Florence Copper Project

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Recently aired back-to-back interviews on Horizon featuring the primary supporter and critics of a proposed mining operation near the town of Florence. Michael McPhie, the President and CEO of Curis Resources, said the project will generate jobs and tax revenue for the local community, but Florence Vice Mayor Tom Smith and Attorney Jordan Rose said the project will contaminate groundwater and destroy property values.

To watch the complete interviews as they originally aired on “Arizona Horizon,” click here for the proponent and here for the opponent of the Florence Copper Project.

Ted Simons: Coming up next on "Arizona Horizon," The Florence Copper Project. Hear from the CEO of a controversial mining operation near the town of Florence. Hear from the company proposing the project and from those who are fighting against it, including the town's vice mayor. That's coming up next on "Arizona Horizon."

"Arizona Horizon" is made possible by contributions from the friends of eight. Members of your Arizona PBS station. Thank you.

Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons.

Ted Simons: The Florence Copper Project is an unconventional mining operation near the town of Florence in Pinal County. Curis Resources is behind the project. The Canadian company wants to extract a huge body of copper ore buried about 400 feet under land the company owns and leases. Instead of using traditional mining methods, the company wants to dissolve the copper with sulfuric acid and pump it up to the surface. Curis says the project will create jobs and generate tax revenue for state and local governments, but critics fear it will contaminate groundwater and destroy property values. Tonight we bring you both sides of the issue with back-to-back discussions that recently aired on "Arizona Horizon." First, an interview with Michael McPhie, the president and CEO of Curis Resources, and later we'll hear from the vice mayor of Florence, along with an attorney for development company that wants to build homes in the area. Where exactly is this site? How close to Florence, what are we talking about here?

Michael McPhie: The site is 1350-acre piece of property that is within the town limits of the town of Florence. It didn't used to be. A few years ago it was in the county, but the town in its annexation of land brought the property into the town limits. So it's a mile and a half from downtown, and three miles from the housing development to the north.

Ted Simons: South of the hunt highway?

Michael McPhie: Yes.

Ted Simons: Now, you mentioned how many acres. That's total. What about what you plan to do mining operations originally on state land?

Michael McPhie: Sure. So the deposit area is only 200 acres approximately 212 acres. So 15% of our land is the copper deposit. It's buried 400 feet below surface, so it's quite deep. And we're going down that deep area to extract the copper. The state land portion is 160 acres of the -- that covers approximately half the deposit and the remainder is on private land.

Ted Simons: State land is the rectangle that we're seeing there?

Michael McPhie: Yes. The blue, that covers about half the deposit.

Ted Simons: OK. And how much copper are we talking about? Let's talk about what you're able to mine right now from the state land.

Michael McPhie: Well, there's approximately 3 billion pounds of copper in the ground, and approximately half of that is on state land.

Ted Simons: OK. What kind of mining are you planning to do? I know it's called in insitu mining. Give us a description.

Michael McPhie: It's a Latin term for in place, meaning we're not digging a hole in the ground, we're digging a series of wells that inject a weak vinegar lemon juice strength solution into the ground. It dissolves the copper and it goes through a processing plant and is turned into pure copper sheets. So it's a process that's proven, it's been used around the world for extraction of things like potash, and it has been used in Arizona before. We call it a next generation copper deposit. Meaning because we're not involving traditional mining it's very technologically advanced and it's something that we think is much -- a real future opportunity for the state to really advance this to a world class level.

Ted Simons: Let's talk about where the copper is in the ground. You mentioned 400 some-odd feet down. Correct me if I'm wrong, but you got a water ground -- groundwater here, a clay barrier, then another aquifer and then the copper?

Michael McPhie: Correct. The copper is in what's called the bedrock. People think about bedrock, that rock that you see above ground sometimes, it's the -- that hard rock, it's deep below just like you outlined. That clay layer is an aquatart, it's actually interestingly enough, it's the bottom of a lake. It's clay from the bottom of a lake. So millions of years ago this formation was created over the top and Mother Nature has been very kind to us on this project in the sense that in the ground this rock is all broken up naturally. We don't have to do any of the water that's put into the ground is done under almost no pressure. It's a very gentle rinsing of the copper, and we bring it to the top. It's well below any water in the region.

