To Move A Mountain

Railroads and mining in Utah's Bingham Canyon

Copper Era, From 1981 to today

By Don Strack

(This page last updated on June 24, 2006)

Timeline

June 4, 1981:
Standard Oil Company of Ohio (SOHIO) bought Kennecott Minerals Company (KMC); British Petroleum (BP) owns 53 percent of SOHIO; British government owns 25 percent of BP, Bank of England owns 20 percent. (Salt Lake Tribune, September 24, 1981, p. B1)

SOHIO paid $62.00 per share. (Salt Lake Tribune, September 20, 1981, p. D10)
$1.77 billion takeover of Kennecott by SOHIO. (Salt Lake Tribune, March 27, 1981, p. C2)
SOHIO made announcement of takeover on Thursday March 12, 1981. (Salt Lake Tribune, March 15, 1981, p. D12)
Merger of SOHIO and Kennecott first proposed on March 18, 1981, when a notice was filed with the Anti-Trust Division of the U.S. Justice Department. (Salt Lake Tribune, March 26, 1981, p. G11)
SOHIO traded 25 percent of itself for BP's Alaska North Slope holdings in 1969. By 1980 BP had purchased 53 percent interest in SOHIO. (Salt Lake Tribune, March 17, 1981, p. D3)
SOHIO was largest producer of crude oil in United States, at 9 percent of all U.S. production - more than half of the Alaska North Slope. Kennecott shareholders voted to accept the merger on May 5, 1981. (Salt Lake Tribune, May 2, 1981, p. C5)
Kennecott shareholders approved the sale. Sale not final until Federal Trade Commission reviews proposed merger. (Salt Lake Tribune, May 6, 1981, p. C10)
Federal Trade Commission approved merger of SOHIO and Kennecott on June 2, 1981. (Salt Lake Tribune, June 3, 1981, p. C10)
SOHIO formally acquired Kennecott on June 4, 1981, after approval by Kennecott shareholders. (Salt Lake Tribune, July 31, 1981, p. B11)

October 1981:
Modernization of ore haulage and pit crusher planned, along with a new concentrator site. New smelter began operations in spring 1978. (Salt Lake Tribune, October 30, 1981, p. B1)

December 1981:
Visitor Center at Bingham Mine closed, to be replaced by a new one, to be built later. Bingham Mine has been listed as a National Historic Site since 1972. (Salt Lake Tribune, May 27, 1981, p. D3)

1981:
Production for the Bingham Mine, at 223,123 tons of copper, is 60 percent of all Kennecott Copper's 1981 production of 372,213 tons of copper. (Salt Lake Tribune, April 6, 1982)

March 3, 1982:
Kennecott Corporation announced a lay off of 530 employees, about 10 percent of the workforce in Utah, beginning on Sunday March 7, 1982. Copper prices had hit a new low of 70 cents per pound, compared to an average price of 80 to 90 cents per pound. (New York Times, March 3, 1982)

July 1, 1982:
910 employees laid off. Lay-offs began on February 12, 1982, with a total so far of 2,000 employees laid off. (Deseret News, July 1, 1982, p. B1)

fall 1982:
Truck haulage replaces rail haulage from 5440-Level (one level below 5490-Tunnel) down to the 5190-Level. (source not recorded)

December 1982:
Four 1500 hp locomotives arrive (numbers 714-717), for service as switchers, to replace retired electrics. (source not recorded)

1982:
Due to a glut in the copper market, Kennecott has had a $48 million loss during this first quarter. Kennecott began 1982 with 7,300 workers. Ray Mines Division was shut down on May 2, 1982, and was cut to just care and maintenance on August 15, 1982. (Salt Lake Tribune, July 1, 1982, p. A1)

September 1982:
Copper selling in range of 55 cents per pound in recent months, compared to $1.80 per pound in February 1980. (Deseret News, September 1982, p. B1)

1983:
Kennecott Minerals Company became Kennecott, (an operating company of SOHIO) (source not recorded)

