Death of a mine

In Utah, a major new copper producer goes belly-up in just two years

  • Ore is piled onto leach pads at the Lisbon Valley Mine in early 2006. Extracting the copper from the site's sandstone proved more difficult than anticipated, and the mine would give up within a year and a half

    COURTESY CONSTELLATION COPPER
 

In the fall of 2005, the country's first new copper mine in more than a decade declared itself open for business. Constellation Copper Corp. had labored for 13 years to clear regulatory and legal hurdles, find financing and obtain permits for its Lisbon Valley Mine in southeast Utah. A headline in The Mining News summed up the struggle: "Constellation Copper's motto: Never, ever give in."

But two years later, Constellation did just that: It closed the mine, laid off two-thirds of its workers, and declared that by 2010 it would finish processing its stockpiled ore and shut down completely.

The company's former president, Gregory Hahn, had predicted at least a 10-year life for the mine, and industry experts thought it would be a stellar success. Soaring copper prices and the high grade of the Lisbon deposits should have just about guaranteed a profitable operation, says Michael Nelson, associate professor in the College of Mines and Earth Sciences at the University of Utah. He and other mining experts see the failure of the Lisbon Valley Mine as simply a fluke, rather than a harbinger of doom for the West's other new copper mines.

Constellation's current CEO, Patrick James, concurs. He notes the unique nature of the mine's copper deposits - in soft sandstone rather than the harder rock types usually found around copper. The Lisbon ore broke down into sand, which leached copper out much more slowly than early lab tests had predicted. "We used up all of our capital just (mining and moving) ore onto the leach pad," he says. "Then we didn't get copper out fast enough to be able to continue to mine."

Although mine start-ups often have glitches to work out, the extent of Lisbon's problems was surprising, says Ken Krahulec, senior geologist with the Utah Geological Survey: "Something clearly went badly astray. Some of it was bad luck, some of it was bad test work."

Financial losses played into the shutdown as well. To get financing, the company had signed contracts to sell about 1 million pounds of copper each month for around $2 per pound, but the market price quickly shot to more than $3 per pound. "In 40 years of mining, we had never seen $1.80 copper, so (the contracts) looked really good at the time," says James. "Then the price climbed, and that would have been OK if we had made the production we expected." But when copper output didn't go up, the company was stuck selling most of the metal it did produce at a price far below market value.

Mining has always been a volatile industry. Over and over, hardrock mines have brought quick riches to Western communities, only to leave them with lasting environmental and economic problems when the vein plays out or metal prices plunge. "The (Lisbon Valley) mine is the poster child for the fast bust," says Roger Flynn of the nonprofit Western Mining Action Project. "Western communities need long-term diversified economies, not short-term boosts."

The mine's shutdown has been hard on the nearby communities of Monticello and Moab. The operation employed 159 workers with an annual payroll of about $9 million. Jobs with good pay and benefits are hard to come by in the area; San Juan County's unemployment rate last year was 5.2 percent, nearly double the statewide average of 2.7 percent - and that was before the Constellation layoffs. To find equivalent work, former mine employees may have to move to Nevada or Arizona. "The wages (mine workers) were earning out there are not replaceable in this area," says Lisa Roman, with the Utah Department of Workforce Services.

Still, once Lisbon Valley shuts down completely, some other mining company may buy it and ramp it up again. "Another company could put it back into production and make money," says Krahulec. "You'd sell (copper) at $3.20 a pound instead - if you could sell at that price you could solve the problems." But James isn't so sure. "I'd like to tell myself that we did as well as anyone could have with it," he says. "We've talked to a lot of other mining companies and nobody's come back with an idea that's better."

The author is HCN's associate editor

Note: This article is a sidebar to this issue's feature story:

Reluctant Boomtown - A copper-mining company is courting Superior, Ariz., but the former mining town – now re-inventing itself as a modest tourist haven – is unsure whether it really wants a new marriage with extractive industry.

.

