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Boomerang Bust

More than 700 of the belly buttons in San Manuel are the handiwork of Dr. Robert Brower.

The 71-year-old staff physician has worked at the San Pedro River valley town's small hospital since 1961. It was called the Magma Copper Company Hospital until 1987, when TMC HealthCare bought it and rechristened it the San Manuel Healthcare Center.

Then Magma sold its copper mine to an Australian company in 1996, and that company has now shut the mine down, throwing 2,200 people out of work immediately -- and jeopardizing the future of the hospital where Robert Brower has worked for 38 years.

If the hospital does shut down, it would seem like an ideal opportunity for Brower to finally retire. He says the best thing about getting old is he gets to ski and fish for free. Retirement would give him time to do both.

He wants no part of it.

"I'm the last of the Mohicans," he says. "I could retire if I wanted to, but I like seeing patients. When I first got here, I asked the chief surgeon at the time how long the mine will be there. He said, 'Longer than you'll be alive.' I guess he was wrong."

Even if the mine were to reopen, Brower still might outlive it. He's Jack Palance with a stethoscope and smock. Before coming to San Manuel, Brower did his internship with the Army in Korea. He slept with a .45 strapped to his side.

But when he talks about what is happening to his town, it wears on him. He almost looks his age.

"It's been depressing to everyone in the community," says Brower. "These are my people. Miners are the backbone of America. They're good people. I've always enjoyed being with them. I grew up with them. My sons went to school with their sons and daughters.

"This will never be a ghost town. San Manuel is here to stay."


The small, unincorporated mining town of San Manuel used to be known for producing copper. No more. Faced with an extended global depression in copper prices, Australia's Broken Hill Proprietary Limited shut its mine in San Manuel on June 24.

The only thing coming out of San Manuel since then has been a bumper crop of rumors:

BHP will reopen the mine when the price of copper goes back up.

Phelps Dodge Corporation will buy BHP's San Manuel properties, consisting of the mine, smelter, refinery and rod plant.

PD already owns the mine and is keeping the purchase quiet. Once the miners and their families get hungry and desperate, PD will swoop in and play savior. For reduced wages, of course.

The union will buy the mine and run it.

There's bitter dissension in the union. When PD comes in, a broken union will buckle under the demands of the new owners.

The hospital will shut down. The nearest health-care facility will be almost an hour away in Tucson.

Riot police are mobilizing.

Everyone will board up the windows and abandon San Manuel.

All complete speculation. The people who know what will happen to the copper operation aren't talking. So the laid-off workers and the residents of San Manuel feast on rumor. They stand by for a decision that affects the fate of their town.

They take some solace in the knowledge that in July -- even after the layoffs -- BHP finished a $54 million upgrade of the San Manuel smelter. The flash furnace was rebuilt. Conveyor belts were improved. New and better air pollution control systems were installed. The smelter is the jewel of San Manuel's copper facilities. It's too nice to sit idle.

Unless BHP's asking price is exorbitant, it will be bought.

Only this much is certain: Friday, August 27, is D-Day. That's when BHP's 60-day severance package runs out. Workers who kept their families fed by toiling in the mine will humbly wait for unemployment checks from the government. Embarrassed faces will exchange food stamps for groceries at the check-out line.

The loud gulping coming from the northeast slope of the Santa Catalina Mountains is the sound of a town swallowing its pride.


The headquarters of the United Steelworkers of America, Local 937, is located a few miles from San Manuel in the town of Oracle.

At the union office, Richard Muñoz is on a rant. He'd worked at the San Manuel mine for almost 29 years before the layoff. He was three years from collecting his pension.

Manuel Medina, chair of the Mine Grievance Committee, patiently listens to Muñoz. Medina knows that Muñoz's anger isn't directed at him.  

"I want to find some answers and I can't fucking get any," says Muñoz. "I'm 49 years old. Where in the hell am I going to get a job that's going to support my family? I've still got one more little girl to put through school. Not only my family, but what about my neighbors? And there's nothing I can do to help. My hands are fucking tied."

Muñoz feels no sympathy for BHP. He echoes the beliefs of many of the other miners: BHP's ineptitude and unwillingness to work with the miners caused the problems.

