Mining industry support firms congregate here – by Tony Davis (Arizona Daily Star – April 27, 2014)

A growing phalanx of companies in Tucson and Southern Arizona service the mining industry.

Amigos, a statewide industry support group, counts its Southern Arizona membership at about 250 to 300 businesses. They employ a total of 25,000 to 30,000 people, says Bob Humphrey, an Amigos board member. The business count has grown from about 150 in 2003, due mainly to the rise in global copper prices from about $1.30 per pound back then to a little over $3 today.

The companies include engineering firms, environmental consultants, industrial distributors, equipment manufacturers, metal fabricators, dealers of Caterpillar construction equipment, systems suppliers, temporary employee firms, construction service firms, structural concrete and steel suppliers, construction services firms, mine planning and evaluation firms and many more.

While individual companies cite many reasons for locating here, chief among them is the large copper mine presence in the region, including Freeport McMoRan Copper & Gold’s Sierrita Mine and Asarco’s Mission Mine south of Tucson; mines elsewhere in Arizona and in southern New Mexico; and a smelter in Hayden.

But that growth hasn’t always been smooth. Copper prices, which topped $4 a pound in 2011, have slid slowly since then due to the still-uneasy U.S. economy and instability in the Chinese market, which buys about 40 percent of the world’s supply. The price was in the very low $3 range in mid-April.

Here are the stories of four local support businesses:

For the past 10 years, business has been stable or increasing for Humphrey, owner of J.R. Kennedy and Co. in Tucson, at 3540 E. Golf Links Road, which sells drill bits and other equipment for the mining industry. Having owned the business since 1979, he has kept his workforce down recently, at four employees compared with six to 10 through most of the last decade, but that’s because Humphrey, at 70, is edging toward retirement and gradually easing back on his workload.

FLSmidth Krebs, which makes slurry pumps and cyclone-shaped devices that separate large from small solid materials in mineral ore, is riding a wave of growth at its northwest-side plant, at 5505 W. Gillette Road, near the Cortaro Road-Interstate 10 interchange. Headquartered in Copenhagen, the company has doubled its Tucson workforce to 300 since 2008 despite the intervening economic bust.

The Tucson subsidiary can’t disclose its exact revenue, which Pat Turner, the subsidiary’s president, says is above $100 million annually.

“Our business has more than tripled in revenue since 2003, although the last couple of years our business has softened,” Turner said. “We’re still doing OK. We’re making a profit.”

What’s different now from previous up-and-down cycles in the copper industry is that China is such a huge player, he added.

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