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Mining fuels economies on both sides of the border

Victoria Harker

Arizona’s historic mining industry is among the most abundant on the planet, producing copper, lead and zinc that make the world go round. 

Freeport-McMoran, ASARCO, Newmont, Rio Tinto, Taseko, Hudbay, South32, these are the industry giants investing billions of dollars in state-of-the-art operations here. As the demand for metals rises along with the world’s population, Arizona is positioned to reap the economic benefits. 

Arizona’s border state, Sonora, Mexico, is a large producer of silver, putting it in a similar position.

Tariff-free trade is essential to their continued viability, Harry “Red” Conger, president and chief operating officer-Americas for Freeport-McMoRan, Inc., told a large crowd of business leaders and policy makers at the 60th Anniversary Summit of the Arizona-Mexico Commission (AMC) in Phoenix. 

Under the free trade agreement, the North American Free Trade Agreement (NAFTA), Arizona and Sonora have developed extensive supply chains across both borders that provide jobs and revenue for communities, he said. 

“I’m a native son of Arizona, but I think of myself as a regional native. I’ve always been blind to the border,” said Conger, whose father was a mining engineer at a copper mine near Marana.  “There’s a lot that goes on in mining in this part of the world that moves back and forth across the border.” 

Supply chains support local economies

Conger was a speaker at the AMC Summit along with Arizona Gov. Doug Ducey and Sonora Gov. Claudia Pavlovich who spoke about “The Future of North American Trade.” Their primary message was to urge ratification of a new open trade agreement, the United States-Mexico-Canada Agreement (USMCA), that will replace the outdated NAFTA and bring it into the modern, digital age.

CEOs, trade officials and policymakers came together at the event to strategize and collaborate on cross border initiatives to promote economic development in 16 areas including mining. AMC’s mission is to improve the economic prosperity and quality of life for residents through public-private collaborations in advocacy, trade, networking and information. 

Preserving free and open trade between the three countries is a primary goal of the commission this year. Expansion and modernization of border crossings to increase international commerce  is another. 

Freeport-McMoran, which generates $2.4 billion in direct and indirect revenues to the state and 22,700 direct and indirect jobs, benefits from NAFTA, and currently is exploring mining opportunities in both states. 

“We’re very optimistic that we’ll have more mining operations in the region and we’d like for some of those to be on the other side of the border,” Conger said. “We are an international entity. We are a free trader and very much support everyone’s efforts for a new trade agreement.” 

New mining projects in Arizona

Freeport is one of 27 major mines in Arizona that account for a $4.87 billion impact on the Arizona economy and 51,800 direct and indirect jobs, according to the Arizona Commerce Authority. 

A number of new mining operations have announced new and planned projects including: 

Hermosa Project South32, an Australian Mining Company, purchased the $2.3 billion project to develop a state-of-the-art underground mine in the Patagonia Mountains near Nogales. It will mine lead, zinc, and silver. Once completed, the mine is expected to impact over 3,000 people in the state of Sonora and Arizona through employment opportunities, economic stimulus, and production.

Florence Copper Mine Parent company Taseko Mines commenced operations this year at its new in-situ copper recovery facility in Florence. The commercial life of the project is expected to be 25 years. Arizona would receive an economic uplift of $3.4 billion with $2.1 billion remaining in Pinal County.

ASARCO completed a $229-million modernization of the historic Hayden copper smelter. Owned by Grupo Mexico, the mine has restarted operations. The smelter employs 560 and contributes about $122 million annually to the economy.

Freeport McMoRan Inc. is completing a $250 million modernization of equipment at the historic Miami smelter near Globe. The Miami mining operation employs 760 and has an annual economic impact of about $267 million.

Resolution Copper has spent $40 million cleaning up a hundred-year old mining site before it starts construction on a mine that will be the largest in North America. Owners Rio TInto and BHP have invested over $2 billion in developing the project since 2004 and are entering the final permit stage. 