Ted Simons: Are there concerns, if you're going water, clay table, more water, then copper, are there concerns about going through two aquifers, two potential sources of water? One source of water and maybe potential future source?

Michael McPhie: This project requires 19 different permits from the state, the federal government, environmental protection agency, and the county. The EPA, the primary authority around the design and operation of the wells. The wells themselves that are up to a thousand feet deep -- a thousand feet deep into the ground are concrete encased all the way down. They're 12 inches and the outside is concrete and you have a PVC tube on the inside. Before we're allowed to put one drop of fluid into the ground every well has to be fully tested so there's no possibility of any leaks. And secondly there's continuous monitoring of the site at all times. We know what's going on in the ground. One of the things we're talking about locally with the community is about having real time monitoring and have the monitoring on a computer or on the web so people can see what's going on at all times. So they have the confidence in what we're doing.

Ted Simons: You mentioned EPA requirements. Opponents of the project, one of their major concerns, the water supply and the idea that there was an EPA test I think in '96, and subsequent testing by different agencies, different folks that suggested there was some leaching here of material, maybe even some radio chemical. They're bringing up radio chemical possible leakage here. How do you respond to that?

Michael McPhie: There's been a lot of things that have been said. Look at the signs. The data is publicly available to anybody. They can go to the EPA or they can go to ADEQ and get copies. The water -- the former owner of the property BHP minerals, did a pilot test on here, they had an injection recovery well, and that monitor, that water quality since that production test in the late 1990s has shown for 14 years there's been no impairment of water quality. This is public record. This is proof of concept, and so it's to suggest that I don't think it's accurate, and I think it's intended to -- I'm not sure why somebody would put that out if it's not the truth.

Ted Simons: How long a process as far as the mining operation? I've heard 15-20 years.

Michael McPhie: It's a 20-year project, 25 years when you factor in the closure.

Ted Simons: What happens to the land when the project is over?

Michael McPhie: We're trying to talk with the town about land uses, this idea of a first life and a second life. The first life on about 400 acres, about a third of our property, we need it for the project. And then the rest of the land we're going to use for community amenities. We'd like to have a dialogue with the community about what they'd like to see, whether it's ball fields, agricultural, while we're in operation. And when we're finished, you have a series of wells, they sit about three feet off the ground. And they can be removed, you pour concrete down them, they're covered up completely sealed. And you cover them up and you never knew they were there.

Ted Simons: You mentioned having a dialogue with folks out there. It sounds right now like the town council is unanimously close to it against this project. What's going on here?

Michael McPhie: We've had our challenges working with the current council. I'll acknowledge that. But land use zoning processes and debates over competing land use is a pretty common thing in Arizona. It happens. So we see this as a land use zoning discussion that's going to take time. And we're here for the long haul and we're committed to trying to find a solution that people can live with.

Ted Simons: And some landowners, certainly one development operation, they're looking at what you're trying to do and they're saying this is too close to existing wells, certainly too close to what wells they plan for in the future. And they're seeing property values they think will plummet if folks know that a mine is there or was there.

Michael McPhie: Well, first off, the mining property is not new. This thing was discovered 40 years ago. It was in production 12 years ago. We bought our property in 2009 and the housing developer you're referring to bought theirs six or seven months after us with full knowledge of who we were.

Ted Simons: They're saying they did not have full knowledge, they say, by the nature of the real estate business you can't know that stuff, so they're saying otherwise.

Michael McPhie: You know, our group has been around for 30 years. Curis Resources is part of the group that's been there. We've been in this business a long time. We're a mining company. We bought the property, we were quite public about our intentions. We were in active dialogue with the town. So that's hard for me to accept that they didn't know who we were and what we were planning.

Ted Simons: OK. So what is next as far as this project is concerned? It sounds like you pulled the permit application for a while to do your own testing. Why was that done? Previous test were done, why more?

Michael McPhie: The fact is this project has already received all its permits. All the commercial operating permits for the EPA and ADEQ. And what we're doing is amending and updating the permits. We're going through a dialogue with the agencies, and in that dialogue of permitting there's questions that go back and forth. You submit a big five binders of material and what you get back are question and clarifications. That's a normal part of permitting. Because of the discussion with the state land department, I think the state land commissioner said this is one of the most valuable state trust land pieces in the entire state's history. The beneficiaries are all sorts of the beneficiaries of the state. We're talking more than $100 million worth of royalties that would be paid by us to the state land. And that is to the benefit of all Arizonans, not just Florence. So what we're doing is we're focusing on, we always have, we haven't changed gears at all. We've always said we're going to do a phase one development program, and we're going to do a phase two. Phase one is a production test. And we're going to refine some of our engineering, we're going to focus on copper recovery rates and we're just trying to make a better project. We're looking at, for example, trying to lower water use. We don't use a lot of water, but we want to use even less. We're doing -- it's an optimization program and it's the same thing we've been saying we do right from the beginning.

Ted Simons: Thanks for joining us.

Michael McPhie: I really appreciate being here.

Ted Simons: Now a recent interview with opponents of the Florence copper project, Tom Smith the Vice Mayor of Florence, and Jordan Rose, an attorney representing Southwest Value Partners, a company that wants to build homes in the area. Let's start with why you are against this project.

Tom Smith: That's a long story. Florence is the sixth oldest town in the state of Arizona. It's been doing this for 100 years. Has it been divided? Yes. We're divided by the Gila River. But the copper company coming in will have many things that might be worse for the town. For one thing, there won't be the jobs people say there are. We have in Florence only less than 4% unemployment. Which is fantastic throughout the country. So do we need jobs? We always need jobs. But not ones that may affect our town, which will affect the water supply whether anyone wants to believe it or not.

Ted Simons: Why are you against this project and the folks you represent against this project?

Jordan Rose: Sure. They're proposing to pump 15 billion gallons of sulfuric acid into the ground in the middle of a master plan, a premier, award-1ing residential master plan community. It's been featured on the covers of magazines, one national -- won national awards. In the county seat of the fastest or second fastest growing county in the country. In the nation. 16,000 acres of other landowners just adjacent to the mine are against it, and it's a bad idea.

Ted Simons: We've heard from the folks who are proponents of this project, and they're saying the biggest reason the landowners are against it is because it's going to hurt their property values, it could hurt their property values. The CEO of the company says it's no reason for it to hurt their property values, they can build alongside the mine, after the mine comes and goes.

Jordan Rose This is an experiment. It's creating Florence into a petri dish for something that's never been done in North America and never, ever has this type of project cleaned up the water supply to pre-mining conditions. So this would be a first. So 15 years ago, this site was used as a test pilot for a potential copper mining project. And from that test, which was just done for 100 days with 13 well sites, we're talking about 20 years of proposed acid, risky acid process for 20 years, over approximately 2,000 well sites, from just those 13, we're still seeing exceedences. On January 23rd they reported sulfate levels that does -- those are dangerous things, sulfate levels that exceeded standards by 12 times. There's radioactive material in the ground, the EPA has stated that.

Ted Simons: We asked the CEO about the radio chemicals, he says he never heard of it, that's not true. He said it's basically not true. He also says that the former owners have done tests there on and off for 14 years, and never once have there been water impairment issues.

Jordan Rose: That is just absolutely false there. Have been -- in fact, the former owners, BHP, have reported and admitted to 26 exceedences. There was an exceedence the week before he came on your program and stated that. His company wrote a letter to the EPA talking about the 12 times the level of sulfate level of sulfates. This is the EPA report. It says there are radioactive chemicals in the ground and they're leachable just as even in 2005, there were reports to ADEQ that those chemicals were in fact leaching. It's a problem, and that's just not true.

Ted Simons: He says granted all the major ADEQ and the EPA, environmental operating permits have all been granted, they're two-thirds through the permitting process, it's basically answering questions from the department of environmental quality. There was -- the city commissioned a third party review, and judging from what I saw, the review in general says that the mining operation is consistent with your general plan.

Jordan Rose: They didn't.

Ted Simons: They did not say that.

Tom Smith: It is -- our general plan, which was voted on by the people of Florence --

Jordan Rose: By 71% approval.

Tom Smith: Has nothing about mining anymore.

Ted Simons: But I think what the third party review again is saying is that it would be consistent with the general plan.

Jordan Rose: It did not say that. In fact, if you look at that report that was done for the town of Florence, it's riddled with question and problems that the current needs to answer and respond to. The EPA revoked their permit in 2010. It's been revoked. ADEQ, they're resubmitting everything. It's just not the case.

