansion of the nine-year-old Tucson operation began in January with announcement of a contract with Phelps Dodge for design work on the company’s Concentrate Leach Project in Morenci. Since then, Aker Kvaerner has leased a 17,000-square-foot building and moved its metals engineering staff from Houston, bringing the company’s current employment to more than 80, said Business Development Manager Guy Carraux.

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“When we first opened the Tucson site, some people said it was just a project office, but we’re proving them wrong,” he said. “We’ve been hiring on a regular basis, every week, and taking on more contracts. We’re definitely here to stay.”

Carraux said the value of their Tucson facility is in its proximity to Southern Arizona’s expanding mines. “There’s a lot happening here and we want to be part of it. By moving our offices here, we hope to be a long-term fixture in Tucson,” he said.

Expansion of the area’s mining and mine service business is not surprising to Diane Bain, spokeswoman for the Arizona Department of Mines and Mineral Resources. With copper prices now averaging $1.73 per pound, “people are feeling secure about making the investment in this industry.”

Bain said that security is sustained by the economic expansion in China and India, where demand for copper for construction keeps increasing. “People are also feeling better because we’ve used up our stockpiles. Now, if we’re going to meet the demand we’re going to have to produce it.”

Along with supporting growth of companies such as Phelps Dodge, higher prices and increasing demand is putting extra emphasis on curing the ills that have afflicted several mining and smelting companies, especially ASARCO (Arizona Smelting and Refining Co.), which announced the appointment of turn-around specialist Joseph Lapinsky as the company’s new chief executive officer.

A thirty-year veteran of the metals industry and former chief executive of Republic Engineered Products, Lapinsky negotiated that company through two Chapter 11 bankruptcies, moving Republic back to record profits.

He will be working with employees, creditors, the court and parent company Grupo Mexico to oversee ASARCO’s exit from Chapter 11. Doug McAllister, who served as interim chief executive, will be continuing with the company as executive vice president, general counsel and secretary.

In a first step toward the exit from bankruptcy, ASARCO announced the closure of high-purity specialty metals refineries in Denver and Globe, as well as transfer of the company’s share of a copper refinery in Amarillo.

There is also renewed interest in exploration, with Resolution Copper Mining, the BHP Billiton-Rio Tinto Group joint venture at Superior, attracting special attention, said Mike Barton, director of the Institute for Mineral Resources at the University of Arizona in Tucson.

“There are significant engineering issues involved in dealing with the heat and depth of any proposed mining operation,” Barton said, “but the projections are that it is one of the top five copper deposits in the world, with ore grades twice as good as what’s normal for Arizona and comparable to the best in the world.”

He said, “The consensus of opinion at the U.S. Geological Survey and elsewhere is that there will be a continued strain to meet global demand for copper. So, any mine offering the level of ore that this one could potentially offer is significant.”

Looking to the future, Barton said the greatest obstacle to continued growth of the state’s mining industry isn’t the amount of available minerals but a shortage of qualified personnel and a commitment to protect valuable mineral sites from urban growth. He said a serious shortage of exploration geologists and mining engineers is making it harder to find and extract metals. “That’s why most mining companies are developing new mines next to existing ones. There just aren’t enough people to go further out to discover and develop new opportunities.”

Also, he said, “as development goes on, a lot of ground with significant resources under the surface are being condemned for uses other than mining.” He said the Santa Cruz mineral deposit has been entirely removed from exploration and extraction because Pinal County rezoned the land for residential use.

“This is an issue that deserves more public consideration than it’s getting,” Barton said. New technologies attract more attention, but with several hundred billion dollars in copper deposits around the state, especially in Southern Arizona, mining’s value is more significant than it appears. “When copper, silver or gold prices are low, he said mining seems like a declining industry, “but it’s not.”

Barton said appreciating what mining can contribute, over time, is a matter of thinking about the impact from a long-term point of view. “From that perspective, geological resources could be providing a major and enduring contribution to the state’s economy for the rest of the 21st century and beyond.”

E-mail comments for publication to editor@azbiz.com. Contact Philip S. Moore at pmoore@azbiz.com or at (520) 295-4238.

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