The future makes strong demands on American copper
On the last Friday night in January, Alex Jacobs stood before a town meeting here and told the townsfolk that the Cypress Bagdad Copper Company mine was shutting down.Skip to next paragraph
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Those words from the general manager came as quite a blow because this is a pure company town, with virtually no income except the mine.
Up a rolling and pitching desert highway through the rocks and saguaros, Bagdad is so isolated that it is nearly impossible to live here and work anywhere else.
The mine closing also came as quite a blow in Phoenix, where C. J. Hansen, president of the Arizona Mining Association, felt that he had lost one of his best mines.
American copper mines are in economic crisis. Everybody from the out-of-work miners in Bagdad to copper company managers are taking stock these days of what their career strategies should be. The business has changed.
Copper prices have been falling since 1980. Arizona, which produces two-thirds of the nation's copper, is working at about 70 percent capacity, with half the work force it employed in 1981. Sixteen of 27 copper mines are shut down.
Under the old market conditions, copper companies could slow production when demand fell to keep prices at a profitable level. American companies no longer have that control of the market.
Government-owned mines in Chile, Peru, Zaire, and Zambia keep producing at full tilt, regardless of copper prices, to create jobs and keep much-needed foreign currency flowing in, American businessmen lament.
Exaggerating the problem is the commodity trading market. Where copper prices used to be a straightforward measure of demand, Mr. Hansen explains, now commodity speculators set prices: ''When times are good, prices are too high, when they're bad, prices are too low.''
Now, they are low.
The miners of Bagdad generally appear to have a keen grasp of the copper business. Few here blame Cypress Bagdad or its parent company, Amoco Minerals in Denver (where the decision to close the mine was made), or its parent company, Standard Oil of Indiana, for the closing.
Some feel that Amoco Minerals knew what was coming and could have told the miners sooner. But otherwise, there is little resentment in this town of about 2 ,600 people. Cypress Bagdad was the only nonunion mine in Arizona, and the workers had generally good relations with the company.
Now, families are beginning to pack up and leave town, where some of them have lived for generations.
Of 750 employees, the company has kept 150 of the most senior to maintain the mine, continue leaching the ore already mined, and to plan for eventual reopening.
The mine will open again when the price of copper rises high enough and shows enough stability to make the mine pay.
Mr. Jacobs told the town that it could be two months or two years, though probably not longer than that.
Up to six weeks ago, life was stable and comfortable here. The three- and four-bedroom ranch-style homes are only about six years old, and the company rents them for $70 a month and less.
There is a suburban-looking shopping center at the center of town, two restaurants, a cable television company, and 11 churches. The movie-house operator has already closed shop and moved out.
Starting wages amounted to roughly $23,000 a year, and with the low expenses here, the miners had a fair amount of disposable income. Much of it went toward boats, campers, four-wheel-drive vehicles, and second cars.