The study released July 7 was done by the Seidman Research Institute at Arizona State University’s W.P. Carey School of Business. The $45,000 study was commissioned by the Arizona Department of Mines and Mineral Resources but Director Madan Singh said it was paid for by Rosemont Copper.
Lee McPheters, a professor in ASU’s department of economics, said that unlike research projects that might look at a single event, such as the Super Bowl, this study sought to determine the economic impact of the mine over time, from the first four years of engineering, design and construction, through about 20 years of production and five years of winding down.
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Beyond the direct spending by Rosemont will be the indirect impacts for goods and services to support the mine and its workforce, That will amount to a total economic impact of $745.1 million average per year for the 20 years the mine is in production, contributing $118.7 million a year in wages and $13.9 million annually to local governments.
When asked by Roger Featherstone of Earth First why the study didn’t look into what he said were some of the “negative impacts” of the mine, both McPheters and Singh said this study was kept strictly to looking at the economic impact.
“What we feel we’ve provided here is one piece of information that’s valid and reliable that then can be put up and evaluated against other information,” McPheters said. “This isn’t a study showing the plusses and the minuses.”
For his part Singh said he believed the study showed development of the mine would be an economic benefit to Southern Arizona’s long tradition of copper mining producing jobs with wages that would be 28 percent higher than the average wages currently in the Tucson region.
The study says the “Rosemont Copper Project would have lasting positive effects on the local economy as a result of the increased levels of economic activity associated with the development and operation of the Rosemont mine. Five years after ceasing production (around 2040) at the mine, economic activity would be $75 million per year higher and area residents’ income $37 million per year more than if the Rosemont Copper Project had never existed.”
The study used Rosemont Copper’s mine plan of operations and updated feasibility study done in January. All of the figures are based on 2008 value dollars. Another assumption used is $1.75 per pound for the price of copper. The New York Mercantile Exchange’s Comex last week was quoting July copper futures trading around $2.20 per pound with December futures at about $2.30 per pound.
McPheters said the study was done using a model developed by Regional Economic Models Inc. (REMI), based in Amherst, Mass., initially developed in 1980 to improve public policy decisions through regional forecasting models.
Singh said his department commissioned the study about four months ago. In light of the state’s budget deficit, the Department of Mines and Mineral Resources has been unable to wrangle funding to continue such economic studies. He accepted Rosemont Copper’s offer to pay for the study but he said it was done independently by ASU researchers.
Rosemont Copper is a division of Augusta Resource Corp., which acquired the mining site 30 miles southeast of Tucson in 2004. Most of the actual mining would be on land owned by the company but it needs to use U.S. Forest Service land for processing and storage. The Forest Service is in the process of developing a ruling on the mine that it expects to issue by July 2010. Rosemont officials say they are hopeful they can begin mining by 2011.
Among others, the Pima County Board of Supervisors has gone on record opposing development of the mine.
Contact reporter David Hatfield at dhatfield@azbiz.com or (520) 295-4237.
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