Mining projects forge ahead despite copper price plunge

Last time we here at The Footprint checked in on Rosemont Copper, and their bid to build a vast open-pit copper mine in the heart of the Santa Rita mountains south of Tucson, the project was riding high on record copper prices and a flood of investment capital into the mining industry.

What a difference a few months makes.

The price of copper has been absolutely clobbered since the onset of the financial crisis in September, falling almost 60 percent from its high of $4 per pound this summer.

What does that mean for projects like Rosemont? Well, it depends who you ask.

Jan Howard, spokeswoman for Rosemont Copper, says that the original feasibility study for the mine, completed in July 2007, calculated that the mine would be profitable with copper at $1.50 per pound.

When copper prices were hovering around $3.50 per pound, that seemed almost extravagantly conservative. But with copper trading at about $1.65 on Wednesday, you can bet that Augusta Resouces (the Canadian mineral exploration firm behind the project) executives are definitely starting to sweat.

Nevertheless, they appear to be keeping their game faces on.

“I think that this is a very viable project,” says spokeswoman Howard. “I’m not going to speculate further.”

Yesterday I also had the chance to talk with Madan Singh, the director of the Arizona Department of Mines and Mineral Resources, who says that Rosemont Copper will probably forge ahead with the mine.

“Rosemont is still 2 or 3 years away from starting. In a few years, the price of copper may be entirely different than it is right now,” he says. “Unless they run into some liquidity problems, I don’t think they will be affected very much by the price of copper at this point.”

Liquidity problems? Who’s having liquidity problems now? Oh yeah,everyone.

Meanwhile, the AZ Daily Star reports that an even bigger project — the proposed Resolution Copper mine, near Superior, is running into some money problems.

Via StarNet:

Funding for a controversial underground copper mine being developed near Superior has been temporarily slashed by the majority stakeholder in the project.

British miner Rio Tinto PLC has cut funding for the project, which is being directed by Resolution Copper Co. David Salisbury, Resolution’s president, said Tuesday that the company’s 2009 budget has been cut by about two-thirds and that an undetermined number of contract workers will be laid off.

“The whole global-finance issue is impacting us,” Salisbury said.