Resolution Copper's announcement yesterday that they are cutting funding in 2013 by 75% for development of their proposed deep underground copper mine near Superior, is not that surprising. The company attributed it to "uncertainty in legislative and regulatory environment" which refers mostly to stalled federal legislation to make the land transfers the company needs to start mining. The company had repeatedly stated they needed a decision by year-end to justify them continuing to invest so much money in the operation. The $200 million project is being cut back to $50 million in 2013.
The news release says "The company will suspend all shaft development and drilling activities after current work assignments are completed in the first quarter of 2013. Resolution Copper intends to continue its current level of work activity through the end of 2012, with most of the ramp-‐down starting in 2013 when rehabilitation and shaft-‐sinking work is suspended on the #9 shaft and progressing through the end of the first quarter when sinking of the #10 shaft [right, photo credit Nyal Niemuth] is expected to be completed. Resolution Copper will reduce its workforce by approximately 175 workers by the close of 2012 as work is suspended on the #9 shaft and the balance of the reductions will occur at the end of the first quarter of 2013 when the #10 shaft is expected to be completed and all drilling activity suspended. The reductions largely affect the project’s contractor workforce."
Resolution is a joint venture between Rio Tinto and BHP-Billiton, the world's biggest mining companies. Both companies are cutting back operations worldwide.
The day before, a story on Mineweb said Rio "is aiming to cut more than $5 billion of operating and support costs by the end of 2014, and would cut spending on exploration and evaluation projects by $1 billion over the rest of 2012 and 2013."
BHP sold its Canadian diamond operations to Harry Winston Corp. two weeks ago. It has cancelled or cutback major investments in coal and iron recently. BHP recently failed to complete the sale of Pinto Valley copper mine in Arizona.