In 1983, the entire mine was converted to shovel and truck mining. Rail haulage was used for reload only, at the 6040, 5840, and 5490-Tunnel levels. The last rail and shovel mining took place between the 5540 and 5990 levels. Prior to the end of 1983 there were 42 truck haulage levels, 36 above the 5990-Level and 6 below the 5490-Level. The 11 rail haulage levels were between the 5490-Level and the 6040-Level. By this time there was very little ore left above the 6040-Level and all operations were concerned with removal of waste to allow ore mining in the lower levels. (Strack, 1983 research notes)

Kennecott closed its 17.5 Mw coal-fired generating station because of financial losses. In the meantime, Kennecott could purchase power from Utah Power and Light at a reduced rate. The generating station's 100 employees remained working for maintenance purposes. (Coal Age, Volume, number 6, June 1983, p. 33, "Coal in Brief, Plant Closed")

Kennecott was reported as being the nation's largest producer of copper, including production from all four mines: Bingham, Ray, Chino, and Ely. (part from New York Times, November 14, 1987, "four years ago")

August 1983:
Kennecott's $400 million modernization program depends on proposed property breaks by Utah State Legislature. (Deseret News, August 30, 1983, p. B1)

The last waste train was operated on September 19, 1983. (Strack, 1983 research notes)

September 19, 1983:
Switcher number 704 was transferred to Ore Haulage. Renumbered to 123 on 13 January 1984. (from Kennecott records at Dry Fork shops and at Magna engine house)

November 1983:
Two pit high cab diesel locomotives (number 784 and 786) were transferred to Ore Haulage (as number 910 and 911) (Strack, 1983 research notes)

July 1, 1984:
Kennecott laid off 1,795 workers on July 1, 1984. (Deseret News, July 13, 1984, p. B1) 2,000 workers (two-thirds of workforce) were laid off. (Deseret News, March 26, 1985)

July 1, 1984:
Ore Haulage Department was shut down and the organization was dissolved. Ore trains will be operated by the mine crews. (Ore haulage logbook)

September 4, 1984:
Former Ore Haulage crews transferred to the mine began the operation of ore trains to Bonneville crusher, using mine locomotives. Trains are moving 35,000 tons per day, using 400 ore cars. (Strack, 1984 research notes)

October 1984:
Copper production at Bingham took about 1,200 to 1,400 cars of copper ore to produce about 20 cars of concentrate for the smelter. Kennecott's Chino operation was sending about 10 cars of concentrate per day to the Utah smelter. (Strack, 1984 research notes)

January 1985:
Utah legislature exempted Kennecott from paying sales tax on purchases of machinery to replace old equipment and equipment needed to expand operations. (Deseret News, March 26, 1985)

January 6, 1985:
Kennecott laid off 100 more workers, leaving just 2,200 workers remaining of a peak in 1980 of 7,300. (Salt Lake Tribune, January 1, 1985, p. C7)

April 30, 1985:
Bingham Canyon Mine operations are shut down. (source not recorded)

August 1985:
Magna, Arthur, and Bonneville Mill operations are shut down. (source not recorded)

February 1986:
Actual construction and site preparation begins on new $400 million modernization program. (Deseret News, August 2, 1988, p. D7)

September 1986:
Bingham Canyon Mine resumes operations. (source not recorded)

January 1987:
Bonneville crusher and Magna concentrators resume operations. (source not recorded)

July 1987:
Smelter turns out first cathode of Utah copper, after reopening of mine. (source not recorded)

November 1987:
"The nation's largest copper producer four years ago, Kennecott, a unit of the British Petroleum Company, now ranks fourth. It has sold most of one of its three mines to Phelps Dodge and all of another to Asarco Inc and now owns a single mine - the Bingham Canyon mine in Utah, which recently reopened for production." (New York Times, November 14, 1987)

1988:
British Petroleum, parent company of BP Minerals America (owner of Bingham Mine), is 21.68 percent owned by the government of Kuwait. They bought the interest after the October 1987 world wide stock market crash, at the urging of the British government. The British had just offered the stock of BP to the open market and the crash was causing it to lose value. (Wall Street Journal, August 10, 1988, p. 13)

