One of the central pillars of Augusta Resource Corporation’s public relations campaign for its Rosemont Copper Company subsidiary is the proposed Rosemont mine will reduce America’s reliance of imported copper.
Augusta claims the proposed Rosemont mine on the Coronado National Forest in the Santa Rita Mountains south of Tucson “will reduce the nation’s dependence on foreign sources of copper.”
About 35 percent of the copper consumed in the U.S. last year was imported, according to the U.S. Geological Survey.
This assertion is having an impact on the perceptions political leaders have about the proposed mine.
“I support the Rosemont Mine,” U.S. Senator John McCain, R-Ariz., is quoted as saying in the Sierra Vista Herald.
The paper reported that McCain said it makes no sense for America to import copper from New Guinea, Chile or Mexico.
Contrary to its public statements meant to shore up support for the mile-wide, half-mile deep open pit mine that will dump waste rock on more than 3,000 acres of national forest, Rosemont has no contracts with U.S. buyers to purchase as much as one ounce of its copper.
According to Augusta Resource’s Aug. 28 feasibility study (large file warning) filed with Canadian securities regulators, Rosemont will sell 20% of its copper production to Red Kite Management, a London-based copper hedge fund.
In addition, Augusta states “another 30% of production for the life of the mine is committed to LG International.” LG is a partner in United Copper & Moly, LLC, a Korean-based consortium that owns 20% of the Rosemont project.
Thus half of the copper produced from the mine is already committed to foreign companies.
What does Augusta intend to do with the other half of the 240 million pounds of copper it claims it will produce annually for about 20 years?
“Rosemont is in active negotiations with several major international smelters in Asia and Europe for the sale of the remaining uncommitted production, and expects to conclude sales contracts with one of these counterparties,” states Augusta’s feasibility study (page 208).
Augusta plans to ship sulfide copper concentrates by truck to a Tucson rail yard.
“There it will be transferred into railcars” for transportation “to more distant North American smelters or to the ports in Mexico for ocean transport to offshore smelters,” the report states (Page 210).
There are three copper smelters in the United States including two in Arizona: ASARCO’s Hayden Smelter in Hayden and the Miami Copper Smelter operated by Freeport McMoran in Claypool. Kennecot Utah Copper operates another smelter in Magna, UT.
Augusta has not announced smelter agreements with any of the U.S. smelters. Rather, Augusta is clearly focused on international markets:
“Rosemont’s copper concentrates are very desirable in the international market because of their very high copper content and very low impurity level,” the feasibility study states (Page 207).
And, Augusta expects the international market will be Rosemont’s primary focus throughout the life of the mine.
“The global market balance for copper concentrates will remain tight during most of the Rosemont’s life because of growing demand in China and the copper industry’s challenges in keeping pace with timely new project developments and adequate production rates to meet that demand,” the report states.
So rather than reducing U.S. imports of foreign copper, the Rosemont mine will be exporting copper concentrate overseas, where it will be refined and put on the international market. The U.S. is a major importer of refined copper.
According to U.S. Geological Survey, Mineral Commodity Survey for January 2012, the United State’s exported 220,000 metric tons of copper concentrate and 35,000 metric tons of refined copper in 2011.
Meanwhile, the U.S. imported only 1,000 metric tons of copper concentrate, but imported a whopping 650,000 metric tons of refined copper in 2011.
Therefore, according to Augusta’s own projections, the Rosemont copper mine will increase the amount of U.S. copper concentrate exports while adding to the amount of refined copper imported into the country.
Once again, Augusta is deceiving the public, this time by claiming the Rosemont mine will reduce America’s consumption of foreign copper.