Over time, as the deposit is mined, the land above it will start to sink. No one’s sure how much. Models suggest that for every 100 feet of ore that’s mined, the surface could subside 30 feet. Which would mean that by the time the mine is depleted, after about 50 years of production, there could be a crater in the ground 2 miles across, and 1,000 feet deep, right on the edge of one of the country’s largest national forests.
The deposit sits directly beneath about 2,400 acres of what had been national forest land. Rio Tinto spent a decade trying to gain access to the land. It couldn’t just buy it from the government; it had to swap for it. At the end of 2014, a group of lawmakers tucked a rider into a military spending bill that transferred the 2,400 acres above the copper deposit to the mining project. In return, the U. S. Forest Service got 5,300 acres of conservation land that Rio Tinto spent more than $18 million buying up. The land was selected by the Forest Service and environmental groups to be comparable to the parcel traded to the mine. In January, in a bid to stop the mine from going forward, the National Park Service applied to add the land given to the mine to the National Register of Historic Places. On March 2, House Republicans began investigating the Park Service’s move, requesting documents from the departments of Interior and Agriculture. Despite the wrangling, this month the federal government will begin the formal regulatory review of the Resolution mine, which could take two to three years.
So far, all the work on the mine has been exploratory. Rio Tinto doesn’t expect to get the permits to begin removing copper until about 2020. By the time the first ounce of copper is produced, the company and partner BHP will have spent more than $7 billion on the Resolution project— an amazing sum given the sorry state of the mining industry. After a decade of high prices led to big investments in mines all over the world, there’s now a glut of metal on the market. Prices have crashed: Copper is 50 percent cheaper than it was in 2011, and mining companies have lost billions of dollars in value. Mines are shutting down. Layoffs are rippling through the industry, from the U. S. to Australia, as the giant companies try to slim down in the face of the steepest decline in metals prices in a generation.
Rio Tinto, based in London, has managed the downturn reasonably well, thanks largely to aggressive cost- cutting under Chief Executive Officer Sam Walsh. Since January 2013, he’s sold off $4.7 billion in assets, including some of its costliest mines, and reduced capital spending 50 percent. In December he announced pay freezes for the entire company in 2016.
The U.S. has some of the largest-known resources of mineral deposits in the world, yet they’ve become harder and harder to extract. The permitting process alone can take a decade. The mining industry likes to point out that, since the 1990s, the U.S. has fallen from 20 percent of the world’s mineexploration spending to 8 percent. That’s left the U.S. with an array of older mines that tend to have higher costs, since the deeper you have to dig, the more expensive it becomes. So mines go in waves, opening and closing, sometimes for years at a time, pulled by the volatility of commodity markets. Over the past three decades, there have been three big downturns—the early ’80s, the mid-’90s, and this one.
Seppala has ridden each wave, and this is the second time he’s worked at the Resolution site. He got his first job at the Magma Superior mine back in 1977, just as No. 9 was being completed. He was fresh off a full ride at the University of Arizona mining program. “They were giving out scholarships to anyone willing to go into mining,” he says. After copper prices collapsed, Magma Superior shut down in 1982. Seppala eventually moved his family to Indonesia to work in a Freeport Mcmoran mine. “That was a rough camp back then. That was out in the jungle.” His wife came back to Arizona after a year. “She said I could do what I wanted.”
He came home and eventually landed at a mine in San Manuel, about 40 miles north of Tucson. That mine used an underground block- caving technique, blasting and mining the ore in big panels at different angles, as Resolution will do. Seppala prefers this to open pits. “The challenges of the engineering are what make it fun,” he says. “Open pits are just bigger and faster. I call it large-scale gardening.”
Bravence worked as a drift miner at Magma Superior from 1991 to 1995. A drift is when you dig sideways, chasing the final remnants of a vein of copper that runs into the mountain. This is how people get crushed. Critical to a lateral hole are the timber braces that hold it up. Bravence was a timber repairman for several years. He’s spent half his life crawling around underground. “I’m paying for it now with the absence of a lot of really good shoulder muscles,” he says. “It’s a young man’s game.”
Over his career, Bravence has had eight colleagues get killed underground. Seppala has worked with more than 20 who died on the job. They call that hitting the jackpot. “Lots of jackpots,” Bravence says. “That’s just when bad things happen. Top to bottom I’ve seen a lot of crazy stuff. It’s always heavy and dark and wet underground, so nothing’s easy.”
Sinking a mine shaft follows a strict sequence of events: drill, blast, muck, repeat. The machine that does it is a 50-ton, 60-foot-tall tubular cage called the Galloway. Nested inside
Supply is forecast to exceed demand over the rest of the decade, as China slows infrastructure and construction spending, and other developing economies follow suit.