September 23, 1988:
New $400 million modernization completed, and six-inch ribbon of copper is cut in formal ceremony. Bingham Mine of Kennecott Utah Copper is owned by BP Minerals America. Ore is dumped into a primary crusher in bottom of pit, passed out of the pit by way of an new conveyor belt running through the old 5490 railroad tunnel, to the new Copperton crusher, crushed to a fine powder, added to water and sent via a new six-inch, 17-mile pipeline to the Garfield smelter. (Deseret News, September 23, 1988, p. D7)

June 1989:
World-wide mineral interests of British Petroleum (including BP Minerals America's Kennecott Utah Copper) were sold to RTZ Corporation for $4.4 billion. The name of BP Minerals America, Kennecott Utah Copper was changed to Kennecott Corporation on or about July 5, 1989. (Salt Lake Tribune, July 6, 1989, p. C1) Negotiations for the sale were first announced by Reuters in mid December 1988. (New York Times, December 15, 1988; Salt Lake Tribune, December 24, 1988; Deseret News, January 3, 1989)

(RESEARCH: Get exact date of sale, and exact date of name change.)

Rio Tinto History

RTZ Corporation had its roots in the Rio Tinto Company organized in 1873 to mine the ancient copper works at Rio Tinto, Spain. In 1962 the Rio Tinto Company merged with The Consolidated Zinc Corporation, which had been organized in 1905 to treat zinc bearing tailings at Broken Hill in New South Wales, Australia. Rio Tinto had previously disposed of two-thirds of its Spanish interests in 1954, and the remainder was also disposed, making the zinc interests in Australia the focus of the new Rio Tinto-Zinc Corporation's activities. Following the 1962 merger, RTZ developed a number of major projects including Palabora (copper) in South Africa, Rössing (uranium) in Namibia, and Neves Corvo (copper and tin) in Portugal. It also grew through acquisitions, including the Borax group in 1968.

Between 1968 and 1985 significant interests in cement, chemicals, oil and gas and manufactured products for the construction and automotive industries were also developed. A major review of corporate strategy between 1987 and 1988 led to a series of disposals and acquisitions which refocused the company on mining and related activities. Between 1988 and 1994 non mining businesses were sold as going concerns, and interests in mining acquired. These included the 1989 acquisition of the major part of British Petroleum's international minerals businesses, and the 1993 acquisition of the Nerco and Cordero coal mining businesses in the US.

The Rio Tinto name came from the December 1995 unification of The RTZ Corporation PLC (of Britian) and CRA Limited (of Australia). On June 2, 1997 The RTZ Corporation PLC became Rio Tinto PLC, and CRA Limited became Rio Tinto Limited.

CRA Limited was originally known as Conzinc Riotinto of Australia. Prior to the 1995 merger with RTZ, CRA had grown through the development of several important mineral discoveries, including Hamersley (iron ore) in Australia, Bougainville (copper) in Papua New Guinea, Comalco (bauxite, alumina refining and aluminium smelting) in Australia and New Zealand, Argyle (diamonds) and Blair Athol and Tarong (coal) in Australia, and Kelian (gold) and Kaltim Prima (coal) in Indonesia. (from http://www.riotinto.com/about/companyhistory.asp)

January 1990:
The new parent company, RTZ Corporation, announced that it would spend $227 million to expand the Utah operations of its Kennecott Corporation subsidiary. (New York Times, January 15, 1990)

March 1992:
Kennecott Utah Copper Corporation (KUCC) became a unit of RTZ Corporation (England). It is reported that a new smelter would be built with a completion date set for 1995. At present, 40 percent of the mine's output is exported for processing. The new smelter will change the amount shipped out for processing. (Locomotive Notes II, Issue 160, July 1992, published late April 1992, p. 4; see also Wall Street Journal, 12 March 1992)

(click here for a brief summary of Kennecott history, through 1995; courtesy of Jim Harrawood's original UtahRails.com web site)

Historical Summary, 1960 Through 1995

Kennecott expanded its power plant in 1960 to a 175,000-kilowatt capacity. By 1961 Kennecott's copper mines included four large open pits in the western United States and one underground mine in Chile. In addition to those in Utah, operations existed in New Mexico, Arizona, and Nevada. In 1963 the company began a four-year, $100,000,000 expansion of operations. Parts of this program led to the 1965 opening of a cone precipitate plant at Bingham, and the Bonneville concentrator and a molybdenum oxide production plant at the Garfield smelter in 1966.