"If I were going to buy a billion-dollar company, I'd have all the facts, and they didn't fucking do that," says Muñoz. "If they would've cut down the work force, it would've worked. The company didn't know how to manage copper production or how to work with the people. If they would've come down and asked the people, all that shit would've changed. They're from another land. We don't have kangaroos here."

San Manuel residents say that when Magma owned the mine, management would meet with the workers when copper prices dropped. The company and the union would agree to reduced hours or wages to keep the operation in business. Sometimes there would be moderate layoffs. But the majority of the miners were still working.

BHP never proposed any of those scenarios to the union.

"I can't speak for management in Australia and say that they had not considered it," says BHP spokesman Bill Norman. "But my feeling would be that they felt they were losing so much money, and had been losing so much money so rapidly, that they had to cut it down to bare minimum."

As a result, Medina says he's become "a social worker. I'm making sure these guys are looking for other jobs or getting retrained. Some of them aren't doing that. They think the mine will reopen soon and they'll go back to work. That's a mistake. They need to take care of themselves now, because we don't know how long this is going to last."

Medina denies rumors of dissension.

"There is no problem with the union," he says. "We don't want companies believing that, because then they'll come in here and try to push us around."


San Manuel was built by the Del Webb Corporation in 1953. The mine was owned by Magma Copper Company at that time, and the employees needed a place to live. People who have lived there since then boast about how much the town has grown. A big-city visitor would find it difficult to point out the changes.

There are no stoplights. No movie theater. The smelter's smoke stacks dwarf the buildings. There is a Subway and a Pizza Hut. That's progress.

About 5,000 residents have always thrived in this small-town environment. Half of the population is made up of seniors. They're either retired miners or transplants attracted to the quiet life.

The view of the mountains isn't blanketed by smog. The streets are clean and safe. People don't wait around for tee times at the golf course or empty their wallets to play 18 holes.

But the real reason the town exists is because of copper.

BHP spokesman Bill Norman says the San Manuel mine has produced more copper in its lifetime than any other. In May, the mine produced its 700 millionth ton of copper; 50,000 tons of ore were being taken from the ground every day. Each ton of ore is turned into 12 pounds of copper.

The San Manuel operation was unique because it was the only place where copper went from the ground to a finished product in one location. The mine, smelter, refinery and rod plant required a sizable labor force.

Workers brought their families with them. This meant a hospital, a school system and local businesses. San Manuel became a self-sustained town. All because of copper.

When Magma put its operation up for sale in 1996, BHP snatched it up. The Australian group was already a multibillion-dollar company with mines all over the world. Besides copper, BHP mines everything from platinum to diamonds.

Some have said BHP overspent when it shoveled $2.4 billion to Magma for its copper properties. At the time of the purchase, copper was trading at $1.20 a pound. BHP was eager to expand its mining empire into the North American market.

When BHP closed shop in San Manuel, copper was trading at only 63 cents per pound.

"At the time of the purchase, it certainly had to look like an excellent deal," says Norman. "Shortly after BHP bought Magma, the economies in Thailand, China and Brazil failed. There was an oversupply of copper and not enough demand."  

BHP announced that it lost 2.3 billion Australian dollars in the year that ended May 31. Financial woes for the Australian company began a domino effect that is rocking a small town in Arizona.

"We've had mine closures [in Arizona] off and on for decades, so I don't know if there's anything especially different with this one," says Tom Rex, research manager at the Center for Business Research at Arizona State University. "At some point, worldwide conditions will change and they'll probably reopen the mine. How long that takes, I don't have any idea."

Rex says the mine closure will help balance supply and demand on the world market.

"You would think that [BHP] probably took this kind of thing into consideration," says Rex. "Cycles in the mining industry have gone on for as long as the industry's probably existed. So you know you're going to have periods like this over the years."

Unfortunately for San Manuel, decisions about its future are being made on the other side of the world.

"BHP does not speculate on any potential transaction," says Norman. "I can tell you with certainty that PD did not buy the plant a year ago."

