The state Department of Mines and Mineral Resources, which helps companies looking to dig for minerals in Arizona, will close Friday because it’s out of money, the director said Wednesday.

Gov. Jan Brewer has proposed moving its duties to the state Geological Survey when the new fiscal year begins in July, but the department with three employees and three contract workers doesn’t have the money to last that long after recent budget cuts, Director Madan Singh said.

“We would have needed supplemental funds to complete this fiscal year, and they’ve decided this is the time to close us down,” he said.

The department was created in 1939 to promote mining in Arizona, and last year, it provided 410 customers with information about mines and minerals in the state, according to the governor’s executive budget summary.

Turning its duties over to the Geological Survey will save the state $220,000 a year, according to the report. But the governor also proposes transferring $100,000 to the Geological Survey to digitize the department’s mineral records.

Downsizing of the Department of Mines and Mineral Resources began last summer when the Legislature transferred the Arizona Mining and Mineral Museum from the department to the state Historical Society.

The museum is scheduled to close this summer and reopen as the Centennial Museum, although not in time for the actual state centennial celebration in February 2012.

The people who will lose their jobs when the department closes include Singh, a mining engineer who conducts economic analyses of the industry, and a clerk who helps with data inquiries. The department also has three contract workers, including one who visits schools to talk about the economic benefits of mining in Arizona.

The contract workers could be transferred to the Geological Survey, which might also have money to hire part of the staff, but “the situation is very fluid,” Singh said.

The department’s main duty is to help companies interested in mining in Arizona.

“The people that normally come to us are the smaller companies that don’t have a lot of information in their own files,” Singh said. “We tell them where some past deposits have been explored and help them dealing with various agencies like (the Department of Environmental Quality) and Water Resources.”

Singh said he is disappointed to leave his job of more than five years. “I think we were doing the state and the mining industry a service, especially the new (companies) coming in that would in the long run help the state,” he said. “They create jobs and produce minerals, which we need.”

The Governor’s Office did not respond to a request for comments Wednesday.

Some geology enthusiasts said the job cuts could hurt the industry. “The new mining people that come in won’t know how to access the (mining and mineral) records,” said Mardy Zimmerman, a retired teacher who is on the board of the Friends of the Arizona Mining and Mineral Museum, a non-profit.

“The records will be in storage when our economy could really use the new mining jobs,” she said. “We have the richest copper deposits, and we are hindering the development and furthering of mining in our state.”

She also said the job cuts don’t bode well for the museum and its plans to close and reopen as the Centennial Museum.

Zimmerman helped develop a program to teach children about minerals at the museum, and she said that losing the Department of Mines and Mineral Resource employees and moving the museum to the Historical Society could take away the scientific focus at the museum.