ASARCO LLC is a mining, smelting, and refining company based in Tucson, Arizona that mines and processes primarily copper. The company, a subsidiary of Grupo México, is currently in Chapter 11 bankruptcy. ASARCO planned to emerge from bankruptcy in 2008, and opposes calls for it to totally liquidate its mining and industrial assets.[1]
Its three largest open pit mines are the Mission, Silver Bell and the Ray mines in Arizona. Its mines produce 350 to 400 million pounds of copper a year. ASARCO conducts solvent extraction/electrowinning at the Ray and Silver Bell mines in Pima County, Arizona and Pinal County, Arizona and a smelter in Hayden, Arizona. Before its smelting plant in El Paso, Texas was suspended in 1999 it was producing 1 billion pounds of anodes each year. Refining at the mines as well as at a copper refinery in Amarillo, Texas produce 375 million pounds of refined copper each year.
ASARCO's hourly workers are primarily represented by the United Steelworkers.
ASARCO has 20 superfund sites across the United States, and it is subject to considerable litigation over pollution.
As of September 2009, ASARCO was the focus of a bidding war begun in May 2008 between its own parent company Grupo México and India-based Sterlite Industries. On August 31, 2009, U.S. Bankruptcy Judge Richard Schmidt recommended that U.S. District Judge Andrew Hanen accept Grupo México's $2.5 billion bid for ASARCO as it prepares to come out of bankruptcy. However, on September 11, Sterlite increased its bid from $2.14 billion to $2.57 billion and requested that the court evaluate its new offer before issuing a final decision
By the 1950s it became clear that ASARCO's future expansion needed to focus on mining. As large mining companies began to do their own smelting, ASARCO adjusted by seeking to become its own best customer, assuring a steady source of raw ores. ASARCO had obtained full rights to the rich copper property of Toquepala in southern Peru in 1948. By the mid-1950s the company had teamed with Phelps Dodge, Cerro de Pasco Corporation, and Newmont Mining to form the Southern Peru Copper Corporation, with ASARCO controlling a 57% share. Southern Peru borrowed $120 million from the Export-Import Bank to develop an open-pit mine at Toquepala, and the mine was still productive in 1990.
In 1952, ASARCO further diversified by entering the asbestos field at Black Lake in Quebec. The 1950s were not particularly profitable for ASARCO. Income from the Mexican properties, which were crucial to the company's survival through the Depression, was cut into by an increase in the export duty and devaluation of the peso in 1954. Lead and zinc prices declined around this time as well. Kenneth Brownell, chairman since Roger Straus's retirement a year earlier, died in 1958, and John D. MacKenzie took over as chief executive. The same year, the Kennecott Copper Corporation, a huge source of copper for ASARCO's smelters for over 50 years, ended its contract, and finally bought ASARCO's Garfield smelter in 1959. The year 1959 also brought the longest copper strike in history, which kept ASARCO's 13 U.S. smelters and refineries shut down for 113 production days.
American Smelting and Refining Company entered the 1960s still the world's leading custom smelter. As lead and zinc prices continued to decline, the company's emphasis was turned toward copper mining. With the Mount Isa and Toquepala properties beginning to pay off well and the addition of the Mission copper mine in Arizona, ASARCO was the fourth-largest copper producer by 1963, behind Kennecott, Anaconda, and Phelps Dodge. Under MacKenzie, efforts were made to cut costs, including a 20% decrease in payroll, and more importantly, the use of inexpensive strip mining techniques at the Peru mines. At the time Edward Tittman assumed the chairmanship in 1963, ASARCO was continuing to integrate downward into mining while many of its major customers integrated upward into ore processing. Secondary metals remained important, with the construction of a plant to process molybdenum, a copper by-product, at the Mission site in 1964. In 1965, with profits from the Mexican operations drying up, the Mexican mines and plants were reorganized as ASARCO Mexicana, S.A., and a majority interest was sold to Mexican investors. The San Xavier North mine adjacent to Mission began operating in 1967.
By the early 1970s copper was accounting for nearly two-thirds of ASARCO's earnings. The company remained active in other areas as well, purchasing the American Limestone Company and four zinc mines in Tennessee in 1971. ASARCO continued to expand in copper production under chairman Charles Barber, opening the Sacaton copper mine in Arizona in 1974. In 1975 American Smelting and Refining Company officially changed its name to ASARCO, and the obsolete copper-refining plants in Baltimore and Perth Amboy, New Jersey, were replaced by the new facility in Amarillo, Texas.
