By Ernest Scheyder
SUPERIOR, Ariz. (Reuters) – Early last year, Darrin Lewis paid $800,000 for a hardware store in a tiny Arizona town where mining giant Rio Tinto Plc hopes to build one of the world’s largest underground copper mines.
Rio buys materials from Lewis’s Superior Hardware & Lumber for its Resolution mine site, accounting for a third of the store’s sales and helping to keep it afloat during the coronavirus pandemic.
But U.S. President Joe Biden put the mining project on hold last month in response to the concerns of Native Americans who say it will destroy sacred land and of environmentalists who worry it will gobble up water in a drought-stricken state.
That’s fueled anxiety among Lewis and others here in Superior, Arizona, who want to reap the economic benefits of a mine that would harvest more than 40 billion pounds of copper.
“I sunk everything I have into this place,” said Lewis, surrounded by hammer drills, wrenches and other goods in his store. “It would absolutely devastate us if this mine doesn’t open.”
In halting the project, Biden reversed a decision by predecessor Donald Trump that would have given Rio land for the mine. Biden ordered more government analysis of the project.
The ongoing fight pits conservationists and Native Americans against local officials and residents who support its economic benefits. The complex debate is a harbinger of battles to come as the U.S. aims to build more electric vehicles, which use twice as much copper as those with internal combustion engines. The Resolution mine could fill about 25% of the demand for U.S. cooper.
The Arizona dispute centers on Oak Flat Campground, which some Apache consider home to deities known as Ga’an. Religious ceremonies are held at the site, near the San Carlos Apache Reservation, to celebrate teenage girls coming of age. Many Apache have ancestors buried under the volcanic rock.
In 2014, the Obama administration and Congress set in motion a complex process intended to give Rio 3,000 acres of federally-owned land, including the campground, in exchange for 4,500 acres that Rio owns nearby. Biden has paused that transfer.
The White House did not respond to a request for comment.
“If Rio gets this place, then the mine will kill the angels and the deities that live here,” said Wendsler Nosie, a San Carlos Apache tribe member who has led a protest camp for 18 months at the site. A sign there describes the land, known as Chi’chil Bildagoteel in the Western Apache language, as the physical embodiment of the earth’s spirit.
Nosie has marshaled widespread support for his cause, helped by rising global attention to the rights of indigenous peoples. Rio itself fueled that cause last year when it blew up culturally significant Aboriginal rock shelters in Australia.
If the land swap is approved, Rio has said it would keep the campground open for the next few decades before the underground mine causes a crater that would swallow the site. The company has also said it would seek tribal consent for the project and study ways to avoid causing the crater.
“The land exchange gives us the opportunity to collect more data, then we can refine our plans and look for ways that we can do further avoidance and minimization” of site damage, said Vicky Peacey, a senior permitting manager for the Rio project.
Rio, which is based in Australia and the United Kingdom, has also promised to preserve other cultural sites including Apache Leap, a rock cliff that overlooks Superior and where Apaches jumped to their deaths to avoid capture by U.S. troops in the late 19th century.
Politicians in Superior – a town of 3,000 residents that voted nearly two-to-one for Democrat Biden last November in a majority-Republican county – are now prodding the president to change his mind.
The land swap, if Biden approves, would also let the town of Superior buy more than 600 acres that officials say is crucial to diversifying the local economy by expanding the airport, developing an industrial park and building affordable housing.
“President Biden is going to have to make some courageous decisions,” said Mayor Mila Besich, a Democrat.
Mining is essential to accomplishing Biden’s goal of expanding EV production, she said. “We’re going to need more American copper,” she said.
While the region has long been popular with hikers and campers, it is better known as the “Copper Corridor,” with mines from Freeport-McMoRan Inc and others.
The closure of the Magma copper mine in 1996 devastated Superior’s economy. Officials have pinned their hopes now on Resolution. Since the copper deposit was first discoved in 1995, Rio and minority partner BHP Group Plc have spent more than $2 billion to dig an exploratory mine shaft and dismantle an old Magma smelter. They have yet to produce any copper. BHP declined to comment.
