Freeport to cut 430 jobs at Sierrita Mine, consider shutdown

Freeport McMoRan Inc. will eliminate 430 jobs — more than one-third of the workforce — at its Sierrita Mine in Green Valley in January because of plunging prices for the molybdenum and copper mined there.

The company is also evaluating the economics of shutting down the operation, Freeport officials said Thursday.

For now, production at the open-pit mine will be cut 50 percent, said Colette Brown, Freeport’s Southern Arizona regional community development manager, in an email to the company’s Green Valley-based Community Partnership Panel.

The Phoenix-based company had already announced another 130 job cuts at the Sierrita Mine in August. About 1,310 people currently work there, and the August job cuts have yet to take effect.

The company anticipates the Sierrita layoffs will occur between Jan. 11 and Jan. 25, 2016, Brown wrote. Those whose jobs are eliminated are encouraged to apply for openings at Freeport mine sites in Morenci in Eastern Arizona, at the Chino Mine near Silver City, New Mexico, and the Climax Mine in Colorado, Brown wrote.

These are the latest in a series of job losses at Arizona mines this year due to the sinking price of copper and, in Sierrita’s case, molybdenum, as well. Freeport suspended mining in Miami, in Eastern Arizona, in August, and Asarco announced that month that it would lay off up to 211 workers in Hayden.

At the start of this year, Freeport was the ninth-largest employer in Southern Arizona, with 5,800 employees, the Star 200 survey showed.

The company says the Sierrita Mine provides $255 million in annual economic benefit to Pima County through taxes, wages and spending by the company and its employees; and a total of $357 million to the state economy.

The cuts will have a dramatic impact on the Green Valley-Sahuarita economy, as many of the miners live there, said Don Weaver, president of the nonprofit Green Valley Council.

“We think Freeport McMoRan is one of the best corporations in the area. They support a lot of the local entities with their investment fund,” said Weaver. “With these employees looking for new work, there will be demand on social services in Green Valley like the food bank and other organizations.

Back to homepage

Subscriber Login

Keep reading with a digital access subscription.

Subscribe now

“The problem with Green Valley is that we just don’t have any big companies that will be in a position to take them. They’ll probably go to Tucson or somewhere else,” he added. “If these people have to move, obviously a lot of homes will be on sale” in Green Valley and Sahuarita. “It’s going to have a real direct impact.”

One cutback Weaver said he’s particularly concerned about would be to the company’s Green Valley/Sahuarita Community Investment Fund, which awarded $577,000 in grants to various community nonprofit programs in 2014 and another $555,000 this year. The fund was established in 2010, and the money goes to organizations such as the local food bank and local schools, as well as the council itself, which last year got $65,000 from the fund for buffelgrass eradication.

But while Freeport is evaluating potential reductions in such contributions, “there is no consideration being given to eliminating community support contributions,” Brown said.

In explaining the Sierrita cuts, Brown’s email focused mostly on what she called deterioration of the global molybdenum market.

Sierrita’s cost structure and by extension its profitability depends heavily on molybdenum prices, but those have dropped largely because low oil prices have triggered a decline in oil and gas drilling and reduced heavy equipment investments, Brown said. Those activities all require the use of high-grade and stainless steel, both of which require molybdenum, Brown said.

The Sierrita Mine isn’t likely to close forever even if it shuts down soon. Its mineral deposits could last until 2083, giving it by far the longest potential life span of any of the company’s 22 mines worldwide, a 2014 Freeport report shows.

A Green Valley community activist who has focused on water issues, Nancy Freeman, said that since Freeport replaced two community water wells back in the 2000s that had been tainted by sulfate pollution leaking from mine tailings, the company has been a good neighbor.

The Sierrita Mine tailings impoundment will now rise only 4 feet next year instead of the typical 8 feet, if the 50 percent production cut sticks, Freeman noted, a lower profile she welcomes. “Its footprint will never disappear,” she said.

The job cuts come six years after it appeared Freeport would expand operations in the area — with copper prices soaring then — when it purchased the adjoining Twin Buttes Mine in Sahuarita, which has been shut since 1994. But that mine has not reopened.