Further expansion led to the demise of the town of Bingham, which ceased to exist in 1971. Later in that decade, the town of Lark also succumbed to mine expansion. In 1977 construction began at the Garfield smelter to comply with the Clean Air Act. By 1978 the 1,215-foot smokestack at the smelter was completed. The smelter ultimately captured 94 percent of the sulfur contained in the copper concentrates.

The year 1980 marked the beginning of a worldwide copper recession which initiated significant changes for Kennecott. Standard Oil of Ohio (SOHIO) in 1981 acquired Kennecott, including the company's Utah Copper operations which had over 7,500 employees. In 1985 operations ceased at the Bingham Canyon mine. New labor agreements were negotiated in 1986, and resumption of all Kennecott Utah Copper operations occurred in 1987. British Petroleum acquired total control of SOHIO in 1987, with Kennecott becoming part of BP Minerals America. In 1988 Kennecott announced a $400,000,000 modernization program under president Frank Joklik.

A revitalized Kennecott Utah Copper began 1988 with the completion of a peripheral tailing discharge system at the tailings pond near Magna, and the start-up of modernized facilities at Bingham and Copperton. These included an in-pit crusher, conveying system, and three grinding lines in the Copperton concentrator, which processed about 85,000 tpd. Rio Tinto Zinc (RTZ) Corporation purchased Kennecott in 1989 and continued the company's expansion. In 1990 a fourth grinding line at a cost of $220,000,000 was begun at the Copperton Concentrator, and it was completed in 1992. This increased the concentrator's production to 125,000 tpd.

Kennecott's overall modernization has vaulted the company to being one of the most efficient copper producers in the world. During the first years of the 1990s, Kennecott Utah Copper, employing 2,400 people, produced approximately 300,000 tons of copper annually plus significant quantities of molybdenum, silver, and gold.

In 1993 Kennecott started construction of a new smelter and modernized refinery at the company's Utah Copper operations at a projected cost of $880,000,000--the largest private investment ever undertaken in Utah. The project was projected for completion in 1995, making the new smelter the largest and cleanest copper smelter in the world, capturing 99.8 percent of the sulfur contained in the copper concentrates. Kennecott, under RTZ, continued to expand in various mining ventures in the United States and throughout the world.

1994:
As part of the expansion of the tailing pond, Kennecott bought the property of the former Chevron Chemical phosphate fertilizer plant:

Chevron Fertilizer Plant: Located just north of the pre-1997 South Tailings Impoundment and mostly buried by the North Tailings impoundment was the Chevron Fertilizer Plant and its wastes. The plant, built in 1952, was originally a joint venture of Kennecott, ASARCO, and Stauffer Chemical. The plant treated phosphate ores with sulfuric acid to produce phosphoric acid and dry phosphate fertilizer products. Annual production ranged between 10,000 and 70,000 tons/year. Wastes included 300,000 tons/year of phosphogypsum. Chevron bought the facility in 1981. They ceased production of the phosphoric and acid and dry phosphate in 1986. Then they leased the land to FCI Agri-chem who mined the phosphogypsum tailings at the site for use as soil additives. The wastes covered about 385 acres and was thought to be about 6 million cubic yards. Kennecott bought the land in 1994 for use in the North Expansion and dismantled the plant in 1995 retaining only the administration building. There were 4 above ground fuel oil storage tanks that were removed and contamination in the footprint excavated and placed in a land farm at the site. There were also reports of the burial of Picloram at the site, but an investigation did not find any traces of this pesticide. (source)

Fall 1999:
Kennecott had two concentrators. The new one at Copperton was supplied by a conveyor belt directly from the pit and the old "North Concentrator" at Magna. The North Concentrator was supplied by rail. So as long as the North Concentrator was operating, the railroad was too. When the North Concentrator was shut down (date unknown) it was the end of the rail operation to Copperton. Kennecott still does a lot of intra plant switching with their own engines within their huge plant complex. (message from Dick Ebright posted to Trainorders.com, May 21, 2004)

June 1, 2001:
Kennecott shut down the original Magna mill. In its May 25th news release, Kennecott gave the reason for the closure as a reduction of operating costs and improved efficiencies. During 2000, Kennecott had shipped 30,000 tons of copper concentrate to independent refineries and smelters because its mills were producing more concentrate than Kennecott could process in its Garfield smelter.

