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November 25, 2008
PRESCOTT - When global mining giant Freeport-McMoRan Copper and Gold Inc. announced a week ago that it laid off 66 employees at its Bagdad operation because of a severe drop in copper prices, it sent shockwaves throughout the tiny mining community.
"Everyone is getting scared and worried about more layoffs," Christy Garcia, owner of G4 Variety Store, said. "Everyone at the mine pretty much knows everyone else."
Garcia grew up in Bagdad and graduated from its high school. Her husband was born and raised in Bagdad. He, like her father, works for the mine company.
Before the job cuts, Phoenix-based Freeport-McMoRan employed 1,036 workers in Bagdad, communications director Richard Peterson said.
The company planned to expand its operation at Bagdad and most of the laid-off employees were hired for the expansion, Peterson said by telephone from New Mexico.
"The world economy is struggling and we are responding to this downturn," he said.
Bagdad, whose population is 1,578, according to the 2000 U. S. Census, lies about 60 miles west of Prescott at the end of State Route 96. Discontinued telephone poles sporting glass insulators parallel SR 96. When it enters downtown Bagdad, SR 96 becomes Main Street.
Travelers drive Main Street through Bagdad's one-block business district until it ends at Bagdad Operations Security Gate 2. Gate 2 is one of two entrances to the open-pit mine.
In 1882, miners started underground mining at Bagdad, and started open-pit mining in the late 1940s. In 2007, Freeport-McMoRan bought Phelps Dodge and acquired the open-pit mine along with the rest of Phelps Dodge.
Bagdad is one of the few true mining towns that still exist. Point to any home, building or business and Freeport-McMoRan likely owns it or the ground it sits on.
"They own everything, including our houses," Sarina Bohr said. Bohr, 19, works at S&G Convenience Store. "My sister got laid off and they gave her until the middle of January to leave. Most of the others have 30 days to leave."
According to an informational booklet published by Freeport-McMoRan, in 2007 the Bagdad operation directly and indirectly injected $136.7 million into Yavapai County's economy. From its other Arizona mines at Morenci, Sierrita, Safford and Miami, the company put more than $6 billion into the state.
Freeport-McMoRan laid off workers at most of its other Arizona operations including 402 employees out of 4,088 at Morenci, Peterson said.
"Copper was $3.98 a pound in June, and now it is $1.60," he said. "We are responding to this downturn by deferring and eliminating capital projects and exploration."
Not all of Bagdad's laid-off workers worked at the mine. Some were construction workers and contractors hired for the mine's now-delayed expansion.
That expansion included a new neighborhood of company homes, sitting in various stages of completion along North Lindahl Road.
"My business is down half since the layoffs," Kelli Bogart, owner of Ocotillo's Baja Grill, said. Her husband retired after working the mine for 30 years. "I am going to have to cut my work force by 50 percent."
Garcia, the variety store owner, is advertising a 50 percent sale.
"Business has really dropped off since the layoffs," she said.
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