![]() Workers at the Ray mine, Asarco's open pit copper mine near Kearny, say Grupo Mexico neglected operations and nearly shut down production. James Gregg/Arizona Daily Star
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Arizona Daily Star
Tucson, Arizona | Published: 07.23.2008
KEARNY — For more than three decades he has worked as a mechanic at the Ray copper mine.
But if the mine's current owner, Tucson-based Asarco LLC, is handed back to a Mexico City conglomerate, Charlie Estrada would walk away from the job he's held since he was 18 years old.
"I just can't see myself here," Estrada, 52, said Tuesday during a demonstration at the mine, about 70 miles north of Tucson. "There's better jobs out there right now."
Union officials say Estrada is among hundreds of miners, mechanics and smelter operators who say they would leave their jobs if Grupo Mexico is reseated at the helm of Asarco, the third-largest U.S. copper producer.
When Asarco filed for bankruptcy in 2005, the Corpus Christi, Texas, bankruptcy court and a creditors committee assumed control of the company, which Grupo Mexico bought in 1999.
On May 31, India-based Vedanta's subsidiary Sterlite Industries Ltd. made a bid of $2.6 billion to buy Asarco's operating assets and bring the company out of bankruptcy. Grupo Mexico was authorized to submit a reorganization plan to the bankruptcy court to compete with Sterlite's bid.
Tuesday's demonstration was in protest of that and was timed to coincide with site visits being conducted this week by representatives from Grupo Mexico.
Asarco workers were joined by retired colleagues and carried signs in English and Spanish saying Grupo Mexico is not welcome back in the community.
Grupo Mexico officials did not show up at the Ray mine during the three hours the workers stood guard at the entrance to the copper pit.
The mining giant, headed by one of Mexico's wealthiest families, declined to comment for this story, according to its New York City public relations firm.
Asarco workers say Grupo Mexico neglected the Southern Arizona mining operations and brought production to a near halt due to the lack of equipment upkeep and cash flow after vendors rescinded credit for non-payment.
Estrada remembered dismantling dormant machinery and mining trucks to keep other equipment running.
"It was all Band-Aid work," he said. "Morale was terrible, everybody was down. I'm not going through that again."
Asarco, with headquarters at 5285 E. Williams Circle, operates three mines and a smelter in Southern Arizona, as well as a copper refinery in Amarillo, Texas. It employs more than 2,000 people in Southern Arizona, ranking it 20th in this year's Star 200 survey of the region's biggest employers.
Last year Asarco reported revenues of about $1.9 billion.
Labor disputes led to a four-month strike in the summer of 2005 that ended after Asarco filed for bankruptcy protection and negotiated with the union.
Robert Manriquez, president of United Steelworkers Local 5252, said workers are not interested in giving Grupo Mexico a second chance.
"Having worked for them — knowing their mentality — I don't believe for one second they're a changed company," he said.
In fact, Manriquez said many believe Grupo Mexico's determination to once again control Asarco is to retain full stake in the lucrative Peruvian mines that it stripped away from Asarco in 2003. Those mines are now owned by a Phoenix-based subsidiary of Grupo Mexico, Southern Copper Corp.
Asarco is suing another U.S. subsidiary of Grupo Mexico for $11.3 billion, claiming fraudulent transfer of its interest in two of the world's richest copper mines.
If Grupo Mexico were to regain Asarco, it would drop the lawsuit against itself and keep full interest in Southern Copper, company lawyers told a bankruptcy judge last month.
Manriquez said the Arizona copper mines are of no interest to Grupo Mexico and the company could close them.
"We believe Grupo will shut down these properties and drive up copper prices because there will be more demand," he said. "This isn't about getting Asarco back."
The verdict on the Peruvian mine lawsuit is pending.
● Contact reporter Gabriela Rico at 573-4232 or grico@azstarnet.com.
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