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Category: Undeniably Right Undeniably Right
Published: 25 February 2019 25 February 2019

The opinion piece posted by a more progressive member of our local community highlights once again their inability to connect reality with their pipe dreams and/or a significant lack of understanding of business. I have a view and observations and thoughts about the opinion that Freeport has plenty of cash and doesn't need to transfer responsibility for reclamation to anyone else.

Yes, at the moment FMI has lots of cash. History tells us that any company but especially mining companies can deplete cash reserves quickly. A downturn in the market, an adverse civil court ruling, so many things can lead to the loss of those cash reserves.

Mining companies can go out of business quickly, especially if assets are depleted. No matter the legal responsibility, if the company has little or no assets, they can't pay for reclamation. Purchasing a security bond guarantees that money will be available to finance the reclamation.

Transference of financial responsibility is not a way to get out of paying for reclamation; it's just the opposite and also it reduces costs in the long run for the company, making it more viable to not only stay in business but to engage in the business of mining at all.

Requiring significant cash reserves limits the number of companies that are able and willing to engage in mining. That also limits potential buyers of the mines if FMI decides to sell. What company is going to want to tie up that much cash or many may not have that much cash on hand. Requiring them to have cash on hand in large amounts reduces the potential buyers and thus reduces the value of the asset.

Having to tie up that much cash reduces the company's ability to invest in expansion, new technology, more employees; in other words to create positive economic activity.

At any time, the powers that be can increase the amount of cash that must be kept on hand. That creates unpredictability which any business hates; being able to plan with some amount of predictability or stability makes it more likely a company will engage in or stay in any endeavor.

We as individuals use transference of financial responsibility every day; insurance. Can you imagine if you were required to keep $100,000 or $300,000 cash in reserve in order to pay for damages to someone else if you caused an auto accident? Even if you did have a job that allowed you to save that much money, that would reduce your ability to pay off debt, take a vacation, start a business... you get the idea.

We all know that the progressives want to shut down mining completely, somehow believing that their other goals, such as renewable energy, which relies heavily upon mining of copper and other metals, can be accomplished through recycling of existing refined metals. If that were true, mining would not be a viable business venture right now. If recycling could meet current demand at an economical price, it would be a bigger business and mining would be in decline.

Yes, we can diversify our local economy to reduce dependence upon mining. Tourism is the most often mentioned industry that should be expanded. What do we have to offer? The Gila? Yes, but access to those lands are being more & more restricted reducing the opportunities for tourism. Tourism jobs on average pay less than mining jobs. If mining goes away, many of the restaurants, hotels, and other businesses in our county would close, returning us to a downtown with lots of empty buildings. Shutting down mining without a working alternative already in place is moronic.

It has been great to see the community come together is such a strong fashion to make our voices heard. We need to keep it up, especially with our 'local' representatives who seem to be going along with the party line and the Soros/Bloomberg money rather than truly representing our interests.