Hudbay CEO suggests Rosemont permitting is a certainty

Hudbay Mineral’s CEO David Garofalo says the Toronto-based, multinational mining company only makes significant investments in countries where the company is “certain” that all necessary permits will be issued.

Hudbay’s investments include the highly controversial mile-wide, half-mile deep Rosemont open pit copper prospect in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson, Arizona.

“We focus on investment grade countries in the Americas,” Garofalo said in an interview with the Commodities Dig. “(There is) really only five countries where we would put meaningful capital to work in because we want the certainty of permitting, and we want the certainty of getting our capital back out and getting that return on investment.”

Garofalo’s sweeping assertion that Hudbay is “certain” to obtain a crucial Clean Water Act permit from the U.S. Army Corps of Engineers and a favorable final Record of Decision from the Coronado National Forest stands in sharp contrast to the significant environmental issues that still must be addressed at Rosemont.

Rosemont’s previous owner, Augusta Resource Corp., failed to obtain the crucial permits after more than eight years of effort. The reason is straightforward: The Rosemont project would inflict severe and permanent damage on a rare Sonoran Desert aquatic ecosystem that supports 11 threatened and endangered species.

The Clean Water Act requires whoever owns the Rosemont prospect to develop a plan to fully mitigate the unavoidable damage the mine would inflict on the environment. Augusta Resource failed to develop such a plan. And so far, Hudbay has not publicly presented its mitigation plan.

Garofalo told the Commodities Dig that he was not surprised that Augusta failed to obtain the Clean Water Act Section 404 permit because it typically takes more than a decade to complete the permitting process. He also said Hudbay expects permitting to continue into 2016.

“We’ve always had a view on permitting that was quite a bit more prolonged than (Augusta’s). This has not surprised us,” Garofalo said in the July 2014 interview. “In Arizona, it’s an established copper mining jurisdiction, these mines typically take 10 to 12 years to get permitted and Augusta right now is about year eight-and-a half in the permitting process. So our view is we are still about a year-and-a-half away from the permitting. We will not be disappointed if this permitting goes into 2016. That’s what we fully expected. We baked that into our evaluation.”

Hudbay acquired the rights to Rosemont last July when it purchased Vancouver, B.C., junior miner Augusta Resource in a C$555 million stock deal.

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5 Responses to Hudbay CEO suggests Rosemont permitting is a certainty

  1. ALAN JOHNSON says:

    HUDBAY HAS BEEN IN THE MINING BUSINESS FOR DECADES AND HAS FACED MANY OBSTACLES . THEY HAVE DEVELOPED A ” WIN WIN ” STRATEGY WITH THE HELP OF ” FRIENDS ” PROVIDING POLITICAL SUPPORT . THEY HAVE A VERY CONSERVATIVE APPROACH WHEN IT COMES TO PROJECT DEVELOPMENT AND LIKE THE TORTOISE , FOLLOW A STRATEGY WHEREBY ” SLOW AND STEADY WINS THE RACE ” .

    RECENT CHANGES IN THE FOREST SERVICE ADMINISTRATION MAY BE A SIGN THAT INSTRUCTIONS HAVE BEEN ISSUED ” FROM ABOVE ” REGARDING A DECISION IN FAVOUR OF HUDBAY . BY DRAGGING THE PERMITTING PROCEDURE OUT OVER TIME , THE FOREST SERVICE CAN BE SEEN AS DOING THEIR ” JOB ” WHILE BEHIND THE SCENES AND AT A MUCH HIGHER POLITICAL LEVEL OF DECISION MAKING , IT IS ALREADY A ” DONE DEAL ” .

    • Cheryl Rennie says:

      “Slow and steady” does not win a race when the tortoise is in the middle of the road in the path of a steam roller.
      Mr Johnson may like to dream that the mine is a “done deal” but he ignores the fact that the Forest Service does not have the final say.

  2. T J Stewart says:

    Good Golly “Tree-Huggers” Get Lost!! Arizona Needs Many Hudbays And Rosemont Mines!! God Bless America And The Tea Party Patriots.

    • tom says:

      TJ Stewart You are what we flag flying Americans call the Lost Souls, having no idea what America stands for. Go back under your rock and study American history. We are not a country that relies on foreign entities to usurp our resources and our land for their own profit. You my untaught Tea Party Patriot are worse than those that would sell America’s soul for profit. You are an uneducated, misguided, fool and for that you will be given no remorse by those of us that truly love our country and for what it stands for.

  3. Wayne Miello says:

    o any readers know what is the source of the high level of dump truck activity on AZ Highway 83 (82?)between I-10 and Sonoita? I was hiking in the Rosemont area last week and noticed dozens of trucks running north and south along the highway. They were all the same type of truck and they were sure in a hurry and some were speeding, swerving in the middle of the 2-way road and endangering smaller passenger cars. Is the future of this highway to be a dangerous hazard instead of a wonderful scenic drive?