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Rosemont pluses for Pima put at $9 billion

Rosemont pluses for Pima put at $9 billion

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A new study from a regional economic development agency predicts $9 billion in economic benefits in Pima County over 21 years from the proposed Rosemont Mine.

The study from Tucson Regional Economic Opportunity is drawing criticism from Pima County officials who oppose the mine, however, because it didn't spell out the costs to society from its environmental impacts.

In this, the fourth study of the proposed mine's economics, a TREO consultant predicts it will generate an average of 1,172 outside jobs from an average of 421 jobs at the mine. The study was paid for by TREO and used data supplied by Rosemont Copper Co.

"Resource industries tend to have greater impacts than other industries as a general rule," said Sarah Murley, economist and partner in the Phoenix firm Applied Economics, which wrote the new study.

"Plus, no matter what your industry is, the more you buy locally, the greater the secondary impact you will have on the local economy. As it turns out, Rosemont is able to purchase a lot of goods and services that they use locally," she said.

But in a letter to TREO president and CEO Joe Snell, County Administrator Chuck Huckelberry said most large public works and industrial undertakings undergo traditional cost and benefit analyses. "The cost side of the equation is completely omitted from TREO's analysis," he wrote. "I appreciate this information, but I had hoped for a more balanced and analytical … analysis."

TREO spokeswoman Laura Shaw, however, said this analysis, like economic impact studies the agency does for all large prospective employers, is not meant to measure social or environmental impacts. It strictly measures a project's economic impact based on its jobs and capital investment, "thus helping the community make decisions. "In other words, it is up to the community to take that information and determine the ultimate fit."

The open-pit mine would be about 30 miles southeast of Tucson, on the east side of the Santa Rita Mountains, on about 4,400 acres of public and private land.

Specifically, the TREO report said:

• Rosemont Copper would make between $90.4 million and $158.1 million in annual purchases, and have an annual payroll of $19.5 million to $26.2 million.

• The mine would directly and indirectly generate $75.2 million in personal income in the county.

• Rosemont Copper is expected to invest about $897 million in the mine and related processing facilities, with about $355 million being spent locally.

• The mine would employ a range of 350 to 480 people over its lifetime, and they in turn would generate 900 to 1,600 other jobs. A 2009 study by Arizona State University predicted the mine would indirectly generate an average of 1,700 jobs.

• Mine employee purchases would generate a total economic impact of $21.7 million to $29.2 million in the county annually.

• Rosemont would pay about $3.5 million annually in property taxes and $2.8 million in severance taxes; and $11 million in construction sales taxes while the mine is under construction - for a total of $136.7 million over the mine's life. That assumes a copper price of $1.85 per pound, compared to today's $4.35 to $4.40 a pound.

The question of costs versus benefits isn't a new issue for Rosemont economic studies.

Two groups opposed to the mine commissioned studies in 2007 and 2010 that hammered at the cost issue.

The 2007 study by the Sonoran institute for the group Save the Scenic Santa Ritas predicted negative financial impacts on tourism, additional public expenses for schools, property value declines due to degraded views and dust pollution, additional expenses and impacts associated with power lines and reduced surface and groundwater supplies.

But the author of the second study, Thomas Power, has also said it's difficult to put numbers on some environmental costs. His 2010 study for the Mountain Empire Action Alliance, a Sonoita group, didn't try to do that.

Authors of the 2009 ASU study, economist and professor Lee McPheters and then-Arizona Department of Mines and Minerals Director Madan Singh, said critics have greatly overestimated impacts on tourism and that the large number of mining-related firms in the Tucson area have helped property values.

Countered Pima County Supervisor Sharon Bronson, "If you want to be serious about economic development, you have to be serious about numbers and facts and the costs have to be included in a benefit analysis."

Bronson, a co-chair of TREO's board, added, "I have been a supporter of economic development but it doesn't occur in a vacuum. We need all the facts on how we will grow the economy in a sustainable fashion that will benefit the region at large."

But Frances McLane Merryman, TREO's secretary-treasurer, said that given TREO's role in recruiting, expanding and creating jobs in industries that sell products outside the region, it's the group's job to look at economic impacts - while it is the jobs of Huckelberry, the U.S. Forest Service and other governments to assess other costs.

"To fault the TREO analysis because it's not looking at the costs and benefits that are reflective of others' jurisdictions is to use a false premise," said Merryman, a vice president for wealth strategies at Northern Trust Bank.

AT A GLANCE

Tucson Regional Economic Opportunity

• TREO's fiscal year 2011-12 operating budget is $2,118,700, with funding split 53-47 percent between the public and private sectors.

• Pima County contributes $211,000 annually to TREO. Rosemont Copper has been a TREO investor since 2008.

• County Supervisor Sharon Bronson and Rosemont Copper Vice President Jamie Sturgess are TREO board members.

• TREO has not taken a position on the mine and doesn't plan to.

Source: TREO

Contact reporter Tony Davis at tdavis@azstarnet.com or 806-7746.


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