Phelps Dodge recently offered $2.66 billion in stock to acquire both Asarco Inc. and Cyprus Amax Minerals Co. The deal would make PD among the world's largest copper producers.

When it comes to buying BHP, Phelps Dodge refused to confirm any of the speculation coming from San Manuel.

"The company just can't talk about rumors in any way, shape or form," says Tom Foster, PD's vice president and treasurer.

Mining analysts have heard the rumors about who will eventually control the mine. Bruce Rubin, editor of the Bisbee-based Paydirt magazine, and securities analyst John Tumazos agree with the miners on one point: BHP overpaid when it bought Magma's properties for $2.4 billion.

"It was a big mistake," says Rubin. "Everyone told them they were paying too much, and they didn't listen. Now they're paying for it."

"It was horrendous," says Tumazos, who works for the New York City-based Sanford Bernstein. "They paid five times what they should have paid."

If the mine is sold, Tumazos believes the workers will have to accept a cut in wages for the operation to remain competitive.

"In order for it to be marginal and acceptable today, the workers would probably need to take at least a 25 percent compensation reduction combined with reductions in the head count . . . and make it more cost-effective," he says. "I suspect that if it survives, the payroll will be half as much."

Tumazos says mines in places like Chile and Indonesia have an advantage over their North American counterparts. The ore grade is higher, the mines and equipment are newer and the labor is cheaper. Those factors could lead to difficult negotiations between management and labor if the Australian company decides to reopen its San Manuel facilities.

"The workers have to take a much worse deal than they ever took before with someone who doesn't have a lot of patience right now, who's got a lot of other problems on their mind on every continent in the world. . . ." he says. "It's a different cast of guys right now and they're frankly not patient and reasonable and focused on this. And they don't have to be. They've got bigger problems."


For politicians like Arizona state Senator Pete Rios, whose district includes San Manuel, the problems don't get much bigger than massive job losses.

He says that job fairs already have been staged in San Manuel. An emergency food supply has been stockpiled in case families go hungry. And because BHP is a foreign company that employs American labor, more federal funds are available to retrain workers and allow them to collect additional unemployment benefits for 53 weeks.

"The governor has indicated that they're setting aside $1.2 million as emergency relief for those families who will soon be running out of their two-month severance pay," says Rios. "But what I'm finding out from some families is they go and apply, and because during the good times, when they were working, they were able to acquire two vehicles... one vehicle is counted against their assets."

Rios says assets like an extra car or a fishing boat could disqualify them from getting food stamps. In order to receive the aid, families would need to sell off those extra assets.

"Even though the governor has set aside some additional resources, I think a lot of those families are going to find it difficult to qualify because of state and federal regulations regarding eligibility for food stamps," he says.  

Rios agrees that the current problems in San Manuel stem from foreign competition. BHP may be part of that problem.

"The plant closed because they couldn't compete with foreign copper producers," says Rios. "The irony of the whole thing is, most of the foreign copper producers are the same darn companies that operate here in the United States. Asarco has plants in South America. BHP has plants in South America. So they're competing against themselves."

BHP's global mining operations can produce copper cheaper at other locations. Residents whom Rios spoke with when Magma sold to BHP told him they feared a foreign company might sacrifice the well-being of the town for profits.

"Because BHP is out of Australia, they didn't think they would have much loyalty to a company here in Arizona," says Rios. "There was some of that apprehension. Obviously, it came true to those who were concerned about it. Many people, including myself, still believe that that smelter will be put back into operation at some point in time."


One company has already taken advantage of the large labor force that unexpectedly erupted from the mine. Western Truck School opened up an office in San Manuel's lone strip mall. More than 80 former miners have enrolled in classes that will deliver them a trucking license. The government covers the $3,000 training fee.

Ron Stenge, Western's director of operations, heard about the hard times in San Manuel and thought the trucking school would help. He thinks other companies would benefit if they came to town.

"These people work hard and are willing to get back to work," says Stenge. "When these guys get their license, they'll always have a job. Even if they go back to the mine, they'll have trucking to fall back on in case something like this happens again."

In a lot next to San Manuel High School, three former miners take turns parallel parking an 18-wheeler between orange cones. Each is quick to give thanks to Western Truck School for coming to San Manuel. Their disgust for BHP hasn't been tempered by the prospects of a new employer.

