Groundwater law loophole provides $300 million subsidy to Copper World/ Rosemont mine
SSSR opinion piece published in Arizona Daily Star, 7/13/2023
Toronto-based Hudbay Minerals continued its disinformation campaign to generate local support for its disastrous Copper World/Rosemont open-pit copper mine complex in a June 26 Arizona Daily Star opinion column written by Senior Vice President Javier Del Rio.
Mr. Del Rio first claims the United States depends on foreign sources for refined copper. Without new mines like Copper World/Rosemont, the country’s transition to renewable energy will be “undermine[d].” Then, he dresses Hudbay in heroic garments as a “responsible and sustainable” company coming to America’s rescue by producing copper used by American industry to counter the foreign threat.
And, miraculously, Hudbay will accomplish this without damaging groundwater supplies because the company is “committed to having a net positive impact on local water resources.” He concludes with a call to action aimed at state and federal regulators to “embrace” Arizona’s copper resources, promising to deliver a “prosperous future.”
The reality, of course, is quite different.
First, the United States is the world’s fifth largest copper producer, and its 25 mines already produce more raw copper than can be processed domestically. Last year, the U.S. exported 25% of its raw copper because of a lack of domestic smelter and refining capacity, according to the U.S. Geological Survey (USGS). There is no copper shortage.
Second, while the U.S. does import refined copper, 95% of these imports come from Chile (64%), Canada (20%), and Mexico (11%), all reliable trade partners with Free Trade Agreements. The US Geological Survey does not include copper on its critical minerals list because the U.S. is not threatened by a supply disruption.
Third, Mr. Del Rio’s unsupported assertion that Hudbay will benefit water supplies is contradicted by the company’s technical reports submitted to Canadian regulators that reveal it will have a devastating impact on local groundwater resources.
Table 17-1 and Table 17-2 from the company’s Preliminary Economic Analysis (PEA) technical report indicate that Hudbay will consume an average of 13,631-acre feet of groundwater annually for 44 years, equal to nearly 600,000-acre feet (AF) of groundwater. Hudbay’s annual water consumption is equal to what would be used by 41,000 households. (An acre-foot is equal to 325,581 gallons.)
The 600,000 AF of water is far more than the approximately 42,000 AF of water Hudbay has recharged in the Avra Valley, far away and downstream from where it will pump the groundwater it needs for its Rosemont/Copper World mine in Sahuarita and the 1,124 AF per year of Colorado River water it has contracted for 10 years via the Central Arizona Project canal.
It is vital to point out that a stunning loophole in state groundwater law allows mining companies to pump an unlimited amount of Arizona’s groundwater for free. This comes at the same time the federal government is paying Arizona cities, tribes and farmers $521 per AF NOT to use Colorado River Water.
Using the $521 as the current valuation of water in the Southwest and assuming Hudbay pumps 600,000 AF of groundwater, the company will receive a water subsidy from Arizona worth $313 million to operate this mine. (521 x 600,000 = 313,000,000)
Finally, Mr. Del Rio’s assertion that the raw copper will be refined on-site and used by U.S. industry is grossly misleading. Again, Hudbay’s technical reports and statements by its executives to industry stock analysts reveal Hudbay is not yet committed to producing copper on-site. It is far more likely that the raw copper will be exported to overseas smelters and refineries, which has been Hudbay’s plan since it acquired the Copper World/Rosemont site in 2014 from Augusta Resource Corporation.
The Copper World/Rosemont mining complex is an exorbitant waste of Arizona’s most valuable resource, water. It will most likely result in the copper exported overseas and profits going to a foreign company and its investors. Arizona will be left with an environmental mess and depleted groundwater. That’s why this mining project must be stopped.
Rob Peters, PhD
Executive Director, Save the Scenic Santa Ritas