Study: Costs cut benefits of new mine

An economic study by a Sonoran Institute economist on the proposed Rosemont copper mine concludes there will be economic benefits from the mine, but they may be greatly outweighed by economic costs within Pima and Santa Cruz counties.

The new study, which looked at mining economic cost-benefits in the Santa Ritas and Patagonia Mountains from new mining, was contracted by anti-Rosemont non-profit Save the Scenic Santa Ritas.

The study does not address potential impacts of mining other nearby properties that Augusta Resource Corp., the parent of Rosemont Copper Co., is exploring, nor the economics of the controversial 1872 Mining Act that provides the company access to public lands.

Study author Josef Marlow, a mineral economist, said: “We did this to inform the debate. Although we were contracted by Save the Scenic Santa Ritas, that doesn’t put us in their pocket nor bias us. We have no position on this mine, nor on reform of the 1872 Mining Act.”

Marlow cautioned, however, that “the potential economic benefits of this mine are small compared to potential significant economic risks. People need to inform themselves on these risks.” He added that studies, such as one written by veteran Arizona mining economist George Leaming for Rosemont Copper on benefits last summer, “stress only the positive aspects of salaries, sales and taxes.”

Rosemont Copper Vice President Jamie Sturgess said the study was narrowly focused and misleading.

“The study seems to completely ignore all of the non-payroll benefits of the Rosemont project,” Sturgess said “There are the 500 direct jobs at the mine, but the study ignores the 1,200 additional jobs providing goods, services and supplies.

“The study disregards tax benefits to state, federal and local governments,” he added, “and the study conveniently overlooks the strategic and economic national and regional benefits of a domestic

copper supply, high-paying jobs that can not be exported, and the

traditional cultural mining heritage so important to residents and workers in the southern Arizona region.”

In his analysis for Rosemont, Leaming portrays the economy as static, Marlow said, and uses “multipliers” to suggest that a job at the mine means two in the local economy.

“Many purchases are made outside of the local economy, workers may be from here or come here, and frankly, it’s hard enough to avoid conjecture and stick with facts,” Marlow said.

For example, said Marlow, “you have to see how else land would be utilized if it were not mined, which is implicit in looking at the tourism industry. If you utilize projections of employment that Augusta has presented, it suggests an average payroll in excess of $14 million annually.

“Tourism was estimated in 2006 as bringing in $2.95 billion to the area. If we lost 1 percent of that revenue as a result of an open-pit mine, that would be about twice the Rosemont payroll.”

Sturgess said the Sonoran study’s fears of tourist reductions are unsubstantiated.

“Mining communities such as Tombstone, Bisbee and Jerome provide excellent positive examples of increased mine-related tourist visitors and revenues in Arizona,” Sturgess said. “Tourists are interested in mining, and it’s a key component of this area’s long and rich history.

“Were the Tucson Gem and Mineral Show visitors and their economic impacts even considered in the Pima County data analysis?” Sturgess asked. “It’s hard to see any tourism reductions there, since mine tours are so popular with that sector of tourism visitors. I have no doubt that the Rosemont Copper mine will actually increase the number of visitors to this area.”

Much of the Sonoran Institute study lays out many of the economic arguments that mine opponents have presented: that Pima and Santa Cruz county draw little overall economic benefit from mining compared to government, service, clean manufacturing, and especially retirement and tourism. Scenic Highway 83 would become dangerous to drive with 600 trucks a week on it: polluted, hard to commute and expensive to maintain.

Politically, few politicians have come out publicly on Augusta’s side, and this latest study will fuel the public-relations war between Augusta, which frequently touts the jobs and patriotic value of a new U.S mine, against opposition based on what Marlow terms an “amenity economy” that sees landscape, freedom from pollution and quality of life as prime values.

The Sonoran Institute study is available at www.Sonoran.org.