Mon, Jul 06, 2009

Tucson Urban League CEO/President Finance and Accounting Charles E. Gillman Company Accounting Specialist Administrative & Professional Jorgensen Brooks Group Counselor Sales and Marketing Everready Glass Sales Reps Trades/Construction RANCHO RESORT MAINTANANCE POSITION Mechanical Komatsu Equipment Co Resident Field Mechanic BusinessLow production costs mean PD can recoup $550M expense fastARIZONA DAILY STAR
Tucson, Arizona | Published: 02.18.2007
The scale of the whole $550 million Safford mine project is enormous, and its centerpiece will be visible from town several miles away.
When completed in about 15 years, the Safford leach pad will be a geological feature in its own right, nearly a square mile at the base — or roughly the area covered by Reid Park and the zoo, ball fields, the Randolph Golf Complex and the nearby Colonia Solana neighborhood in central Tucson. It will also be more than 650 feet high at its peak — about 2 1/2 times the height of Tucson's tallest building, the UniSource Energy tower Downtown.
The pad will be built uphill from the processing plants and will sit on a 2-foot bed of clay soil covered by a plastic liner up to 80 mils thick. A typical heavy-duty home-use outdoor trash bag is about 1.5 mils.
A dilute sulfuric acid solution will percolate through the ore pile and bring solutions containing dissolved copper to processing plants at the rate of 18,000 gallons per minute.
Making sure leaching solutions stay in the system is not only an environmental requirement, it is an economic imperative. The solutions contain the dissolved copper and, therefore, the payoff for the $550 million investment in the facilities.
Ore and other material will be mined at the rate of 280,000 tons per day. The pad will eventually contain 626 million tons of ore grading less than 0.4 percent copper but capable of producing 240 million pounds of nearly pure copper cathode without the need for further smelting or refining.
Because the Safford mine employs the solution extraction/electrowinning (SX/EW) method of producing copper, it will be one of Phelps Dodge's lowest-cost U.S. production sites. The operation will require 50 megawatts of electric capacity, enough to supply nearly 14,000 homes, according to Tucson Electric Power Co. standards.
Phelps Dodge spokesman Kimball Hansen in Safford says the current price of copper in the range of $2.50 a pound is not the reason for the speedy development schedule of the project. Whatever the price of copper, he says, the company wants to convert Safford from a place where money is spent to one where money is made.
If the current copper price were to remain stable, PD could recover its initial development investment in Safford in one year at full production. But the project was funded on the assumption that copper prices could be far lower in the future.
Phelps Dodge doesn't release internal costs, but industry experts generally agree that a modern SX/EW installation can make money even if copper prices dip below $1 a pound.
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