Task force works to reopen Continental Pit in Butte- 20 years ago today: Mine closure revisited

Butte needs the mine, and the mine needs Butte.

That theme emerged from the inaugural meeting of the Mining Task Force, recently convened to explore steps the community might take to help Montana Resources resume mining in the Continental Pit.

By Roberta Forsell Stauffer of The Montana Standard

The Montana Economic Revitalization and Development Institute assembled the group, similar to one MERDI President Don Peoples Sr. put together back in the mid-1980s to help jump-start mining then.

MERDI Vice President Jim Kambich (406-782-0463) said it’s critical that community leaders take whatever action they can to ensure the mine, with its 300-some jobs, re-opens and to ensure that mine owners know the community is behind a restart effort.

“ If there’s anything we can do that could materially affect the decision, we need to do that,” Kambich said.

Montana Resources President Steve Walsh said the 1980s’ task force was “ extremely instrumental” in resurrecting mining and the 2003 effort could play a similar role.

“ There are parallels that can be drawn between what happened then and what’s happening now,” Walsh said. “ We need to try to emulate what was done in ’86, and the only way we’re going to do that is by having the full support of the community.”

When mining resumed in the 1980s, the Montana Power Co. helped out with a favorable electricity rate, local government provided tax incentives, and the Montana Board of Investments loaned money, Walsh said.

MR in turn paid an aver age of $13 million in wages each year between 1986 and 2000 and an average of $3.6 million each in state and local taxes. In contrast, its estimated property tax bill for 2003 is $664,000, a huge revenue loss for local schools and government.

Ultimately, the price of copper will be the most important variable in a startup decision, but incentives could again play key roles.

“ It’s gonna be a hard time for us to get this mine going again,” Walsh said. “ We have some problems that we need help with.”

The company would need a loan of between $8 million and $12 million to start up again, according to Walsh.

Also, the first couple years would entail a lot of earth moving to recover rel atively low-grade ore, but after that, the grade would rise and the “ stripping ratio” — the amount of work need ed to get it — would fall.

“ The mine has a bright future,” Walsh said.

During a presentation at the Dec. 31 task force meet ing in Butte, he predicted a mine life of 23 more years, with 2.3 billion pounds of copper left to be extracted from 424 million tons of remaining ore reserves.

Once a restart decision is made, gearing up to resume mining would take about two months, Walsh said.

He said he’s heard discussions that the concentrator was left in poor condition when it was shut down in 2000, but he said they are “ absolutely false.

“ The concentrator is in excellent shape,” Walsh said, as is the primary crusher and the tailings pump houses. “ The infrastructure has been maintained during the suspension so we’d be able to start up.”

He also believes the work force is still there.

“ Enough people have kept in contact with us that we could get the key people back that would be absolutely necessary to get this place going again,” Walsh said. “ If we get the key people back that know what to do, we can train the other ones.”

Walsh said the operation was making a profit just before it shut down at the end of June 2000. Copper was selling for about 83 cents a pound, and the company’s electricity contract was for $25.50 a megawatt-hour.

When that contract expired, MR faced spot market power price of $672 a megawatt-hour.

Copper now sells for about 69 cents a pound, and the electricity market seems to have somewhat returned to normal, Walsh said.

In the short term, MR will be looking for community support as the 2003 Legislative session commences.

Any measure requiring mandatory back filling of open pits “ would kill our operations,” Walsh said, and possible legislation to add another tax on the net proceeds of mining operations would also hurt.

The most important thing for Butte residents to remember, Walsh said, is that the mine is not closed — operations are merely suspended — and the company is fulfilling all of its obligations while it waits until the time is right to reopen.

“ We have a future here,” Walsh said. “ There’s a lot of copper left to be mined and sold.”

— Reporter Roberta Forsell Stauffer may be reached via e-mail at [email protected].

http://www.mtstandard.com/newslocal/lnews2.html

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20 years ago today: Mine closure revisited

By Barbara LaBoe of The Montana Standard

Don Peoples Sr. was driving back from Seattle.

Glenn E. Boss was reporting to work as a pit mine truck driver.

And Frank Gardner was preparing for the last in a series of tough announcements.

All three men remember exactly where they were on Jan. 6, 1983, because it was when Arco, through Gardner, announced the suspension of the last of Butte’s mining operations.

The last miners didn’t stop working until June 30, 1983, but it was 20 years ago today that Butte learned the last of the Mining City’s mines would soon cease operations: putting 700 miners out of work and the future of the town in jeopardy.

The headline in The Montana Standard the next day said it all: “ Butte mining to stop.”

“ It was a really ugly time,” said Peoples, then Butte’s chief executive. “ People were upset, and everyone starting pointing fingers of blame. A lot people needed to vent.”

“ It was disbelief,” said Boss, who, like many, didn’t believe mining would ever completely stop in Butte. “ Everybody thought (mining) was forever, something you had and your kids had.”

“ That whole period was really traumatic,” agreed Gardner, a Butte native. As head of local Arco operations — the Anaconda Minerals Co. — Gardner had to deliver the bad news to Butte bit by bit in the early 1980s, starting with the surprise closure of the Washoe Smelter in Anaconda and ending with the Jan. 6 announcement. “ When I came back in 1979 there were 1,800 employees, and it just kept getting whittled down.”

