In a case that demonstrates how important local
politics can be to industrial mineral developments, US-based
Burrell Western Resources has finally been approved for a city
tax break to aid the construction of a garnet processing
facility in Oro Grande, New Mexico, after an earlier county
commission board did not approve the plan.
Allowed in mid-April, Burrell Western could have
seen its planned 100,000 tpa garnet facility plans scrapped in
favour of a move to Texas on the basis of a single vote on the
three-member committee board – and because of
philosophical objections.
Garnet is consumed in
small amounts compared to refractory minerals like magnesia and
alumina, with its buyers typically working in specialist
refractory applications. The silicate group mineral is also
used as an abrasive and in high pressure water jet material
cutting equipment by companies like Apple Inc. and other
electronics manufacturers to ensure smooth surface edges on cut
metals and glass.
Commissioner Janet White, who blocked the
proposed garnet plant in the first committee vote in early
April, justified her action to vote against the proposals by
stating that if Burrell Western is to receive a property tax
incentive, all other businesses in the area should have the
same privilege.
"I have heard no opposition to the Burrell garnet
operation as a private enterprise, none whatsoever," White told
local paper Alamgordo Daily News.
"[But] is granting property tax and compensating
tax relief a proper role [of government]? No. In my opinion and
of my constituents, (…) it is not the proper role of
government, not unless the commission is willing to offer this
to all businesses," she said.
"Our first order of business is to reduce taxes
and barriers to business. That’s how you will get
what I call intrinsic sustainable economic development," White
added.
Owing to a small time window for land
procurement, Burrell Western had been worried that it would be
forced to build the plant at a reserve location in Texas. The
project is expected to consist of an open pit mine, which would
require roads, trucks and "light equipment".
Preliminary drilling results suggest that the
indicated garnet resources at Burrell Western’s
project, the location for which remains undisclosed, totals
2.5m tonnes, with an estimated mine life of between 25 and 50
years, and total revenues of $1bn.
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One of the largest user
applications for garnet is as an
abrasive. Fine garnet dust can be mixed into water
jets
to ensure smooth cut edges.
Source: James Sean Dickson,
Flickr
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Reversal of fortunes
At the second committee vote in mid-April, fellow
commissioner Ronny Rardin joined the three board members and
voted in favour of Burrell Western receiving taxable industrial
revenue bonds, which amount to the property tax incentive
mentioned by White.
Rardin apologised to the board for missing the
last meeting, and stated his support for the project, which he
said would create jobs and local revenues and use unoccupied
land.
He said that if the commission does not forge a
deal, they would not be taking advantage of state laws that
local committees can use to encourage developments.
Chamber of Commerce president Mike Espiritu was
reported as saying: "It is ludicrous – [the plant
project] is not costing them [the commissioners and the city]
anything."
Susan Flores, the final board member, had
originally voted for the proposal, but the lack of a second
meant that the proposal could not be carried.
David Buchholtz, an attorney at Rodey Law Firm,
told Alamgordo Daily News that the company
will now need to focus on procedural notices and finish
negotiations with the lieu of taxes.
US garnet industry
Garnet for industrial use is currently produced
by three companies in the US – one based in Idaho and
two based in New York State, according to the US Geological
Survey (USGS), for a total of 193,000 apparent domestically
consumed tonnes.
A substantial proportion of this –
177,000 tonnes – is imported, with just under 90%
coming from Australia (45%) and India (43%).
The total value of mined crude garnet in 2014 was
$5.48m, while refined material sold or used had a total value
of $8.83m, the survey said.
Garnet is found in a wide range of rocks, but it
is generally only mined when additional material found in
association with the mineral – like mica, kyanite and
marble – can also be monetised.
In 2014, world garnet production totalled 1.66m
tonnes, the USGS said.