AZ Big Media: Mining in Arizona remains an economic goldmineSeptember 20, 2017
“What is not eaten is mined.”
It’s a mining saying you may learn from Dave Kimball, a shareholder at Gallagher & Kennedy and an expert in mining in Arizona. Kimball’s expertise has been created through decades of natural resource lobbying, legislation and advocacy in mined land reclamation, mining and more. Who better to provide a quote that all Arizonans should not simply seek to understand, but to recognize as the literal foundation of Arizona’s economic bedrock.
The next time you get into your car, relax in your Valley home, ride in a downtown elevator, or even drink a soda, thank mining in Arizona – without which, our daily lives would look much different. But that’s simply the tip of the drill bit. Arizona’s mining industry has and continues to shape the economy in the Valley of the Sun (and beyond).
The hard numbers of hard-rock mining employment
Let’s revisit Kimball’s quote: “What is not eaten is mined.” How does an old adage from the world of mining correlate to Arizona’s mining industry? More importantly, why is it impactful in context with the local economy? Perhaps if you knew that two-thirds of the entire production of copper in the world takes place right here in your home state, the context is more impactful. Or, how about the fact that 65 to 70 percent of the nation’s copper supply comes directly from Arizona mines?
“What is missing above and beyond the numbers,” explains Dennis Hoffman, PhD, director of the L. William Seidman Research Institute at ASU, “is the fact that mining is generally an export-based business.”
This is important to recognize, according to Hoffman, because hard rock mining in Arizona induces local activity, and thus, is a vital source of job creation.
Just how important is mining in Arizona to the state’s workforce? You might be surprised.
“The most recent data,” explains Kimball, “reflects 44,000 jobs directly and indirectly linked with the Arizona mining industry.”
To put that into perspective: If Arizona’s mining industry was a company, it would be the state’s biggest employer.
The income produced by this formidable workforce: $4.3 billion.
While Arizona mining employees offer a well-proportioned economic contribution to the state, they also ensure significant national security, something that Kimball explains as producing a “rippling effect” in affecting the number of suppliers, equipment and rolling stock.
And, while our state and nation prosper and economic developers tout the importance of attracting high-wage jobs to Arizona’s, it might surprise many outside the industry to learn that those employed within the mining industry are among the highest paid (per employee) wage earners in the state.
“According to the Arizona Mining Association,” explains Dan Johnson, vice president and general manager of Florence Copper Inc., “the average worker in the mining industry earns over $100,000 per year.”
According to a report conducted by the L. William Seidman Research Institute at ASU, Florence Copper Inc. alone is projected to yield $1.98 billion in personal income in Arizona over a 25-year project lifetime.
So well paid are mining employees in Arizona, in fact, that they are the highest taxed at a mind-boggling 44 percent. Similarly, mining companies are taxed five times more than the average Arizona business.
While mining is one of the highest taxed industries in the state, there’s a silver (or more appropriately – copper) lining.
“The dollars that flow to state and local coffers are important in funding schools, public safety, healthcare and transportation infrastructure,” Hoffman says.
Will technology dig into the mining workforce?
While mining has a rich history in Arizona, gone are the days of the stereotypical miner with a pickaxe slung over his shoulder. As technology continues to force automation in other industries, will it change the economic impact the mining industry has in Arizona? The short answer: probably not.
“The copper mining industry is on the forefront of both computerized mining and environmental stewardship,” Kimball says.
It must. Globally, mining is highly competitive. Even though Arizona has the monopoly on available mineral resources — such as the Morenci mine, the largest mine in Arizona – it also has to adhere to some of the most stringent environmental and regulatory standards and costs.
“Unless the mining industry adapts to changing times, embraces new methods and minimizes impacts,” Johnson says, “mining won’t continue to be the economic driver it’s historically been for Arizona.
While advancement in technology and robotics continue to be crucial for the perpetuation of the mining industry’s economic affluence, it won’t necessarily eliminate occupations.
“Mining will be increasingly automated,” Hoffman says, “so there is likely to be less sourcing of direct jobs, but local job creation will occur as a result of the state continuing to invest in the industry.”
Mine eyes have seen the glory born of ore (for time to come)
“Arizona is home to some of the richest copper ore loads in the country, so investment in the state’s resources will continue,” Hoffman says.
Unlike coal mining, mining for ore is not a boom or bust occupation.
Copper ore mines, indigenous to Arizona, can be miles deep and require years of preparation and advanced technology.
The Resolution Copper mine in Superior, for example, has been recognized as the largest known ore body in the world.
“To access the mine requires new technology in robotics” Kimball says.
“Arizona has been blessed with minerals,” explains Francis McAllister, vice president of land and water for Freeport-McMoRan Americas and chairman of the Arizona Mining Association. “The primary mineral is copper, but other mining operations either exist or are being contemplated in minerals like gold, potash, silver, uranium, or coal. Because these resources exist in Arizona, and the world needs these resources, mining will continue to be a part of this evolving economy. The future of electric vehicles, renewable electricity, transportation, communication, housing all depend on mining. Mining will continue to be a part of the Arizona economy to continue to supply the evolving economy of the world.”
The added plus of copper ore extraction is that it takes decades. In order to remain competitive, the commitment to time and environmental integrity ensures both job security and the safekeeping of economic prosperity for mining in Arizona.
“Training employees is an added cost,” Kimball says. “Once an employee is trained, you don’t want to lose them.”