More than half of the buildings in Superior’s downtown sit empty. Several Tesla Inc charging stations hint at the town’s aspirations to be part of the EV boom. Nikola Corp and Lucid Motors are building their own EV plants less than 50 miles (80 km) away.
Rio has promised to hire 1,400 full-time workers at an average annual salary of more than $100,000. That’s nearly half the population in a town whose median income is a third below the national average.
“What’s sacred to my community is that people have a job and have a home,” said Besich, the mayor.
The mine would boost state, local and federal tax coffers by $280 million annually and add $1 billion to the state’s economy, Arizona’s governor said.
Besich pushed back when studies showed Rio would only pay the town $350,000 a year in taxes, far below the $1 million would need annually for increased police, firefighting and road maintenance.
Rio agreed to pay the town more, to guarantee Superior’s water supply and to donate $1.2 million to the school district. Superintendent Steve Estatico said without Rio’s support the district’s schools – where enrollment has dropped 13 percent since 2016 – may close.
“Rio’s had to learn over the last few years that it cannot take host communities for granted,” Besich said.
The San Carlos Apache – one of the first Native American tribes to endorse Biden’s presidential bid – have not negotiated with Rio because its tribal council favors direct talks with the U.S. government, said Chairman Terry Rambler.
Rio’s copper chief, Bold Baatar, said he hopes to negotiate directly with the tribe when he visits Arizona as early as June, once pandemic restrictions allow.
“We are hearing the concerns from everyone,” Baatar told Reuters. “There will not be a mine until we achieve maximum effort to seek consent.”
Not all local Native Americans oppose the mine. Some members of the White Mountain Apache tribe, whose reservation is just north of the San Carlos Apache’s, say they do not consider the campground a sacred site.
“The belief that the site is religious, that’s news to me,” said Alvena Bush, a White Mountain Apache councilwoman who supports the project.
Rio has dug a mine shaft nearly 7,000 feet (2 km) underground on land it owns near the campground. The bottom of the shaft has become a staging ground for future mining operations.
The miner is draining water from the nearby copper deposit to make it easier to extract. More than 600 gallons of water are pumped each minute to treatment plants on the surface for use in local farming.
Rio plans to mine the copper using a technique known as block caving. It involves carving a cave out of a large section of rock, which then collapses under the weight of the rock above, creating a crater 2 miles (3 km) wide and 1,000 (304 m) feet deep.
This method would damage aquifers that feed two local springs, according to an environmental study from the U.S. Forest Service. The entire mine would reduce available groundwater in the area, which has been in a drought since the late 1990s, the report said.
“This land is going to be worthless if there’s no water to go with it,” said Henry Munoz, who leads a group of retired Superior miners opposed to the project.
Biden is expected to decide later this spring on whether to give Rio the land for the mine. Lewis, the hardware store owner, hopes his plight will be considered among all the competing interests.
“If I had one thing to say to President Biden, it would be: ‘Let the mine open,'” he said.
(Reporting by Ernest Scheyder; additional reporting by Caitlin O’Hara, Sandra Stojanovic and Trevor Hunnicutt; editing by Amran Abocar and Brian Thevenot)
Canada posts hefty job losses in April as third wave bites
By Julie Gordon
Some 207,100 jobs were lost in April, more than the average analyst prediction for a loss of 175,000. The unemployment rate climbed to 8.1%, missing analyst expectations of 7.8%. Employment is now 2.6% below pre-pandemic levels.
“This episode seemed to be a little more impactful in that it led to a big decline in full-time jobs and specifically in private-sector employment,” said Doug Porter, chief economist at BMO Capital Markets.
“There were some heavy hits in education and culture and recreation. So it seems like the third wave bit into other sectors a little bit more deeply than the second wave.”
Full-time employment was down by 129,400 while part-time employment fell by 77,800 positions.
With many retailers shuttered in April and the restrictions also hitting hotels, food services and entertainment, service sector employment plunged by 195,400 jobs. Employment in the goods sector fell by 11,800.
As COVID-19 infections surged in April, a number of Canadian provinces imposed fresh restrictions, including shuttering or limiting non-essential businesses and closing schools. Cases are beginning to decline, but reopening is still weeks away and economists expect further job losses in May.