During the period from 1974 to 1978, ASARCO's growth was impeded by labor problems and market fluctuations. Wall Street observers voiced concern that the Peruvian government might expropriate ASARCO's properties there, expropriation having been a problem for Anaconda and Kennecott in Chile. Between 1977 and 1978 ASARCO borrowed more than $200 million from nine banks, including Chase Manhattan, where Charles Barber was a director.
Throughout the 1970s antipollution regulations caused problems for ASARCO. The copper smelter in Tacoma was a long-standing source of controversy over its arsenic emissions. Compliance with Environmental Protection Agency regulations was difficult both because of the plant's age and the fact that ASARCO was producing arsenic there as a commercial by-product. The Tacoma smelter was finally closed in 1985, after many variances from compliance, because adapting the smelter to meet emissions standards was considered too costly.
ASARCO recovered somewhat in 1979. Construction began on the Troy silver mine in Montana that year. The Eisenhower Mining Company, a partnership of ASARCO and the Anamax Mining Company, began to gain benefits from the Palo Verde copper deposit near the Mission mine.
The early 1980s were not good years for the mining industry. The price of copper was dropping although demand was up, caused in part by the flooding of the copper market by state-owned companies, particularly in Chile. In 1984 ASARCO lost $306 million. Chairman Ralph Hennebech's only recourse was to cut costs. In 1985, with ASARCO losing $20 million a quarter, Hennebach retired. Richard de J. Osborne, then chief financial officer, became CEO and chairman of the board. Osborne laid off several layers of managers, renegotiated wages and transportation contracts, and cut pension costs. Between 1981 and 1985 annual expenses were cut by more than $200 million. While other companies were selling off assets, ASARCO used its newly replenished cash flow to buy new mines and reserves, such as Kennecott's Ray copper mine, to assure business for its smelters. By the end of 1987 ASARCO was making money again.
Through the late 1980s ASARCO continued to diversify. The company's acquisition of OMI International Corporation in 1988 and the Imasa Group in 1989 helped establish it as a major force in specialty chemicals, metal finishing, and electronics. By 1989 ASARCO was on track toward its goal of becoming a fully integrated, self-sufficient producer of copper and lead. With the 1989 purchase of 49.9% of the Montana copper mining business of Montana Resources, Inc. and the expansion of capacity at the Mission and Ray mines, it was estimated that ASARCO would be able to supply the entire capacity of its own copper-smelting facilities by 1992.
Since its creation just before the turn of the century, ASARCO has survived by adapting. In an industry at the mercy of both historical and geological forces, the company has managed to adjust during every cycle, often by going against the tide of the rest of the industry. If it is able to adapt to the greater environmental and higher technological needs of the metal industry's future, ASARCO's prospects remain good.
Principal Subsidiaries: Enthone-OMI, Inc.; Imasa Group; Southern Peru Copper Corporation (52&percnt); Mexico Desarrollo Industrial Minero, S.A. de C.V. (34&percnt); M.I.M. Holdings Limited (Australia, 19&percnt); Asarco Australia Ltd. (60&percnt).
ASARCO Incorporated is a world leader in the production of nonferrous metals, including copper, lead, zinc, silver, and gold. Among the mines operated by ASARCO or its associated companies are the Mission and Ray open-pit copper mines in Arizona; the Silver Bell Mine in Arizona; the Continental Mine in Montana; four zinc mines near Knoxville, Tennessee; the West Fork and Sweetwater lead mines in Missouri; the zinc, lead, silver, and gold mine at Leadville in Colorado; the Troy silver-copper mine in Montana; and two silver mines in Idaho, at Galena and Coeur. Processing facilities operated by ASARCO include copper smelters in Hayden, Arizona, and El Paso, Texas; a copper refinery in Amarillo, Texas; a lead smelter in East Helena, Montana; and a lead refinery in Omaha, Nebraska.
