Arizona Mining Association

BHP Copper, INC - State of Closure
San Manuel Operations

View of the San Manuel Mine Prior to Reclamation

On June 25, 1999, BHP Billiton (BHPB) announced the suspension of operations at the BHP Copper Inc. (BHP) San Manuel copper mine and Smelter in Pinal County, Arizona. Subsequent to this announcement, BHPB aggressively pursued a number of alternatives for the underground mine and the smelter, including continued curtailed operations, sale to a qualified operator and closure of the property. After consideration of these various alternatives over a 3.5-year period, BHPB announced final closure of the mine site on Jan. 15, 2002. The San Manuel Plant operations (milling, smelting, refining, and tailings) were also placed into "care and maintenance" in June of 1999. After more than four years of option analyses, BHP Copper announced permanent closure of the Plant site on October 22, 2003. San Manuel History

Large-scale development of the San Manuel mine and plant was spurred by a $94 million investment in 1952 (equivalent to $678 million in 2005) by the U.S. Reconstruction Finance program to expand the underground mine and to build the plant site and create the town of San Manuel. Between 1952 and 1956, new head frames were erected at the mine site, the town site was developed as a model city and the smelter and refinery were constructed. The first production of copper in the smelter was achieved on Jan. 8, 1956

The mine and plant closure teams are at different stages of execution of the respective closure plans. In large part, due to the difference in timing of the closure decisions. The mine is in the reclamation phase (earthmoving and re-contouring) While the plant is still undergoing demolition (see photo figure 5) in advance of reclamation. Closure of both the former mine and plant site are being conducted to ensure that we support the commitments contained in the BHP Billiton Health, Safety, Environmental and Community (HSEC) Policy. One of the overriding principles that the SW Copper's closure team has continually demonstrated is the commitment to "aspire to zero harm to people and the environment."

The safety and environmental results so far, have been remarkable with only a single lost time injury and excellent environmental performance. This can of course be attributed to the involvement of every team member (including our contractors) being accountable for the programs established to address safety and environmental performance. If that wasn't enough, the team has developed a high level of "transparency" with our stakeholder (including the regulators) through regular meetings, tours and community meetings. Finally, we have identified the aspects of sustainable development and developed projects that will benefit the Tri-Community long after closure and reclamation of both of the sites is complete in late 2007. BHP Coppers' closure project, even now, is being lauded by a number of stakeholders as setting a benchmark for its approach to safety, environmental, project management and project execution from which others in industry will be able to learn.

The safety and environmental results so far, have been remarkable with only a single lost time injury and excellent environmental performance.

The mine site included underground mining, open pit, insitu leaching, heap leach, and an SX/EW plant and many other support maintenance shops. This was accomplished in large part, by hoisting a record 700 million tons of ore from the underground over its 50 years of production. The industrial site covers approximately 500 acres (203 ha).

View of ongoing Smelter Demolition, June 2005

During the 3-year engineering and option analysis phase of the project initiated in 1999 a long list of activities have been completed including: closure studies, site characterization, mobile equipment removal, environmental clean up, asset sales and ground water modeling. In addition since formal closure was announced in 2002 the project team has completed the installation of an approximately 10.5 mile long 6-ft. chain link fence, demolition of dozens of buildings, seven head frames and assorted infrastructure. These efforts have combined to generate over 21 million short tons of scrap metal that was cut up and recycled.

Completion of the aforementioned activities in less than 24 months allowed the next phase of the project to commence in November of 2004. That is when Ames Construction, Inc. mobilized to the site and embarked on recontouring, and relocating approximately 6.69 million cu. yds of soil at the site, so far (see figure 4). This phase of the project reached the 50 percent completion milestone at the end of May of 2005. Ames has also crushed, hauled and placed over 37,000 cu. yds of crushed and sized stone into over 5 miles of lateral and drainage channels. They have accomplished all of this without having a single recordable injury.

