Small Arizona town copes with Freeport mine closure Freeport-McMoRan Inc. announced plans last fall to curtail operations at its Sierrita mine in Green Valley, south of Tucson, due to falling copper and molybdenum prices. This will impact the economy of nearby Sahuarita, where 21% of residents work in mining and the Sierrita mine provided $255 million in economic benefit to Pima County. Sahuarita officials are hoping to diversify the town's economy and reduce reliance on the mining industry through focus on industries like technology, tourism, aerospace and small business. The closure may also negatively impact the Sahuarita Unified School District, as

1. Small Arizona town copes with Freeport mine closure
Judson Tomaiko, Special to The Republic | azcentral.com 10:54 a.m. MST February 17, 2016
A slowdown in China's economy has begun to sting Arizona's economy, lowering copper prices, prompting
cutbacks and eventually closing one of the state's mines.
Phoenix­based Freeport­McMoran Inc. responded to the lowest copper and molybdenum prices since the
Great Recession by announcing plans last fall to curtail operations at its Sierrita mine in Green Valley,
(/story/money/business/economy/2015/12/09/freeport­plans­full­sierrita­mine­shutdown/77045340/) south of
Tucson.
Officials in the town closest to the mine, Sahuarita, are hoping to reduce the economic fallout of the closure.
“About a year ago, we as a town developed an economic­development strategic plan that looks at how we diversify our economy,” said Sahuarita’s
economic­development manager, Victor Gonzalez. “So how do we go from a two­legged stool to a four or five?”
Three weeks into January, Freeport­McMoran started cutting back, reducing the workforce from 1,300 employees to about 800 for the mine to work
at a production rate of about 75 percent.
Dropping copper prices
The company has been struggling and has said it will consider the sale of other properties in addition to the Sierrita shutdown. Copper prices are
falling as demand globally slows, and fossil­fuel prices are low for the same reason, coupled with ample production.
AZCENTRAL
Freeport looking at all assets for potential sales
(http://www.azcentral.com/story/money/business/energy/2016/01/26/freeport­
looking­all­assets­potential­sales/79347890/)
About 170 Sierrita employees were transferred to other operations, 95 employees were laid off with severance and benefits packages and the
remaining employees were reduced by voluntary methods such as an early­retirement incentive program.
“A full curtailment of mining and milling operations is anticipated in mid­2016,” said Eric Kinneberg, director of external communications for the
company, noting that the cutbacks aren’t done yet. “When the mine and mill move to care and maintenance mode, about 250 employees will remain at
the site to run those operations and in other various capacities.”
With the Sierrita mine providing Pima County $255 million in economic benefit, according to a 2014 analysis performed by the L. William Seidman
Research Institute at Arizona State University, the 50,000 people in the immediate area are directly affected.
(Photo: Judson Tomaiko/Special to
The Republic)

2. Freeport­McMoRan Inc. said it will close the Sierrita mine south of Tucson. (Photo: Freeport­McMoRan Inc.)
The Town Council created the “Blueprint for Economic Growth and Prosperity” last year that lists the statistics of the town’s employment demographics
and creates a realistic analysis of the town’s business climate. It reviewed the town's strengths, weaknesses, opportunities and threats.
Of the 3,181 Sahuarita residents employed in the town, 21 percent are in the mining industry, the majority employed at the Asarco Mission Mine. Two
other industries, retail and food services, account for 45 percent of resident employers, leaving very little diversity in the Sahuarita economy.
Factoring in residents who work outside the town into the equation for a total of 10,285 people, the three key areas of employment become sales,
administrative and management occupations accounting for 33 percent of jobs.
AZCENTRAL
Freeport cutting Arizona copper production, axing nearly 600
jobs
(http://www.azcentral.com/story/money/business/economy/2015/10/22/freeport­
cutting­arizona­copper­production­axing­nearly­600­jobs/74417448/)
The Town Council wishes to expand that by making use of six key industries: information and communications technology, tourism and hospitality,
aerospace and defense, and small­business entrepreneurship. This is to ensure that the town doesn’t receive whiplash from a struggling mining
economy.
School district may be hurt
For now, Sahuarita Finance Director A.C. Marriotti said that he does not believe the negative impacts to the town will be significant because the town's
main revenue streams are sales tax and state­shared revenues.
“Spending on luxury items is usually the first thing to get cut. Fortunately, or unfortunately as the case may be, the town does not have too much in the
way of luxury, high­end retail,” Marriotti said. “Discount retailers, a large component of our retail mix, tend to be more resilient during economic
downturns.”
While the town does not rely on property taxes for revenue, Marriotti pointed out that another group within the town does: the Sahuarita Unified School
District. As copper prices dip, Superintendent Manuel Valenzuela fully expects the mine to decrease in value and thus decrease the amount of taxes
generated for the district.
The district has doubled to more than 6,000 students in the last 11 years. It also has had capital spending cut by 85 percent just six years ago. In
addition, it had a recent bond issue for a new school rejected and a 14 percent budget override rejected.

3. AZCENTRAL
Freeport loses No. 1 spot among Ariz. companies
(http://www.azcentral.com/story/money/business/2015/07/25/freeport­loses­spot­
among­ariz­companies/30657005/)
The decrease in tax revenue is not a welcome sight. The company has given donations and grants to the district, including $500,000 to the National
Math and Science Initiatives to help double the number of students in advanced­placement classes, but Valenzuela said it is not just the money that
will be missed.
"Their corporate philosophy and culture is engaged in community engagement. They've been a regular part of our community, not just through their
dollars but through their employees as well,” Valenzuela said.
According to the superintendent, the mine’s employees volunteer throughout the community and at the schools, including athletic and fundraising
events, so the district will now have to find a way to replace missing funds and missing volunteers.
Read or Share this story: http://azc.cc/1XxW6uD