In 1990 ASARCO and its associated companies in Australia, Mexico, and Peru accounted for 12% of free-world mine production of copper, 14% of silver, 14% of lead, and 9% of zinc. Through its subsidiaries, ASARCO is heavily involved in the manufacture of specialty chemicals for electroplating, metal finishing, and electronics applications. In addition to processing the products of its own mines, ASARCO acquires ore from other companies, either to process for a fee or to process and then sell on the open market. Consumers encounter these refined metals in many forms, including zinc in the form of flashlight batteries, copper in the form of car radiators, lead in the form of automotive batteries, and silver in the form of coatings on photographic film. ASARCO has entered into hazardous-waste recycling as well.
Founded in 1899 as American Smelting and Refining Company--known informally as ASARCO--the company was a giant from the start. Henry H. Rogers was a 19th-century financial baron who had collaborated with John D. Rockefeller in constructing the huge Standard Oil Trust. ASARCO was his attempt to similarly dominate the nonferrous metals industry. In that era of corporate consolidation and combination, the smelting and refining business seemed to be a perfect candidate for monopolization. Rogers--along with William Rockefeller and the copper-rich Lewisohn brothers, Adolph and Leonard--had formed the United Metals Selling Company in the 1890s. This trust was so successful that they launched the even larger American Smelting and Refining Company in 1899. At its creation ASARCO consisted of 23 different smelting companies. Conspicuously absent from the ASARCO roster were concerns controlled by the Guggenheim family. In 1899, Rogers invited the Guggenheims to become part of ASARCO. They turned down his offer. The Guggenheims were not interested in being part of an organization that was not under their family control. Over the next couple of years, the Guggenheims took the matter into their own hands and gained control of ASARCO through aggressive business tactics.
Meyer Guggenheim, the patriarch of the family, had emmigrated from Switzerland in 1848. He amassed his fortune through an extremely diverse variety of business ventures, from manufacturing and peddling stove polish, to wholesale spice sales, to importing fine laces and embroideries. By 1879, at the age of 51, Meyer Guggenheim was nearly a millionaire. His entrance into the metals industry came in 1881, when he bought a one-third interest in the A.Y. and the Minnie lead and silver mines in Leadville, Colorado. By 1888 these two mines were making about $750,000 a year, and the Guggenheim metal empire had been born.
Statistics:
Public Company
Incorporated: 1899 as American Smelting and Refining Company
Employees: 9,300
Sales: $2.21 billion
Stock Index: New York
Address:
180 Maiden Lane
New York
New York
10038
United States
Its three largest open pit mines are the Mission, Silver Bell and the Ray mines in Arizona. Its mines produce 350 to 400 million pounds of copper a year. ASARCO conducts solvent extraction/electrowinning at the Ray and Silver Bell mines in Pima County, Arizona and Pinal County, Arizona and a smelter in Hayden, Arizona. Before its smelting plant in El Paso, Texas was suspended in 1999 it was producing 1 billion pounds of anodes each year. Refining at the mines as well as at a copper refinery in Amarillo, Texas produce 375 million pounds of refined copper each year.
ASARCO's hourly workers are primarily represented by the United Steelworkers.
ASARCO has 20 superfund sites across the United States, and it is subject to considerable litigation over pollution.
As of September 2009, ASARCO was the focus of a bidding war begun in May 2008 between its own parent company Grupo México and India-based Sterlite Industries. On August 31, 2009, U.S. Bankruptcy Judge Richard Schmidt recommended that U.S. District Judge Andrew Hanen accept Grupo México's $2.5 billion bid for ASARCO as it prepares to come out of bankruptcy. However, on September 11, Sterlite increased its bid from $2.14 billion to $2.57 billion and requested that the court evaluate its new offer before issuing a final decision
By the 1950s it became clear that ASARCO's future expansion needed to focus on mining. As large mining companies began to do their own smelting, ASARCO adjusted by seeking to become its own best customer, assuring a steady source of raw ores. ASARCO had obtained full rights to the rich copper property of Toquepala in southern Peru in 1948. By the mid-1950s the company had teamed with Phelps Dodge, Cerro de Pasco Corporation, and Newmont Mining to form the Southern Peru Copper Corporation, with ASARCO controlling a 57% share. Southern Peru borrowed $120 million from the Export-Import Bank to develop an open-pit mine at Toquepala, and the mine was still productive in 1990.