Canada has so far fully vaccinated just over 3% of its nearly 38 million residents, while more than 36% have received a first dose. By the end of June, Canada expects to have received 40 million doses.
Long-term unemployment increased by 4.6% to 486,000 people, which suggests some labor market scarring is beginning to show, said Leah Nord, a senior director at the Canadian Chamber of Commerce.
“The job prospects for displaced workers grow slimmer with every month in lockdown as more businesses throw in the towel,” she said in a statement.
Total hours worked fell 2.7% in April, while the number of people working less than half their usual hours jumped 27.2% to 288,000.
“The hours worked numbers were I think weaker than had been expected,” said Andrew Kelvin, chief Canada strategists at TD Securities. “I think it suggests a weaker April than the Bank of Canada would have had penciled in.”
The Bank of Canada in April sharply boosted its outlook for the Canadian economy and signaled interest rates could start to rise in 2022.
The Canadian dollar was trading 0.3% lower at 1.2187 to the greenback, or 82.05 U.S. cents, after touching on Thursday its strongest level in 3-1/2 years at 1.2141.
(Reporting by Julie Gordon in Ottawa; additional reporting by Steve Scherer, Fergal Smith and Nichola Saminather, Editing by Hugh Lawson, Mark Heinrich and Nick Zieminski)
Ivey PMI shows activity expanding at a slower pace in April
TORONTO (Reuters) – Canadian economic activity expanded in April but the pace slowed from a 10-year high the previous month, Ivey Purchasing Managers Index (PMI) data showed on Friday.
The seasonally adjusted index fell to 60.6 from 72.9 in March. The March reading was the highest since March 2011 and the second highest since the PMI was launched in 2000.
Economic restrictions were tightened in some Canadian provinces in April to tackle a third wave of the coronavirus pandemic.
The Ivey PMI measures the month-to-month variation in economic activity as indicated by a panel of purchasing managers in the public and private sectors from across Canada. A reading above 50 indicates an increase in activity.
The gauge of employment fell to an adjusted 58.0 from 62.7 in March, while the supplier deliveries index was at 37.8, down from 39.6, indicating companies are having greater difficulty meeting increased demand.
The unadjusted PMI fell to 59.9 from 67.3.
(Reporting by Fergal Smith; Editing by Chizu Nomiyama)
Canadian dollar rises for sixth straight week despite jobs decline
By Fergal Smith
TORONTO (Reuters) – The Canadian dollar was little changed against the greenback on Friday as jobs data for both Canada and the United States fell short of estimates, with the loonie holding near its strongest level in 3-1/2 years and extending a weekly win streak.
Canada lost 207,100 jobs in April as fresh restrictions to contain a variant-driven third wave of COVID-19 weighed on employers, Statistics Canada data showed. Analysts had forecast a decline of 175,000.
In the United States, data for the same month showed employers hiring far fewer workers than expected, likely frustrated by labor shortages.
“You have this unhealthy environment where growth goals are struggling to be met but unfortunately inflation is picking up everywhere,” said Avi Hooper, a senior portfolio manager at Invesco.
Supportive of the loonie, one cause of inflation has been a surge in the prices of some of the commodities that Canada produces.
Copper surged to a record peak on Friday, fueled by speculators and industrial buyers as Western economies recover from the pandemic, while oil settled 0.3% higher at $64.90 a barrel.
“A higher oil price from current levels, we think, will be the catalyst for the next leg of Canadian dollar strength,” Hooper said.
The loonie was nearly unchanged at 1.2145 to the greenback, or 82.34 U.S. cents, having touched its strongest intraday level since September 2017 at 1.2125. For the week, it was up 1.2%, its sixth straight weekly advance.
The currency has been on a tear since the Bank of Canada last month signaled it could begin hiking interest rates in late 2022 and cut the pace of its bond purchases.
Canadian government bond yields fell across the curve. The 5-year touched its lowest since March 5 at 0.841% before bouncing to 0.878%, down 3.8 basis points on the day.
(Reporting by Fergal Smith; editing by Jonathan Oatis)
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