Average copper price per ton
World copper production, tons
2020 world copper demand, assuming … 3% growth 2% 1%
If most of the announced projects are completed, copper consumption wouldn’t match production
it are a pair of drills that bore a series of holes into the rock, each one 10 feet deep and 2 inches around. The holes are then packed with explosives, and the Galloway is raised a few hundred feet, to a safe distance. When the crew triggers the detonation, they feel the concussion reverberating up the shaft toward them before they hear it. The smoke clears after about 45 minutes. Then the Galloway is lowered back down, and a pair of mechanical arms with giant claws attached to the bottom “muck” up the rubble from the blast. A layer of sprayed-on concrete is applied around the edges of the shaft. More holes are drilled, dynamite is laid, and the Galloway rises again.
At No. 10 it took about three years to dig down to the first substation, 4,600 feet beneath the surface, at an average pace of about 10 feet a day of finished concrete tube. “We were high- balling,” Bravence says. “Blasting three to four times a week and pouring concrete three times a week.” Then came the water. By January 2013, work had slowed almost to a standstill.
The crew spent six months trying to ward it off. They stuck grout and even burlap into crevices. Nothing worked. They eventually installed the pumps. “We never did contain the water. So we just pushed it out of our way and mined through it,” Bravence says. He’s confident No. 10 is the most difficult mine shaft ever dug in America. “We were doing things that hadn’t been done at that depth. The heat, the water, that’s what made this shaft different from any other,” he says. It’s also the dirtiest one he ever worked in. Bravence went home covered in red every night from all the hematite in the rock. “You’d take your shower, and you’d do the best you could getting clean, but after a couple days the wife would be screaming at you, because your sheets would be red. So we never had white sheets. We just got red ones. That’s just a miner mentality.”
Back at the surface, Seppala exhales as we climb out of the cage. “Even after all these years working underground, no matter how little time I spend down there, it always feels good when you hit the collar,” he says. “It’s hard to explain, just a feeling I get.”
“It’s when the beer tastes the best,” Bravence says.
The edge of the San Carlos Apache Indian Reservation is about 20 miles east of No. 10, and the tribe is an adamant opponent of the mine. The Apaches claim the land beneath the Tonto National Forest is sacred to them and that the mine will tap and possibly contaminate their reservation’s water supplies. Andrew Taplin, Resolution Copper’s project director, has tried to assure the tribe that this won’t happen. “It’s absolutely physically impossible for us to impact their aquifers or surface water,” he says. “We are 20 miles apart and on different aquifers that are part of different basins.”
Resolution Copper employees have attempted to engage with the tribe and hold information sessions on the reservation, but without much luck. “For 10 years we have not had access to the reservation,” says Taplin. “We have not been permitted onto the reservation to provide our side of the story.” Last year, however, a handful of Resolution community-relations employees, after months of negotiations, were allowed to hold an information session at a casino on the reservation. “It took us years to get that invitation,” says Victoria Peacey, who handles the permitting process and external affairs for Resolution Copper. “The casino went out on a limb by having us.” Along with discussing water issues, Peacey tried to focus on the economic benefits of the mine during her presentation at the reservation, which is home to 15,000 people and has an unemployment rate close to 70 percent.
In early December, Jean-sébastien Jacques, chief executive of copper at Rio Tinto, visits the mine. His trip had been planned for months, but at the last minute, an Apache tribal leader agrees to visit the mine with Jacques. Before going underground, Jacques and Taplin take him aside and draw a sketch on a white board, demonstrating the underground geology in an attempt to convince him that the mine won’t interfere with the San Carlos water supply. Afterward, in a car ride to a nearby drill site, Jacques describes the meeting. “In the end, the people that will grant us our license to operate are the local communities, and we have to be their full partner.”
The Rio Tinto executive has brokered deals like this before. In October 2014 he invited Mongolia’s prime minster- elect, Chimediin Saikhanbileg, to dinner at his Holland Park house in London. Negotiations had been stalled over Rio Tinto’s attempts to expand a large gold and copper mine in the country. Finally, at dinner, Jacques’s 9-year-old daughter charmed the Mongolian leader by asking him to sign her geography homework. “My cheeky little monkey,” Jacques says with a smile, still amused.
Over the past few years, Resolution has drilled more than 100 holes to test the size and composition of the Arizona copper deposit. Each test hole, about 6 inches in diameter and thousands of feet deep, costs more than $1 million. At a drill site down the hill from the mine entrance and on top of the ore body, Jacques is given a progress report. Walking over, he reflects on the complications of mining: “It’s actually quite simple, really. It’s a capital business. So we sink $5 billion into the ground, and the sooner you get the cash out, the better it is.”
By the drill rig, a geologist produces some recent core samples that had been pulled from the hole. Pointing to some metallic-looking spots on the tubular rock, the geologist explains that recent samples had shown copper concentrations as high as 3.5 percent. Jacques smiles and puts his finger to his ear. “I can hear the money.” <BW>