In 1952, ASARCO further diversified by entering the asbestos field at Black Lake in Quebec. The 1950s were not particularly profitable for ASARCO. Income from the Mexican properties, which were crucial to the company's survival through the Depression, was cut into by an increase in the export duty and devaluation of the peso in 1954. Lead and zinc prices declined around this time as well. Kenneth Brownell, chairman since Roger Straus's retirement a year earlier, died in 1958, and John D. MacKenzie took over as chief executive. The same year, the Kennecott Copper Corporation, a huge source of copper for ASARCO's smelters for over 50 years, ended its contract, and finally bought ASARCO's Garfield smelter in 1959. The year 1959 also brought the longest copper strike in history, which kept ASARCO's 13 U.S. smelters and refineries shut down for 113 production days.
American Smelting and Refining Company entered the 1960s still the world's leading custom smelter. As lead and zinc prices continued to decline, the company's emphasis was turned toward copper mining. With the Mount Isa and Toquepala properties beginning to pay off well and the addition of the Mission copper mine in Arizona, ASARCO was the fourth-largest copper producer by 1963, behind Kennecott, Anaconda, and Phelps Dodge. Under MacKenzie, efforts were made to cut costs, including a 20% decrease in payroll, and more importantly, the use of inexpensive strip mining techniques at the Peru mines. At the time Edward Tittman assumed the chairmanship in 1963, ASARCO was continuing to integrate downward into mining while many of its major customers integrated upward into ore processing. Secondary metals remained important, with the construction of a plant to process molybdenum, a copper by-product, at the Mission site in 1964. In 1965, with profits from the Mexican operations drying up, the Mexican mines and plants were reorganized as ASARCO Mexicana, S.A., and a majority interest was sold to Mexican investors. The San Xavier North mine adjacent to Mission began operating in 1967.
By the early 1970s copper was accounting for nearly two-thirds of ASARCO's earnings. The company remained active in other areas as well, purchasing the American Limestone Company and four zinc mines in Tennessee in 1971. ASARCO continued to expand in copper production under chairman Charles Barber, opening the Sacaton copper mine in Arizona in 1974. In 1975 American Smelting and Refining Company officially changed its name to ASARCO, and the obsolete copper-refining plants in Baltimore and Perth Amboy, New Jersey, were replaced by the new facility in Amarillo, Texas.
During the period from 1974 to 1978, ASARCO's growth was impeded by labor problems and market fluctuations. Wall Street observers voiced concern that the Peruvian government might expropriate ASARCO's properties there, expropriation having been a problem for Anaconda and Kennecott in Chile. Between 1977 and 1978 ASARCO borrowed more than $200 million from nine banks, including Chase Manhattan, where Charles Barber was a director.
Throughout the 1970s antipollution regulations caused problems for ASARCO. The copper smelter in Tacoma was a long-standing source of controversy over its arsenic emissions. Compliance with Environmental Protection Agency regulations was difficult both because of the plant's age and the fact that ASARCO was producing arsenic there as a commercial by-product. The Tacoma smelter was finally closed in 1985, after many variances from compliance, because adapting the smelter to meet emissions standards was considered too costly.
ASARCO recovered somewhat in 1979. Construction began on the Troy silver mine in Montana that year. The Eisenhower Mining Company, a partnership of ASARCO and the Anamax Mining Company, began to gain benefits from the Palo Verde copper deposit near the Mission mine.
The early 1980s were not good years for the mining industry. The price of copper was dropping although demand was up, caused in part by the flooding of the copper market by state-owned companies, particularly in Chile. In 1984 ASARCO lost $306 million. Chairman Ralph Hennebech's only recourse was to cut costs. In 1985, with ASARCO losing $20 million a quarter, Hennebach retired. Richard de J. Osborne, then chief financial officer, became CEO and chairman of the board. Osborne laid off several layers of managers, renegotiated wages and transportation contracts, and cut pension costs. Between 1981 and 1985 annual expenses were cut by more than $200 million. While other companies were selling off assets, ASARCO used its newly replenished cash flow to buy new mines and reserves, such as Kennecott's Ray copper mine, to assure business for its smelters. By the end of 1987 ASARCO was making money again.
