The Florence Town Council voted 7-0 on Monday to take 1,187 acres of private land by eminent domain from Curis Resources which would stop them from developing an in situ copper recovery project on the lands, according to a story in the Phoenix Business Journal. Real estate developers have been battling the copper project over claims it will endanger groundwater supplies. The Town has previously shut down the Curis offices over driveway access and office water service. They also banned use of sulfuric acid for mining but not other uses. [Right, land ownership around copper project. Credit, Curis Resources]Curis has a lease on 160 acres of state trust lands which they plan on developing first. They released a new economic feasibility study that concluded:
The base case economics of the project indicate pretax Net Present Value (NPV) of US$748 million with an Internal Rate of Return (IRR) of 38 percent
Life of project direct operating cost is estimated at US$0.79 per pound copper recovered. This is considered to be among the lowest cost copper producers globally.
Royalties paid to Arizona State Land Department over the life of the project will be approximately $162 million.
Operations are planned to occur on land owned by and leased by Curis from the Arizona State Land Department for a total of 13 years. The first nine years of copper production will occur exclusively on state land and is scheduled to begin in 2016. In year 10, production would expand on to private patented land owned by Curis.
Unbelievable... I hope Curis is awarded punitive damages!
ReplyDeleteYou make an important point. I've heard from others who are discussing this, saying that even if they condemn the lands they have to pay fair value for them. Would that be the value of the copper that can't be mined? Would Florence be on the hook for hundreds of millions of dollars?
ReplyDeleteAs you correctly stated, Net Present Value, based on a compliant feasibility study signed by independent qualified persons, and also including lost revenue per lb of copper recovered for life of mine are the obvious starting points for value. Then there's all the indirect direct costs... All of this is just going to line attorney's pockets of both sides.
ReplyDeleteThe scary part is that this is happening in the United States, and not a 3rd world or politically unstable country. Is this the new precedent? A project not fitting local political agenda so the local government just takes the land? This must be the case, since Curis is successfully moving forward with a legal permitting process, and only having issues with the politics and NGOs. I though Rosemont had it hard with Pima County's anti-business mindset, but this sets a new low for the United States and a warning for anyone considering investment. This really should be a lead story for national media outlets.
I wonder if this would be happening if the mine's opponents didn't include real estate investors. They have serious clout in this state.
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