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John Hollenhorst ReportingAn unprecedented boom in drilling and mining has reached proportions in Utah that's being called astonishing; we can largely thank China for it. Nowhere is the boom more welcome than at the Kennecott mine in Salt Lake County.
Rick Allis, State Geologist: "That's now the richest mine in US history."
Demand for raw materials in Asia has pushed prices sky high and Utah is on the gravy train, as long as it lasts. It's almost certainly the biggest boom ever for Utah's natural resources. The biggest winner is Kennecott, where profits are going through the roof. Unlike most high points in the boom-and-bust cycle, this boom may have legs.
The huge open-pit has turned into a gigantic cash-cow. Last year Kennecott made over a billion dolars in profits, more than double the previous record. And this year profits will nearly double again, approaching $2 billion. All this for a company that was down in the dumps, suffering from low copper prices just three years ago.
Bill Champion, President & C.E.O., Kennecott Utah Copper: "The sky looks to be a little bluer in the future than it has been for quite a long time."
If CEO Bill Champion's tone is subdued, it's because over the years the mining industry has taught hard lessons to optimists.
Bill Champion: "We've certainly seen from a historic perceptive, many times when the prices have in fact collapsed. And you always want to be guarded against that."
In a presentation on Utah's mineral boom, the state geologist suggests that optimism may be on solid ground, though. The boom is across the board. Copper, coal, oil and gas, other metals are all suddenly generating big revenues in Utah.
Rick Allis, State Geologist: "Probably about seven-billion dollars for this year, and that's far above what we've had looking back, even 50 years."
The boom is largely fueled by phenomenal growth in India and, especially, China.
Rick Allis: "They have a voracious appetite for commodities and they've soaked up whatever inventories we've had around the world."
Chances are, he says, Utah's demand-driven boom could have staying power.
Rick Allis: "Unless we have a global meltdown with the economy, the pressure's going to be there to keep the prices up, and Utah is relatively resource rich."
Kennecott does expect copper prices to drop back, at least a little bit, but the rosy picture that exists today makes it less likely they'll have to shut down the richest mine in US history anytime soon.