KENNECOTT TO CURTAIL OPERATIONS

MAGNA, Utah---May 25, 2001---Kennecott Utah Copper Corporation (KUC) will start to suspend operations at its North Concentrator Plant on or about June 1. Associated rail haulage operations will also be curtailed. The curtailment will impact about 235 hourly and salaried employees, and will reduce KUC's annual ore production by about 18 percent. Worker Adjustment and Retraining Notification Act notices were issued on May 25 announcing the curtailment. According to Bruce Farmer, Kennecott's president and CEO, "The action is in response to difficult market conditions and the need to improve the Company's business performance. Our costs are too high and the closure of the higher cost, older North Concentrator Plant, will help reduce our costs over all. This action will be only a part of an ongoing drive to reduce costs and improve efficiencies." In the last three years, continuing low copper prices and increased costs of production have resulted in United States copper production being reduced by more than 33 percent. "Kennecott regrets the impact that this necessary action will have on employees. To minimize this impact, the Company is discussing an enhanced early retirement for eligible hourly and salaried employees. Meetings have been held with union officials to discuss the proposal for hourly represented employees. An early retirement program also will be offered to eligible salaried employees. We are hopeful that the loss of jobs can be minimized through attrition," said company spokesman Louie Cononelos. He added that the Company believes that the proposed enhanced retirement plans and the reassignment of personnel should reduce the number of involuntary terminations. The North Concentrator is Kennecott's oldest plant. Its Bonneville Crushing and Grinding facility was built in 1966, and its Magna Flotation facility was upgraded in 1982. Following completion of Kennecott's Bingham Canyon Mine and Copperton Concentrator modernization in 1988, the North Concentrator was to be closed, but its operations were continued because of high copper prices. In 2000, KUC sold approximately 30,000 tons of copper in concentrate produced from the North Concentrator to independent smelting and refinery facilities because it was unable to process it on site. According to Farmer, KUC's smelting and refining production will be maximized as the Company reduces operating costs and improves efficiencies.

June 30, 2006:
Kennecott reopened the public visitor's center that overlooked the Bingham Canyon open-pit mine. The new 6,000 square-foot visitor's center was located 300 feet lower in the mine, and included "1,200 square feet of additional exhibit space and 12 new exhibits and displays, including four video locations. Visitors also may view a new 16-minute video in a 90-seat theater." (Salt Lake Tribune, June 24, 2006, Business Digest)

New Soccer Stadium Named for Rio Tinto

On September 30, 2008, Rio Tinto Group and Salt Lake City's professional soccer team, Real Salt Lake, announced that the team's new stadium in Sandy, Utah, would be named Rio Tinto Stadium. In return for naming rights for the stadium, completed at a reported cost of $115 million, with a seating capacity of 20,000, the mining company would pay the soccer team $1.5 million to $2 million a year for 15 years. The team's opening game at the new stadium was planned for October 9, 2008. (New York Times, September 30, 2008)

November 8, 2008:
Kennecott announced that they would build a molybdenum smelter at Magna, with ground breaking set for Tuesday November 11, 2008. Kennecott said the $270 million Molybdenum Autoclave Processing facility will run on clean energy and reduced emissions. Tom Albanese, chief executive of Kennecott parent company Rio Tinto, said that China and India are big buyers of molybdenum, a silvery white metal with many applications, including the points on spark plugs that fire everyday engines. The news release stated that molybdenum is a byproduct of copper production, and is used in high-strength steel alloys. It's also a key ingredient in oil refining. (KSL.com, November 8, 2008)

To Move A Mountain

Railroads and mining in Utah's Bingham Canyon

Copper Era, From 1981 to today

See also:

Timeline

See also: