TALK OF THE TOWN: IS COPPER UP TODAY?
By JOHN COLLINS RUDOLF
New York Times News Service
MORENCI, Ariz. — For this isolated mining town, which lives and dies by the price of copper, the last few years have been a roller coaster ride of steep climbs and sudden dips. Over all, however, the direction seemed to be up.
Copper’s dizzying climb began in 2003, when prices surged in response to booming demand from China and other fast-industrializing economies. The price spike spurred a major revival of Arizona’s once-battered mining industry, and towns like Morenci, once devastated by layoffs, returned to flush times.
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This past summer, even as the dire housing market contributed to widespread job losses and other economic woes in Arizona, copper prices reached a record, drawing thousands of new workers to the mines, where jobs were plentiful.
But the arrival of the credit crisis this fall has stalled the mining boom. Reeling financial markets stripped copper of 60 percent of its value in only a few months, and expansion projects in Arizona, the nation’s leading copper-producing state, are being postponed.
But the arrival of the credit crisis this fall has stalled the mining boom. Reeling financial markets stripped copper of 60 percent of its value in only a few months, and expansion projects in Arizona, the nation’s leading copper-producing state, are being postponed.
A sense of anxiety permeates Morenci, where almost everyone follows copper’s daily rise and fall on financial cable shows and the Internet.
"Everybody is just wondering day-to-day what is going to happen," said Hector Ruedas, a Greenlee County supervisor and member of the Morenci school board who once worked in the mines.
The speed and the depth of the price plunge has taken even longtime industry observers by surprise.
"The end has come just incredibly abruptly," said Nyal Niemuth, chief mining engineer for the Arizona Department of Mines and Mineral Resources. "There weren’t many of us predicting this collapse."
In late October, Freeport-McMoRan Copper & Gold, the copper industry’s largest employer in Arizona, announced plans to lay off 600 mine workers in the state. Those layoffs came in addition to hundreds of independent contactors already let go by the company.
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"Most of those employees were recently hired, many in anticipation of expansions, which have been deferred," Eric Kinneberg, a company spokesman, said in an e-mail message.
Demand for copper — a key material in construction and manufacturing — has long been a proxy for the overall health of the world economy. After a steep slide this autumn, prices stabilized in recent days. Another fall could signal that a more prolonged global recession is on the way.
At today’s price of about $1.67 a pound, copper remains marginally profitable to produce at many Arizona mines, giving some mining communities hope they may avoid broader layoffs.