“ It was just really tough,” he said recently from his win ter cabin near Anaconda. “ It’s not nice to see your face on Tom Brokaw saying it’s the end of mining in Butte, and here’s the guy who announced it.”

In the 20 years that have passed there’s been both good and bad news on the mining front. Dennis Washington and Montana Resources reopened the mine in 1986 and ran it for 14 years with out interruption. Miners like Boss went back to work, but were again laid off in 2000 when the mine suspended operations because of high energy costs and low copper prices.

Local leaders are hopeful the mine can be reopened again with a concentrated community push (see related story), but for now Butte is in much the same situation it was in 1983. Major employ ers are struggling, workers have lost their jobs and the mine is once again silent.

“ I really miss hearing those trucks,” Peoples said of the open pit mining near his home. “ We need to get them back.”

The Closure

While many said the final suspension of mining in 1983 was a shock, it had been coming for years.

The price of copper was low — 72 cents a pound on the day of the announcement — and parent company Arco had been shutting down pro grams little by little to save money since its purchase of the mining operations in 1976.

Layoffs in January 1980 reduced the work force in Butte by 200 and in Anaconda by 100. In September, the closure of the Washoe Smelter in Anaconda and refinery in Great Falls caused another 1,500 employees to lose their jobs. In June 1981, another 400 employees in Butte were laid off, followed by 200 more in January 1982.

Then in April 1982, Arco laid off 270 more employees and effectively ended underground mining by shutting off the pumps that kept water out of the mines and the main Berkeley Pit.

It was that announcement, said retired miner John T. Shea recently, that led many old-timers to believe the end was near. So when workers were called into a shop on Jan. 6, 1983, Shea was ready for the news of the final mining suspension.

“ We knew it was coming,” he said. “ The price of copper was bad and you just can’t compete against that.”

Shea, then 59, was able to take retirement when the mine shut down. “ But a lot of those guys had youngsters and a lot of them had to leave Butte,” he said. “ That’s what really started the population here going down.”

For Boss, it meant the end of 14 years of mining. His wife had to go to work to help support them and Boss got by doing upholstery work from his home.

“ They were laying off a few at a time, but then we got word that’s it, no more layoffs — it was over,” he said.

The news came at a particularly hard time when the nation and state were in the midst of an economic recession. The Jan. 8, 1983, Standard carried a story that in December 1982 state unemployment rates — 9.6 percent — were the highest December number since the Great Depression.

In the next two years Peoples personally knew three men who committed suicide as they faced a future without employment or hope.

Peoples likened the mine news in 1983 to “ being told a patient is terminally ill,” he told reporters then. “ You first feel frustration, anger and then sit back and determine what to do.”

New and old challenges

While few believed him at the time, Gardner said that in 1983 he fully intended to bring the mine operations back within a year. That didn’t happen, but Gardner was still committed to reopening the mine and kept working towards that goal.

The work went into overdrive in 1985 when Arco decided it was getting out of the mining business completely. That meant if another buyer wasn’t found by 1986, Arco would begin dismantling the concentrator to save money on taxes.

“ And until then I really hadn’t realized the potential impact (of the closure),” Peoples said. “ We knew if the concentrator was dismantled that mining would never return to Butte.”

Committees were formed to identify obstacles in reopening and everyone from local businessmen to the governor to Environmental Protection Agency officials were called in to help with the push. In September of 1985 — just months before the Arco January 1986 deadline — Missoula industrialist Dennis Washington agreed to buy the mine and reopen the Continental Pit. The mine officially reopened in April of 1986 bringing 300 jobs back to town.

Gardner, who had to deliver the bad news to Butte in 1983, was thrilled with the chance to reopen the mine and the jobs and money it brought to Butte. He is officially retired, but still sits on the Montana Resources management committee. And he’s convinced the 1983 suspension, tough as it was, was the right one.

“ If we hadn’t have done that the mine would have gone the way of the smelter in Anaconda and there would be nothing left,” he said. “ We wouldn’t have been able to reopen the mine and had another 13 or so years of mining.”

Boss was one of the miners rehired in 1986, but after the second lay off and a series of temporary jobs — he now works at the Montana Resources’ guard shack while a water treatment plant is being built — he wonders if mining is the best profession in which to be.

“ If anything (both closures) taught me that this seems to be what mining is — it’s either boom or bust,” he said. “ It’s good money when you’re working, but you sure can’t rely on it.”

But Peoples and the others pushing for a reopening, say mining, even with its dependence on copper prices, is vital for Butte.

“ Everyone says we need high-tech jobs and we do, and we are creating them, but we also need those basic industry jobs back,” Peoples said, estimating Butte’s lost 1,000 related jobs since the mine closed in 2000.

“ We can’t sit around and just say `Oh poor me,”” he said. “ We’ve got to get this town fired up to replicate what we did in 1986. We’ve got to get the fire back in our bellies.”

— Reporter Barbara LaBoe may be reached via e-mail at barbara.laboe@mtstandard.

http://www.mtstandard.com/newslocal/lnews1.html