Phoenix-Based Copper Mining Firm Reports Strong Earnings, Gives Workers Bonuses
Phelps Dodge Corp. is making copper as fast as it can to take advantage of sky-high prices for the metal. And it's sharing the bounty. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
On Thursday, Phelps Dodge sent letters to its 5,000 <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Arizona employees with some good news. Each employee with at least one year of service will receive a "prosperity" bonus of $2,800. That's more than a month's pay for an hourly worker earning $15 an hour.
Strong metal prices helped the Phoenix-based company report net income for the first nine months of this year of $1.4 billion, roughly double the income in the same 2004 period.
Hours after PD released a spectacular earnings report Thursday, Asarco LLC, its beleaguered, bankrupt rival, announced the resignation of CEO Daniel Tellechea.
The contrast was stark. Asarco workers are nearing the four-month mark in a strike that began with the company demanding a pay freeze and benefit cuts in a period of strong copper prices.
Production is feeble at Asarco while other global producers reap huge profits from strong prices.
While Asarco fumbles, PD is having some difficulty filling all its available jobs. So the company is trying a new tack to fill 100 job openings at its Sierrita mine near Green Valley.
The old generational links to mining faded away as some operations closed and others shrank. Young family members sought other lines of work in other places.
Now PD is running radio ads and has a mobile billboard in Tucson to draw people to a job fair Saturday touting nearby mining jobs.
Ads on the airwaves and urban job fairs are somewhat unusual for mining companies.
With copper prices still high at nearly $2 a pound, PD is eager to fill available positions and keep production flowing.
Employment at Sierrita has grown 50 percent in the last two years, from 500 workers to 750.
But 100 more workers are needed in nearly every category at Sierrita, including truck drivers, mechanics, electricians, technicians, laborers, engineers and clerical people, said spokesman Ken Vaughn in Phoenix.
The starting wage for truck drivers is $14 to $15 an hour, Vaughn said. Pay for experienced electricians and mechanics could range from $16 to $22 an hour, and salaries for beginning metallurgical engineers would be more than $50,000, he said.
Health and other benefits also are competitive, he added.
The Saturday job fair runs from 9 a.m. to 5 p.m. at the Marriott University Park, 880 E.Second St.
This event will focus on Sierrita, and about three dozen employees from that operation will be on hand to talk about the jobs.
In the next few years, PD will have to fill a few hundred new jobs at its Morenci and Safford operations northeast of Tucson.
Phelps Dodge wants to expose younger people in the work force to mining jobs.
The company is also promoting education for the next generation of miners. PD donated $2.5 million to set up an endowed professorship in the University of Arizona's mining and geological engineering department. The school expects to fill the faculty position by next fall.
Mining is a much more technical business today, with satellite links and computers common in many operations.
The company isn't counting on $2-per-pound copper lasting forever. The economic analysis for new projects would assume copper prices below $1 for extended periods in the future.
Just a few years ago, copper prices were below 80 cents a pound and companies struggled to survive. Now strong global demand and supply constraints have combined to drive commodity prices higher.
Long-range prospects for the domestic copper industry will depend on skilled workers using technology to compete in a global business. Finding good employees is a step in assuring tomorrow's success.
There are really just two big players in Arizona copper today.
One is finding success and sharing it with its work force. The other seems to be sliding to oblivion, unable to assure even the job success of its top executive.