Through the late 1980s ASARCO continued to diversify. The company's acquisition of OMI International Corporation in 1988 and the Imasa Group in 1989 helped establish it as a major force in specialty chemicals, metal finishing, and electronics. By 1989 ASARCO was on track toward its goal of becoming a fully integrated, self-sufficient producer of copper and lead. With the 1989 purchase of 49.9% of the Montana copper mining business of Montana Resources, Inc. and the expansion of capacity at the Mission and Ray mines, it was estimated that ASARCO would be able to supply the entire capacity of its own copper-smelting facilities by 1992.
Since its creation just before the turn of the century, ASARCO has survived by adapting. In an industry at the mercy of both historical and geological forces, the company has managed to adjust during every cycle, often by going against the tide of the rest of the industry. If it is able to adapt to the greater environmental and higher technological needs of the metal industry's future, ASARCO's prospects remain good.
Principal Subsidiaries: Enthone-OMI, Inc.; Imasa Group; Southern Peru Copper Corporation (52&percnt); Mexico Desarrollo Industrial Minero, S.A. de C.V. (34&percnt); M.I.M. Holdings Limited (Australia, 19&percnt); Asarco Australia Ltd. (60&percnt).
ASARCO Incorporated is a world leader in the production of nonferrous metals, including copper, lead, zinc, silver, and gold. Among the mines operated by ASARCO or its associated companies are the Mission and Ray open-pit copper mines in Arizona; the Silver Bell Mine in Arizona; the Continental Mine in Montana; four zinc mines near Knoxville, Tennessee; the West Fork and Sweetwater lead mines in Missouri; the zinc, lead, silver, and gold mine at Leadville in Colorado; the Troy silver-copper mine in Montana; and two silver mines in Idaho, at Galena and Coeur. Processing facilities operated by ASARCO include copper smelters in Hayden, Arizona, and El Paso, Texas; a copper refinery in Amarillo, Texas; a lead smelter in East Helena, Montana; and a lead refinery in Omaha, Nebraska.
In 1990 ASARCO and its associated companies in Australia, Mexico, and Peru accounted for 12% of free-world mine production of copper, 14% of silver, 14% of lead, and 9% of zinc. Through its subsidiaries, ASARCO is heavily involved in the manufacture of specialty chemicals for electroplating, metal finishing, and electronics applications. In addition to processing the products of its own mines, ASARCO acquires ore from other companies, either to process for a fee or to process and then sell on the open market. Consumers encounter these refined metals in many forms, including zinc in the form of flashlight batteries, copper in the form of car radiators, lead in the form of automotive batteries, and silver in the form of coatings on photographic film. ASARCO has entered into hazardous-waste recycling as well.
Founded in 1899 as American Smelting and Refining Company--known informally as ASARCO--the company was a giant from the start. Henry H. Rogers was a 19th-century financial baron who had collaborated with John D. Rockefeller in constructing the huge Standard Oil Trust. ASARCO was his attempt to similarly dominate the nonferrous metals industry. In that era of corporate consolidation and combination, the smelting and refining business seemed to be a perfect candidate for monopolization. Rogers--along with William Rockefeller and the copper-rich Lewisohn brothers, Adolph and Leonard--had formed the United Metals Selling Company in the 1890s. This trust was so successful that they launched the even larger American Smelting and Refining Company in 1899. At its creation ASARCO consisted of 23 different smelting companies. Conspicuously absent from the ASARCO roster were concerns controlled by the Guggenheim family. In 1899, Rogers invited the Guggenheims to become part of ASARCO. They turned down his offer. The Guggenheims were not interested in being part of an organization that was not under their family control. Over the next couple of years, the Guggenheims took the matter into their own hands and gained control of ASARCO through aggressive business tactics.
Meyer Guggenheim, the patriarch of the family, had emmigrated from Switzerland in 1848. He amassed his fortune through an extremely diverse variety of business ventures, from manufacturing and peddling stove polish, to wholesale spice sales, to importing fine laces and embroideries. By 1879, at the age of 51, Meyer Guggenheim was nearly a millionaire. His entrance into the metals industry came in 1881, when he bought a one-third interest in the A.Y. and the Minnie lead and silver mines in Leadville, Colorado. By 1888 these two mines were making about $750,000 a year, and the Guggenheim metal empire had been born.
Statistics:
Public Company
Incorporated: 1899 as American Smelting and Refining Company
Employees: 9,300
Sales: $2.21 billion
Stock Index: New York
Address:
180 Maiden Lane
New York
New York
10038
United States