New West Columnist: Know Your Miner
An Old Industry Roars in Butte
While other economies begin their slide, in Butte, hard-rock miners are princes.By Robert Struckman, 7-27-08
Above: Mel Case has been a miner since 1966. Below: The gritty good stuff. Photos by Alexia Beckerling. Click here or on either image for Alexia's full slideshow from a day at the mine.
Falling prices may be taking the sheen off the real estate economy around the Rocky Mountain West, but some outposts of the once-left-for-dead resource economy is practically printing money: the copper pits of Butte.
The copper pits in Butte? Isn’t that a defunct Superfund site? Superfund, yes, but “defunct” is not quite the right word.
The Berkeley Pit and its smaller sibling, the Continental, employ only 348 miners and support staff. (Copper mining employed tens of thousands a century ago) But while the hard rock miners of old toiled in dangerous conditions, nowadays a Butte mining job is one to die for in a very different way.
Missoula industrialist Dennis Washington bought Butte’s huge open pit copper mine and mill from Atlantic Richfield Co. in 1985, when copper was 60 cents a pound. Frank Gardner, the mine’s old manager, stayed on with Washington and helped broker a union-busting deal with the miners. Workers would all earn the same starting base salary - 80 percent of the average pay for hard-rock miners in the region - plus 10 percent of the mine’s net profits.
“It’s a clean thing. Everyone can understand it. It’s 10 percent of the bottom line,” Gardner told me last week. “And electricians make the same base salary as the guy cleaning the belts.”
The deal allowed the mine to offer its copper at below-market rates, even when prices drop below the point where most mines can operate with a profit. And the copper price did drop at first, down to a bleak 58 cents a pound. But by the end of 1986, copper had risen to $1.30 a pound, and the mine turned a few million.
These days? The breakeven point, said mine president Rolin Erickson, is about $1 per pound for copper, if a byproduct called molybdenum is at about $8 per pound.
Last week, copper on the chalkboard at the mine was listed at $3.85 per pound, and moly, precious moly, was almost $34 per pound.
That has turned Butte’s hard rock miners into princes, among the highest-paid employees in the Big Sky. Salaries and bonuses, it is said, start in the range of $90,000.
And how much money is Montana Resources making? The company won’t say – it’s privately held – but the answer is, well, one hell of a lot. According to my admittedly crude financial analysis, the mine produced copper worth more than $1 million every day last year.
Even with all that money sloshing around, some things have blessedly stayed the same. Just go to the East Side Athletic Club off Continental Drive in Butte. Before your eyes adjust, the modest barroom - with its pool tables and long, wooden bar - may seem a bit dark, but then the soft light turns welcoming. Last week, patrons sat at stools at the bar. A few tossed dice in a low-ante game.
This is where Montana Resources miners sometimes gather, especially after their final 12-hour shift in a seven-day workweek.
A guy named Mel Case leaned against the bar with a friendly ease. He’s been a miner for more than four decades, and so has known the hard times from played out mines and low metal prices. It feels good to be on the upside. He’s also terribly generous. During our conversation, he left the bar and returned a short time later with a bag of homemade kielbasa.
Case and Jim Cutting, who at the mine operates a DC9 Caterpillar under the haunches of the gigantic, apartment-sized shovel and its duplex-sized dump trucks, explained the good times with a sturdy pride in the work they do, the copper they provide the world market. (The Montana ore is shipped by rail and ship to China for smelting.) The scale of the operation is hard to imagine.
“I’ve got a picture that shows 27 guys standing in the bucket of that shovel,” Cutting says. “And we’re all standing on the teeth.”
It’s also hard to imagine the profit-sharing checks brought home by these down-to-earth guys in their T-shirts and torn plaids, thanks to copper and that sweet moly.
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Dennis Washington bets large, and wins large. His buying M-K in Boise, which puts him right there with Bechtel, Peter Kiewit, Kellogg Brown Root (Haliburton subsidiary) in line for cost plus defense contracts, just adds to his pile, and a deserved one at that.
It appears Washington made a good faith deal, and is keeping it. That compact with the miners means that both they and he have better job security than most in the business. Perhaps it will be a model for others, but I doubt it.
In a world wide economic slow down, there will be price softening. Just how it works. And, if you have trouble with sending ore to China, you should just drive down to Boulder and read the signs that tell of the precious metal ores that were shipped to Europe for smelting during Montana's early gold and silver rushes. The miners from Wales just followed the ore to its source for work in Boulder, Helena, and Butte.
The great and very under told story about mining and the New West, is that specie, precious metals, backed currency and propped up banks and lenders. Prior to the discovery of gold in California, and then all over the New West, the U.S. had to borrow European money to build infrastructure. We had to sell manufactured goods, and agricultural products like cotton and tobacco off shore to gain credit to expand industry. We were dependent upon Europe for our capital, and that slowed development greatly. The mining, the mining laws for public lands, all allowed the U.S. to become financially independent in the world, and then a world power. Butte was a player in that rise to world economic power. Bold leadership, hard work, and the ability to buy the government you want drove the process.