Ted Simons: Did the third appeared review say the ground party flow was cause no problems no, impact on the safety of the city's drinking water and no impact if the city updates or modernizes its water?

Jordan Rose: I think that would be very much taken out of context. If you look at the context of the report, and that third party review may in fact need to clarify that, because they absolutely did not say this was in the best interest of Florence, and the council took the third party review, which was done for them, it's their consultant, and determined unanimously and twice now in the last eight months voted to deny the project.

Ted Simons: State land department says they found no substantive environmental threat, not only that, but the land department says this may well bring in more money to the state than any parcel of land the state land department has dealt with in the past.

Tom Smith: Did they say anything about the say the state of Arizona tax benefit to copper companies, which would deduct a lot?

Ted Simons: We could talk about that, but they're saying it would bring in maybe $100 million in royalties.

Jordan Rose: But this particular property, this 160 acres, the beneficiary of this property is not the schools, the taxpayers in Arizona. It's the government subsidized retirement home in Prescott. And the public prison system. So this is not the schools. This is not anything like that. In fact, downstream of where the pollution would flow is about 12,000 acres of state land, most of which is benefiting the schools. And that will all be diminished in value. The state land department, they haven't stated whether they're for or against. They're in the exploration stage. We would very much hope they would recognize local control and private property rights as we have in the state forever.

Ted Simons: We should say if they haven't made a decision yet, they're certainly -- they seem to be supportive and very much so.

Jordan Rose: If you read the letters from state land, they always say that they're still looking into the project and they'll make a determination. Our environmental -- let's look at this. Think about it. If we were talking about -- it's almost ridiculous. If we were talking about Desert Ridge where -- a metropolitan community in the community of Phoenix, where the state land has parcels. If Curis decided to mine copper in the middle of Desert Ridge, which is exactly analogous to this situation, we wouldn't even be having this conversation.

Ted Simons: Though I think we could safely say this area of Florence is not -- the plans are for it to be similar to Desert Ridge but it's not there yet. And with that in mind let's talk about why housing, and you mentioned this at the start of the interview, housing would be preferable to this mining operation.

Tom Smith: You have to realize there is no second life to this property. When the mine is finished, it would be riddled with wells, capped wells. Secondly, there's going to be huge holding ponds in a city block, 40 feet high.

Jordan Rose: 96 acres.

Tom Smith: Covered over with all these residues from the mine, which are going to be radioactive, it's already been proven, and many of them. There's a lot in there. They're going to be drying out, they will be covered over, buried and left there.

Ted Simons: You had a citizen survey that showed 36% of those surveyed in the town of Florence thought this was a good idea. 32 close but 32% thought it wasn't such a good idea and 28 were undecided. We'll throw the 28 out because they're not playing right now. 36 -- in this citizen survey, most like the idea.

Tom Smith: There are many things wrong, and it was a survey, but it was a lot closer than you stated on the other two. The second thing is, there was 22% undecided. If you look at it now, go there today, which I do every day, walk up and down Main Street, all the emails I've received from the people of Florence, all the people that call me, stop and talk to me, my phone number is in the book, they can call me any time, at least -- at least 90% against it.

Jordan Rose: And in fact, in all of the public hearings we've had, between three times and six times as many people came out in opposition, residents of Florence as to support the project. Councilwoman Woolridge the night of one of the many multiple votes against the project, said, I wish admonish the copper says, says stop using that citizen survey because all it was was an unscientific mailing to people responded to before anyone was even educated to the project.

Ted Simons: The idea that a housing development on land out in Florence, bare land in Florence is a better idea than insitu mining which the company says can be capped, covered and put back into some sort of at least appearances of natural conditions, some would say, housing development is better for that land than leaving it to nature and maybe using something later on?

Tom Smith: In the long run, yes. Because that is housing and commercial. And that can go a long way over a period of a lot of years once the economy starts picking up to produce a lot more tax monies than this mine will ever give the town.

Ted Simons: For those who say for every dollar that you spend on housing, that you invest in housing you have to spend $1.25 or so in services you say --

Tom Smith: I'd say the commercial will take care of that.

Jordan Rose: We have the preeminent economist in the state say in a public report that absolutely this master plan community will have much more benefit to the state and the people than this copper acid risky project.

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