"We're just a pimple on BHP's ass, and we got squeezed," says Mike Velesco, an eight-year veteran of the mine. "It's chicken shit what they did. There's been a lot of stress and panic."

Kevin Rash -- "just like the disease," he explains -- saw a major difference between how the previous and current owners of the mine treated the workers.

"Magma was a family business," says Rash. "They took care of your family and the community. BHP said, 'To hell with it.' The people commuting from Tucson didn't even know about the shutdown until they showed up for work that day."

Shawn Schmitz knows that even if another company buys the operation, his 20 years of service will be wiped clean.

"That's what really sucks," says Schmitz. "That job kept my family fed for 20 years. Then they treated us like a red-headed stepson."

It was 47-year San Manuel resident Bill Haro who drove to Ron Stenge's Phoenix office and told him about the labor pool in San Manuel.

Haro once worked for the mine, but since last November has been his own boss. He travels the country and does audio-visual lighting for corporate meetings. He has no financial stake in Western Truck School.

"I did it for my community," says Haro. "This situation is devastation. Just complete devastation."

One laid-off miner comes to Haro's house to be interviewed. During the interview, he gets a phone call from his wife.

"She told me I shouldn't use my real name," the miner says after he hangs up. "She's afraid that if I say something bad about BHP or PD, they won't hire me back."

Haro is livid.

"You take a guy like this who works hard for the company to make it work, and at the end of the day he gets fucked," says Haro. "They need to get their heads out of their asses and give a rat's ass about what's going on here. You know the stockholders in New York don't care what's going on here."


Janice Rapp moved to San Manuel 28 years ago from New York City with her husband, who was in data processing. They needed to escape the chaos of the city.

"People were dropping dead in his office," says Rapp, 75.

Now she is dealing with another kind of job stress.

Because San Manuel is an unincorporated town, there's no mayor to deal with the current crisis. That burden has fallen to Rapp, the only elected member of the Chamber of Commerce. The chamber also serves nearby Mammoth and Oracle, creating a tri-community with San Manuel.  

The tri-community Chamber of Commerce visitor's guide explains how Rapp can be reached:

"For both convenience and economic reason the Chamber office is in the home of its director in San Manuel. Don't let that stop you from calling or making an appointment to meet her. The only door that is closed is the one to keep the dogs in."

Like everyone in San Manuel, Rapp has closely followed the effects of the mine shutting down. She sympathizes with the miners because her son is one of them. He lives in Tucson and made the commute to San Manuel.

"Everyone is in a state of limbo and shock," she says. "We haven't felt the full effect of it yet. When the severance runs out, then the reality will hit. Right now everything is extremely quiet."

Rapp believes the miners will be back to work at some point. Until then, she's trying to keep San Manuel on the map.

"I'd like to see some small industries come in here," she says. "We've got to get our main road connected to I-10. All towns that are really growing are next to a major highway. What would really be great is a hotel or motel in the area. Then people could fly in and have a nice weekend."

She's heard all the rumors and dismisses them with disgust. Rapp says San Manuel won't become deserted, because a $50,000 house in San Manuel costs twice as much in Tucson.

"Until the t's are crossed and the i's are dotted, I don't believe anything," she says. "This is a state-of-the-art smelter and refinery. Somebody is going to want to buy it. Even if that doesn't happen for a while, as long as the health center stays open, the people will stay. If it does close down, then we'll have another problem to deal with."

That problem may soon become a reality. BHP had an agreement with TMC HealthCare, which owns Tucson Medical Center, to keep the urgent care center open 24 hours in case of an emergency. The 24-hour care needed to be subsidized because it lost money every year. BHP provided the necessary funds because having a hospital nearby lowered its insurance premiums.

As of September 1, the urgent care center will become a clinic. Half of the staff will be looking for work. Unless the mine is bought or another company takes over TMC, the clinic will close December 31.

"I signed a petition that was sent to the governor's office to keep the hospital open," says laid-off miner Kevin Rash. "I have a 3-year-old boy. If he gets sick at 11 at night, what am I going to do?"

