State Land Department intends to auction 160-acre parcel that could generate a $300 million windfall for Hudbay

In a direct rebuff to Pima County, the State Land Department plans to auction a 160-acre parcel at the request of Toronto-based Hudbay Minerals, which would use the land to dump mining waste from its Copper World mine.

State Land Commissioner Robyn Sahid informed county officials on Oct. 8 the land on the western base of the Santa Rita Mountains will be auctioned next year, rejecting the county’s opposition to selling the land. Sahid was appointed Commissioner by Democratic Governor Katie Hobbs in 2023.

Hudbay is the only likely buyer for the parcel the state has appraised at $993,000. The appraisal is based on the current value of the land as rural residential, not on what it would be worth in the future to Hudbay. The land must be sold by May 19, 2026 before the appraisal expires.

The 160 acres would allow Hudbay to process an additional 41 million tons of copper ore, worth more than $300 million, that it otherwise would have had to stockpile because of a lack of land to dump mine waste called tailings, according to a 2023 Hudbay technical report.

Pima County has opposed the Copper World mine, which was formerly known as the Rosemont Mine, for nearly 20 years. County Administrator Jan Lesher reiterated that opposition in a Sept. 11 letter to Commissioner Sahid and asked her not auction the 160-acre parcel.

“At this time, based on the decision by the State Land Department to move forward with the public auction, it is unlikely that Pima County’s contesting of the terms of the proposed sale would have an impact on the auction proceeding,”  Lesher stated in an Oct. 14 memo to the five members of the Pima County Board of Supervisors.

“Therefore, we will continue to advocate at the State Legislature and with the Governor to prevent this parcel from moving to auction,” Lesher added.

Pima County, Lesher stated, continues to have “concerns regarding the negative impacts of the mine on groundwater withdrawals in the area, the impacts to surrounding residential areas and the permanent destruction of natural and cultural resources.”

During the Oct. 8 meeting, Sahid told Deputy County Administrator Carmine DeBonis that selling the 160 acres to Hudbay would allow the company to move the tailings dump further south and away from homes in Corona de Tucson.

“Mr. Debonis explained that Hudbay has not formally committed that to the County, nor are they offering assurances to ASLD that in fact that will be the case if acquisition is successful,” Lesher states in her memo.

Hudbay has very strong incentive to use every acre of additional land it can acquire to store tailings. The more land for tailings, the more copper the company can process, the more revenue it can generate and the greater the profits for its shareholders.

Hudbay stated in a 2023 Pre-Feasibility Study that it was looking for additional land to dump tailings. Hudbay noted in the report that 41 million tons of copper ore “cannot be processed at the end of the mine life due to lack of deposition space for the tailings they would generate.”

“This material,” Hudbay stated, “remains an upside opportunity should Hudbay secure additional surface rights for tailings disposal.”

The upside appears to be substantial.

The 41 million tons of ore contain .16% percent copper, which is equal 131.2 million pounds of copper. Not all the copper can be extracted from the ore during processing. Mines typically convert 85% to 95% percent of the copper contained within the ore into copper concentrate that can be further refined into metal.

Even if Copper World only converted 70% of the copper contained within the ore into copper concentrate it would still produce 91.8 million pounds of copper concentrate that could then be sold to smelters. Copper World’s Pre-Feasibility Study uses an average sales price of $3.75/pound, which is well below the current $4.97/pound for refined copper.

Copper World’s average price of $3.75/pound for 91.8 million pounds of copper concentrate would generate $344,400,000 in revenue.

Not a bad return for a $993,000 purchase of 160 acres, courtesy of the Arizona State Land Department.