Excelsior Mining Corp. announced that it has been issued the first new copper mine permit in Arizona in over a decade. The federal Environmental Protection Agency issued an operating permit for in-situ recovery mining for the Gunnison Copper Project between Benson and Willcox.

A new effort to deal with a leaky cross-border sewage pipe

For years, Nogales residents have suffered from water contamination that stems from the wastewater line.

By Ariana Brocious

Nogales Wash IOI

The International Outfall Interceptor, or IOI, runs under this concrete-lined wash through the city of Nogales, Ariz.Carolyn Yaussy/AZPM

The international outfall interceptor, or IOI, is the cross-border pipe that carries 12 to 14 million gallons of sewage daily from Nogales, Sonora, and Nogales, Arizona, to a treatment plant in Rio Rico, Arizona. The treated effluent is discharged into the Santa Cruz River. The pipeline was built in the 1950s and 1970s. In recent decades it has suffered numerous cracks and ruptures, creating serious public health risks when raw sewage is released into groundwater and surface water sources.

Last month, the U.S. House of Representatives passed an amendment to put $4 million toward fixing the aging infrastructure. This year’s Arizona state budget has $2.6 million to help repair the aging sewer line. That comes in addition to an existing $21 million in federal funds set aside for the pipeline.

Ben Lomeli is a retired hydrologist with the U.S. Department of Interior. The Nogales native met up with The Buzz at the Nogales wash near Rio Rico, near where one of the manholes connected to the cross-border sewage pipe ruptured in 2017. Lomeli is on the Board of Directors for the Friends of the Santa Cruz River and has been working to improve the wastewater situation for years.

He said there’s several problems with the IOI. First is the stretch that’s “natural,” or not concrete lined, in the Nogales Wash. That section can rupture, especially during heavy monsoon floods that carry rocks, boulders, trees and other debris.

“That’s the biggest problem we have, because those ruptures are what produces the most contamination. It also leaks sewage into our groundwater aquifers 24/7.” Lomeli said cure-in-place or slip lining, which inserts a new protective lining inside an existing pipe, would take care of that problem in sections of the pipe closer to the border that are buried and well-protected.

Another problem lies with stormwater treatment across the border in Mexico, Lomeli said.

“Every once in a while when there’s flooding in the streets in Nogales, Mexico, you have the people over there open their manholes to relieve street flooding, and that really pressurizes the IOI and has caused geyser-like spews where it blows the manholes in the streets and just gushes raw sewage onto the streets,” he said.

Next, The Buzz talked with Nogales Deputy City Manager John Kissinger about how the city views the wastewater challenge of the binational sewage line.

“The biggest problem with the IOI is, unfortunately, Mexico doesn’t adhere to the same standards of pre-treatment and the usage of a sewage system as you would typically find in the U.S. And, unfortunately, the enforcement mechanism that we all share in the state of Arizona through ADEQ can’t be enforced on Mexico,” Kissinger said.

“One of the problems is the federal government or IBWC [International Boundary and Water Commission] thinks there should be a local cost-sharing” to fix the pipe, Kissinger said. “We believe that the federal government just needs to step up and take care of it, and that if there is a cost-sharing we make sure it’s appropriate and that the citizens and ratepayers of the city of Nogales [Arizona] aren’t paying to subsidize the treatment of Mexican sewage.”

Congressman Raúl Grijalva has been working on this issue for a long time. He, along with Sens. Martha McSally and Kyrsten Sinema, recently introduced the Nogales Wastewater Fairness Act to clarify who’s responsible for pipe improvements.

The Buzz talked with Grijalva about the federal role in dealing with the pipeline.

“I’ve always believed that from the get-go, this is an international treaty. We can adjust it. It’s State Department and Commerce are the only people that can adjust this, and yet, the liability and $60 million worth of costs falls on a community hard-hit by other border issues. There’s no way they can sustain that or pay for it,” Grijalva said.

In 2017 a judge decided that a majority of the responsibility for the pipeline falls to the federal government, specifically the International Boundary and Water Commission. AZPM reached out to the IBWC for comment but they did not make anyone available for an interview.