Glen Halverson, administrator of the San Manuel Healthcare Center, says the facility has seen a 30 percent loss in business since BHP shut down. Much of that came from occupational medicine associated with the mine like physicals and industrial injuries.

Halverson knows the dangers of working in a mine. Lacerations, crushed appendages and back injuries go with the territory. Occasionally, there would be a cave-in, and someone would have to be flown out on the center's helicopter. Every year, one or two people would die working at the mine.

"I've toured the mine, and it's an eye-opener," says Halverson. "Small wonder there are injuries there. Things are going to happen."

Halverson's optimistic someone will buy the San Manuel clinic. If nobody does, a bad situation could get worse.

"There's a lot of seniors in the area," he says. "A lot of miners and their families live here. Access to health care is critical. They can't drive an hour for care. I don't think this will become a ghost town, but it might look like a town that's dying."

He hopes that the current crisis could eventually make San Manuel stronger and less reliant on one industry.

"This is a small-town, close-knit community that unfortunately became too dependent on copper companies, unlike other communities that are more diversified," he says. "You have a community that's not prepared to deal with the closure. My personal feeling is what's happened to the miners and TMC have people saying, 'We have to look out for ourselves and stop being the victim.' I'm hoping the leadership in town will become more proactive and less reactive."

Halverson has worked in both rural and urban settings. He thinks rural residents appreciate health care and don't take it for granted. Members of his staff have husbands who were laid off by BHP. The pinch has extended to the hospital.  

"I told the employees here that with the cutbacks, it's an end of an era," he says. "It's sad, but it's an economic reality."


Inside the entrance to San Manuel High School, two walls are covered with fliers. They're not sign-ups for the track team or the glee club, like you might find at other high schools. After BHP closed the mine, the walls became job boards for the unemployed miners.

Mechanic. Newspaper delivery. Construction. Corrections officer. Custodian. Plumber. Almost all of the jobs are outside San Manuel. None of them pays as well as the mine did.

A sign is posted next to the auditorium. The next evening there will be a financial counseling seminar for BHP employees.

Dr. Claude Sanders sits at his desk in the main office of the high school. He's the superintendent of the Mammoth-San Manuel Unified School District No. 8. Until June, the school district was the second largest employer in the area. Now it's the largest.

Under his command are Mammoth Elementary (K-6), 1st Ave Elementary (K-3), Ave B Elementary (4-6), Gardner Middle, and San Manuel High School.

Sanders is more worried about the 2000-2001 school year than the one about to begin. The budget is based on the previous year's enrollment. This year's in the bank. He doesn't know what will happen next year.

"I'm sure there will be some drop-off in attendance, but there's no way of forecasting," says Sanders. ". . . We'll just have to adjust for the future."

Unlike BHP's out-of-work employees, the school system has a year to make plans. Depending on what happens with the mine, one of the schools may have to be shut down in the future to consolidate resources.

Sanders estimates that BHP employed the parents of one-third to one-half of the district's students.

To ease the financial burden, the school system has cut fees in half and expanded community programs. It's also given space to BHP to conduct job placement counseling and teach résumé writing.

Back when Magma owned the copper operation, graduates of San Manuel High could count on a mining job if they wanted one. That changed with the new ownership.

"Last year, 70 percent of our graduates went on to higher institutions," says Sanders. "There just haven't been the jobs at the mine since BHP took over. Downsizing, BHP's been doing that for three years."

Sanders has lived in San Manuel for eight years. He's heard the rumors and believes the copper operation is too valuable to fade into the desert. But Sanders is concerned about what might happen if the closure stretches into next year.

"Our approach is positive, to do the best we can for the students," he says. "When 3,000 people lose their jobs, it's a big deal. We're aware that this could cause family stress situations like domestic violence. The crime rate is really low right now. But we could see an increase in crime and violence."

If the crime rate does escalate in San Manuel, Sergeant Neal Mullard and about 20 other local officers will be responsible for stopping it. Assistance from the Sheriff's Department of Pinal County will need to be brought in if the riot rumor turns out to be true.

Mullard is certain that one is false.