High Country News Classifieds
  • WATERSHED PROGRAMS COORDINATOR
    Are you looking for a positive and success oriented work environment, the opportunity to join a (small but) dynamic group of people supporting watershed activities...
  • BACKCOUNTRY FILM FESTIVAL MANAGER
    Boise-based Winter Wildlands Alliance is looking for an experienced and highly motivated individual to organize our annual Backcountry Film Festival and Tour and coordinate additional...
  • LAND CONSERVATION MANAGER
    SUMMARY Leads, administers and manages the land conservation, conservation easement stewardship, and property management activities of the City of Fort Collins Natural Areas Department within...
  • CLEAN ENERGY PROGRAM ATTORNEY, NEVADA
    Position Summary: Western Resource Advocates (WRA) is seeking a Staff Attorney who is passionate about Western communities and the protection of the natural environment to...
  • EXECUTIVE DIRECTOR
    Deschutes River Conservancy in Bend, Oregon
  • WATER POLICY ANALYST WITH WRA (BOULDER)
    Position Summary: Western Resource Advocates seeks a passionate Water Policy Analyst with knowledge of western water issues to join our Healthy Rivers Team to strengthen...
  • GILA NATIONAL FOREST
    9+ acre inholding. Passive solar strawbale off the grid and next to the Continental Divide Trail in ponderosa pine/doug fir forest at 7400.
  • HIRING BEARS EARS EDUCATION CENTER DIRECTOR
    Conservation nonprofit Friends of Cedar Mesa in Bluff, Utah is hiring an Education Center Director to oversee the operation of the Bears Ears Education Center....
  • PROGRAM MANAGER, SUSTAINING FLOWS
    Friends of the Verde River, Cottonwood, AZ. Apply at https://verderiver.org/employment-opportunities/
  • PROGRAM ASSOCIATE - VERDE RIVER EXCHANGE
    Verde River Exchange - Friends of the Verde River, Cottonwood, AZ. Apply at https://verderiver.org/employment-opportunities/
  • CODE COMPLIANCE OFFICER
    Teton County Planning & Building is hiring! Our ideal candidate is a team-player, a problem-solver, pays attention to detail, and can clearly communicate technical material...
  • ARCHITECTURE DRAFTSPERSON/PROJECT MANAGER
    Studio Architects is seeking a full time Architectural drafts-person/project manager with1-3 years of experience to join our firm. At Studio Architects our mission is to...
  • ASSISTANT MANAGER/TRAINEE, COLORADO RANCH
    needed for 16,000+ acre conservation property in south central Colorado. Qualified candidate would have experience working on a ranch or wilderness property, general forestry/fire management...
  • FARM HAND &/OR NANNY IN ESCALANTE
    Nanny for 18-mnth-old. Yearly salary, vacation, health insurance. Spanish/other foreign-language native spkr prefrrd.
  • EXECUTIVE DIRECTOR
    Washington Association of Land Trusts seeks an ED to build on WALTs significant success & to lead the association to new levels of achievement. See...
  • EXECUTIVE DIRECTOR
    If you are deeply committed to public service and would like to become part of our high performing, passionate and diverse team, NCAT is looking...
  • BEAUTIFUL CUSTOM STRAWBALE HOME IN WESTERN COLORADO!
    Secluded, energy efficient Southwestern home on 40 wooded acres. Broker - Rand Porter - United Country Real Colorado Properties. 970-261-1248, $425K
  • FORMER RETREAT CENTER/CONSERVATION PROPERTY FOR SALE
    57 acres in Skull Valley, AZ, 17 miles from Prescott, year-round creek, swimming holes, secluded canyon, hiking/meditation trails, oaks, pines, garden, greenhouse. House, office building,...
  • HISTORIC RANCH HOME W/ 20 ACRES
    Historic 1893 Ranch Headquarters. 4 Bdrm, 3.5 Ba, 4000 ft2. Remodeled 2002. Includes 2 studio apts, stables, arena, workshop, 5 RV hookups. Chirachua & Peloncillo...
  • VICE PRESIDENT OF RETAIL OPERATIONS
    The Vice President of Retail Operations will provide overall leadership and accountability for purchasing, product development, merchandising planning, visual merchandising, retail operational excellence, oversight and...