Business

Fewer working amid boom

Tucson's economy had a distinct sheen of copper in 1980. Magma Copper alone had 6,093 employees and ranked No. 1 in private sector revenues in the first Star 200 survey. Close behind was Phelps Dodge with 5,600 full-time workers. A half-dozen other mining firms were active in the region, employing thousands more. Whole sections of Tucson grew and prospered with the high wages that came with one of the state's oldest industries. As the '80s dawned, copper looked strong. But a wrenching realignment was about to hit the industry. Thousands of jobs would disappear and few companies would survive. Back then, more than 20,000 full-time jobs were tied to the copper industry in Southern Arizona. Today, the industry has about 6,000 workers statewide with roughly 1,300 mining workers in Pima County. Tracking only job numbers, you might think the industry is barely alive. But it is thriving in terms of production. Arizona still produces nearly two-thirds of the nation's copper and the United States is still the biggest consumer of the metal. With copper prices soaring in recent months to near-record levels of $1.50 a pound, the industry is reaping healthy profits. The company that emerged strongest from the copper recessions of the last quarter century, Phelps Dodge, last year had net income of more than $1 billion. Asarco, the other surviving major producer in the state, does not report financial results independent of parent Grupo Mexico. Gary Dillard, editor of Pay Dirt, a monthly mining magazine published in Bisbee, summed up the copper industry's realignment succinctly: "It's moved south." Chile is now the world's No. 1 producer of copper, although the United States still produces more than 1 million tons annually. Global mining giants are heavily invested in Chile, home of the world's biggest copper producer, state-owned Codelco. But Chile welcomes global investment. The world's largest copper mine is Escondida in Chile, majority owned by BHP Billiton, the Anglo-Australian company that bought and eviscerated Tucson-based Magma Copper a decade ago.

The industry survives in the United States by applying technology to the ancient science of extracting copper from earth. The former roaring copper camp of Bisbee is an example. If copper production resumes there - and it might - only 200 workers will be needed to match Bisbee's copper production in 1975 with 2,000 workers, Dillard estimates. Solvent extraction revolutionized copper production in the 1980s by producing pure metal from certain ores using acid solutions and bypassing costly smelting. Today, larger trucks, computerized dispatching and global positioning technology are helping cut production costs further. When Arizona copper production first exceeded 1 million tons annually in the mid-'70s, there were more than 20,000 workers in the industry. That production level is routinely matched today with a fraction of the work force. Even with technology replacing jobs, the economic benefit from the industry is focused in Tucson. Pima County gets more direct economic benefit from copper than any other Arizona county. Businesses here got $312 million in industry purchases in 2003, nearly half the statewide total. While jobs are fewer, they are still among the best paying, averaging around $50,000 a year, according to industry analyst George F. Leaming in Marana. Leaming also estimates that some copper jobs do not show up on industry rolls. Contractors and other providers of services may account for as many as 50 percent more industry jobs, he estimates. Global producers like Phelps Dodge are looking at places like Africa and South America for future production, but also keeping an eye on our own back yard. The company has plans for a new mine near Safford that could begin producing in this decade and employ 350 people. Another company, Resolution Copper, has mapped out one of the biggest global copper discoveries in the last 25 years near Superior. A famous Business Week magazine cover in 1984 ominously proclaimed the "Death of Mining" in the United States. It seems the announcement was premature. The mining industry is thriving, just with fewer workers.