Hart: Say yes to mining, as long as it's safe

Joe Hart

Joe Hart

KINGMAN - Joe Hart didn't want executives at Mineral Park mine to think he was taking them to task as Arizona's mine inspector.

It's just that most of the trucks at the bankrupt open-pit copper mine in Chloride were "junk" and fraught with safety issues, Hart said Monday at the Conservative Republican Club of Kingman's monthly meeting.

"They thought we were trying to shut them down, and I said, 'If there's any mine I want to save, it's Mineral Park,'" the chief of mining safety told an audience of about 30. "But they've got to do it safely. They wanted to run on a shirt-tail operation."

Hart, who worked at the mine for 27 years, said he was the first in his family to buy a new car before age 50. His four daughters went to college and none of them has a student loan, all because of the mine, he said.

Mineral Park, owned by Vancouver, B.C.-based Mercator Minerals, filed for Chapter 11 bankruptcy reorganization in August and announced a "curtailment of operations" in late December that resulted in 383 workers being laid off.

A U.S. Bankruptcy Court judge in Delaware on Jan. 20 approved the sale of Mineral Park's assets, including Bluefish Energy Corp.'s electricity generator, to Origin Mining Corp. for $10 million, or $5 million less than what the mine owes Mohave County in delinquent property taxes. The sale also includes assumption of certain liabilities, including environmental reclamation obligations, which total about $3.5 million.

Hart said he'd never heard of Origin Mining, nor had he heard of CTGX Mining, a competing company that filed a motion in the bankruptcy case for an extension of restructuring.

Dan Worthington, chairman and chief executive officer of CTGX, said the court didn't allow enough time for objections to the sale. The court set Jan. 16 as a reasonable opportunity for any interested party to make the highest and best offer for the assets.

"Despite our efforts to make a better offer, and despite the objections of the many parties, the court finalized the sale of the Mercator mine to the original party on or about Jan. 29," Worthington told the Daily Miner via e-mail. "CTGX tried to insert itself into the discussions with a better offer, but I guess we were too late. We were planning to operate the Mercator mine and the contiguous mining property."

Mining engineer George Riddle had a feasible mining plan to present to the court that would have created a win-win for CTGX and Mohave County, Worthington said.

"Despite objections from the creditors, the mining district, the county and the state, the court went through with its decision," he said. "What a shame for the community. Not much that can be done now."

Mohave County Assessor Ron Nicholson said Mineral Park stopped paying property taxes four or five years ago and owes about $15 million with penalties and fines. It's a choice every taxpayer makes, and it's up to the county to collect, he said.

Mineral Park requested a tax abatement of 20 percent to 30 percent of the total amount owed, based on devaluation of the mine. The mine fell from more than $600 million in value down to about $300 million and now has a buyer for $10 million, Nicholson noted. Taxes are considered "priority liens," which means they get paid first.

"I think there's reason to be hopeful, but with so many uncertainties, nobody knows," Nicholson said.

Mohave County Supervisor Gary Watson said Mineral Park currently owes the county $3.8 million in back property taxes, more than $7 million to various school districts and about $1.5 million to Mohave Community College.

There was a "great deal of confusion" over revenue from Mineral Park mine, he added. The Arizona Department of Revenue showed the mine with an $80 million profit in 2013, which allowed Mineral Park to negotiate a new loan.

Hart said Mineral Park is at the base of many budgets, and it has to be turned around.

Arizona produces more than half of the world's copper, and over the next 10 years, the state will have to mine more precious metals than it has for the past 150 years, he said.

"It'll come back, hopefully sooner than later," the mining superintendent said. "We've got to get the bureaucrats off our backs. The EPA is one of our biggest problems and something we need to work on."