One of the criteria established by the team for closure was that all slopes be re-contoured to achieve an overall slope of 3:1 (3 horizontal to 1 vertical). This will promote stability and maintain surfaces conducive to supporting new plant growth, minimize erosion and maintenance and to mimic the natural topography of the area (this same design criteria will be utilized at the plant site).

The Heap Leach facility posed a unique challenge because any one who has ever driven on Highway 77 near Mammoth, Arizona can attest "it is a distinct feature in the area". Standing over 150 ft. high and spanning over 250 acres (over 93 million tons of oxide material) this stark facility required a great deal of earth work to achieve the proper slope configuration and improve the aesthetics. This became significant because the earthwork could not be accomplished without extending the existing liner by 1.2 million sq. ft. Extension of the liner will allow for the heap leach material to be fully contained on the liner and will provide for proper water management.

Additional demolition, environmental, and other support activities have been undertaken by SRK Consulting, Brandenburg Industrial Service Co., Western Power Service and Construction Company, Inc., Southwest Hazards Company, TB Contractors, and Ashton Contractors and Engineers. Closure work at the site is being supervised by a staff of contract managers, safety supervisors, and BHP Copper personnel.

Groundwater down gradient from the site will be monitored by a new series of monitoring wells for as many years as required to demonstrate compliance with Aquifer Water Quality Standards under the Aquifer Protection Permit program.

View of Reclamation on a portion of the former Mine Site

This former industrial site consisted of a copper concentrator, a copper smelter, an electrical power plant, three sulfuric acid plants, an electrolytic This former industrial site consisted of a copper concentrator, a copper smelter, an electrical power plant, three sulfuric acid plants, an electrolytic A unique feature at the plant site that represents a significant challenge to the closure team are the tailings impoundments. These facilities cover 3,000 acres (1220 ha) and consist of seven different impoundments that are over 6 miles in length, 200 ft. high in places and just up gradient of the San Pedro River. The closure plan calls for these facilities to be contoured, covered with soil, armored and revegetated to minimize long-term erosion and provide for lower long-term maintenance costs. In addition, the reclamation and armoring will enhance the aesthetics of these large facilities. Groundwater down gradient from the site will be monitored by a series of monitoring wells for as many years as required to demonstrate compliance with Aquifer Water Quality Standards under the Aquifer Protection Permit program.

Additional demolition, environmental, and other support activities have been undertaken by SRK Consulting, Brandenburg Industrial Service Co., Western Power Service and Construction Company, Inc., Southwest Hazards Company, TB Contractors, and Ashton Contractors and Engineers. Closure work at the site is being supervised by a staff of contract managers, safety supervisors, and BHP Copper personnel. Community Advisory Group Throughout the process of closure BHP Copper Inc. has embraced the BHPB HSEC Policy which states in part, wherever we operate we will: Communicate with, and engage contractors, business partners, suppliers, customers and communities to:

Build relationships based on honesty, openness, mutual trust and involvement

Share responsibility for meeting the requirements of this policy

Nowhere is this commitment to the values of HSEC Policy more apparent then in the dedicated group of stakeholders who meet every six weeks, take a tour of the site, discuss issues, or express concerns. This group was formed in April 2002, shortly after the closure announcement and originally was comprised of 16 members of the Tri- Community (San Manuel, Mammoth and Oracle). Today that number has grown to nearly 120 members. This group of stakeholders has become an integral part of the closure team and has been able to measure our accomplishments and provide valuable feedback to the closure team.

Closure of the San Manuel Mine and Plant sites are the largest undertaken in the state of Arizona..ever. When the projects are completed in late 2007 all of the disturbed areas of the properties, excluding the open pit, will have been recontoured to blend with the existing native topography. All of the recontoured areas will then be planted with native seed mix in conjunction with our Mined Land Reclamation Plan. Finally, with a little help from Mother Nature, some time and minor maintenance these sites which generated billions of pounds of copper and thousands of jobs will be ready for whatever the future holds. We will keep you posted.

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