2008 Successes and Challenges
2008 was a year of progress, promise and challenge for our company. We moved forward operationally and developed further solid evidence that the copper deposit we hope to mine is one of the largest ever discovered—one that could provide 20 percent of the expected US copper demand for more than several decades. During the year, independent consultants were able to estimate the related multi-billion dollar economic and fiscal impact our business will have on our host communities, the Copper Triangle region, the state of Arizona and the US federal government.
2008 was also a period of disappointment and unexpected challenge. While the land exchange legislation needed for our project to succeed progressed at the federal level, it did not achieve passage and presidential approval as we had hoped. Also, the severe and unexpected global economic downturn which began in September 2008 necessarily affected our project schedule and impacted our extended workforce of contractors.
Here's a look at both sides of 2008:
Successes:
- Health and Safety:
- Based on Mine Safety & Health Administration (MSHA) criteria, there were no Lost Time Injuries (LTI's) during 2008. However, Resolution Copper has a higher standard and counts restricted workday injuries as LTI's. While we recorded two such injuries, when considering all injuries, we did successfully achieve the target reduction.
- Received Sentinels of Safety Award from the Mine Safety and Health Administration.
- Community and Commitment to Local Hire:
- 87.5 percent of Level 1 contractors were hired locally through Superior-based Copper Triangle Services (Level 1 contractors are those who report directly to a Resolution Copper supervisor).
- Signed Mutual Benefits Agreement with Town of Superior to define where Resolution Copper can assist the town socially, economically and environmentally after the proposed land exchange has been executed.
- Signed Emergency Services agreement with the Town of Superior to support additional police, fire and EMT services needed by Resolution Copper.
- 89 percent of Copper Triangle survey respondents feel Resolution Copper is a good neighbor and involved in the community.
- Renovated Mine Information office located on Main Street in downtown Superior. This office, along with a 24-hour telephone hotline, gives local residents and other stakeholders convenient access to Resolution Copper staff and information.
- Environment:
- Rehabilitation progressed on Superior-area site affected by previous mining operations. Expended another $10.2 million on these efforts in 2008. Total expenditures will exceed $50 million.
- Completed construction of a water treatment facility to treat groundwater removed from a previous mine shaft for discharge once it is pumped to the surface. Water will be reused for irrigation to benefit Arizona agriculture.
- Socio-Economic
- April 2008 Economic and Fiscal Impact Study completed by third-party consultant Elliott D. Pollack and Company projected total estimated economic impact of Resolution Copper mining operations to be $46.4 billion over several decades of production. Peak of 1,200 mine employees and 200 contract workers expected on-site annually during normal operations.
- 2008 wages and salaries totaled $9.5 million, a 54.5 percent increase over 2007 figure of $6.2 million.
- 2008 financial expenditure with Resolution Copper suppliers was approximately $112 million.
Challenges:
- Proposed land exchange legislation, known as the Southeast Arizona Land Exchange and Conservation Act, failed to pass both houses of Congress and secure presidential signature. This is our highest priority for 2009.
- Global economic downturn which began in September 2008 forced our company to reorder operational priorities and to temporarily decrease our contractor workforce.
- We were unable to meet certain 2008 targets due to the need for cost constraint and related changes to our scope of work.
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