"The media has called to confirm if riot troops are standing by," he says. "I said, 'No.' We initially anticipated violence toward BHP. But there would be no reason for hostilities. There's still a chance someone could come in and buy the mine. Burning the railroad ties isn't the way to impress a new corporation."

San Manuel is small, but not immune to crime. Mullard says that the local police face residential burglaries, thefts, drug trafficking for casual users and illegal aliens. A curfew keeps kids under 17 from causing trouble late at night.

"Domestic violence hasn't increased yet," says Mullard. "Because of stress, it may go up. I think an increase in crime will be because of a result of opportunity. People who move out are going to use their residence as a storage facility."

Mullard doesn't anticipate any of the laid-off workers suddenly favoring a life of crime. The people who were criminals before will just take advantage of the situation.

"Someone who is going to steal a lawn mower would have done it anyway," he says. "I would say that well into 99 percent of the population pays their bills, is hardworking and takes care of their families."


Three kids drop their BMX bikes outside of Chris' True Value Hardware. They don't bother to chain up their rides when they go inside.  

Chris' True Value is next to Gordon's grocery store in the strip of shops. The True Value sells everything the food store doesn't. Garden hoses, fish food and dust brooms are some of the items on the shelves.

The store's namesake, Chris Valdes, owns all the buildings on the strip along with business partner Vern Stover Sr. Chris' son Todd manages the True Value. The younger Valdes has lived in San Manuel for all of his 28 years. He's been visiting other small towns that went through similar circumstances. Valdes wanted to gauge how the shutdown might have an impact on the local economy.

"Well, they did make it, and their town is still there," says Valdes. "It already has affected business here. Sales have dropped because people are saving their money."

Valdes says staples like toothpaste and toilet paper are still being bought. It's the extras collecting dust on the shelves. Before BHP closed the mine, Valdes had considered expanding the True Value. Those plans will wait until a decision is made on the mine.

"If sales continue to drop, we'll have to see what happens," says Valdes. "It affects us, but it's not like we're putting the whole family in the store and laying off the staff."

Most of Valdes' graduating class went on to work at the mine. He attended the University of Arizona and got his degree in engineering. Sketchy periods are the norm in the copper industry. Valdes says the current troubles are the worst he's seen.

"When Magma was here, all the people making decisions lived here," he says. "BHP is a foreign company. They had efficiency issues and people didn't like the changes. There've been union strikes before, but you knew there would eventually be a resolution. It was more of a pissing contest. This is not a sure thing."

Besides owning the storefronts with the elder Valdes, Stover Sr. also owns the Fast Stop and Tastee-Freez convenience stores. He moved to San Manuel in 1956 and graduated from the high school in 1959. He met his wife at the school. His kids went there, and his grandchildren will, too.

He's already had to cut back hours at one of the stores. Stover Sr. can only guess what a long-term closure will do to business and the town.

"It would be a big blow to the community if the copper company stayed closed," he says. "We'll lose a lot of our younger families and, of course, the school system and retail businesses will be affected. I think eventually copper prices will go up and they'll open back up the smelter."

Stover Sr. was as shocked as the miners when BHP made its announcement. He'd heard the rumors of the mine possibly being closed, but not the entire operation. Waiting around for the problem to fix itself wasn't an option.

"We've been meeting with state and county representatives to see what industries we could bring to San Manuel," he says. "Anyone we can get."


Almost 3,000 employees plan for the last of their severance checks. Everyone in the tri-community waits to hear what BHP has planned for them.

Approximately 300 workers are still employed by BHP, but they're bringing the operation closer to care and maintenance status. The closer they get, the more will be laid off. The target number of permanent employees is 130.

"The severance package put together by BHP has been extraordinary," says BHP's Norman. "They get 60 days administrative leave. They're still employees, but they don't have to come in to work. They draw pay and full benefits and can draw unemployment during that period. This has hurt management as much as the employees. It's not a case of management wiping their hands and saying, 'That's the end.'"

If that happened, at least San Manuel would know it was the end and deal with it. Instead, the rumor mill continues to churn.

Contact Matthew Doig at his online address: mdoig@newtimes.com


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