Zona Politics Eps.44 from Zona Politics with Jim Nintzel on Vimeo.

On this week's episode of Zona Politics with Jim Nintzel: Investigative journalist John Dougherty talks about the latest with the Rosemont Mine project and discuss his new film about Rosemont's parent company, Hubby Minerals. Then Peggy Johnson and Jeff Yanc from the Loft Cinema stop by to preview the Loft Film Fest, coming up Oct. 21-25. Watch online here or catch the show at 8 a.m. Sunday on the CW Tucson, Channel 8 on Cox and Comcast and Channel 58 on DirecTV, Dish and broadcast. The show also airs on KXCI, 91.3 FM, at 5 p.m. Sunday.

Here's a transcript of the show:

Hello everyone. I'm Tucson Weekly senior writer Jim Nintzel, and we're here to talk Zona Politics Today, we're talking with award-winning reporter John Dougherty of Investigative Media, a project of the nonprofit Arizona Center for Investigative Journalism. John, thanks for coming down and joining us.

(Dougherty) Jim, a pleasure to be to be here.

(Nintzel) Let's start off with some full disclosure. Your nonprofit organization, The Arizona Center for Investigative Journalism, is a fiscal sponsor of my nonprofit, the Arizona Watchdog Alliance, which produces this program, and your investigation of Rosemont Copper has been financed by the Farmers' Investment Company, which is an opponent of the Rosemont Mine.

(Dougherty off camera) That's correct.

(Nintzel) Let's start out with talking about what this Rosemont Mine actually is, for viewers who are unfamiliar with the details of this plan.

(Dougherty) Well, the Rosemont Mine would be constructed about 30 miles south southeast of Tucson in the Santa Rita Mountains. The mine pit itself is going to be an open pit, about a mile in diameter, about a half -mile deep. And the talings and waste rock from the mining operation will be dumped on about three thousand acres of Coronado National Forest. And those talings and rock piles will be six to 700 feet high, and the Game and Fish Department has said it would basically render the northern section of the Santa Rita mountains useless for wildlife and recreational purposes

(Nintzel) And the Rosemont Mine is now owned by HudBay, which is a Canadian mining company that purchased the property and project from another Canadian company Augusta about a year ago.

(Dougherty) That's right. HudBay Minerals is based in Toronto Canada It's a mid-tier copper producer, about the 25th largest copper producer in the world. They've been doing their operations in Northern Manitoba for about 80 to 90 years and they were primarily based up in that area of the world. In the last couple of years they've opened an open-pit mine called Constancia in a small town named Uchuccarco in Peru, so they're now branching out their operations from Canada, and the third leg of their expansion is that they're planning to open the Rosemont Mine here.

(Nintzel) And there were a lot of rumors when Augusta owned the property that they were not actually, did not have the financial wherewithal to continue with this project and were setting it up with the intention of flipping it, and HudBay did come in and do, initially, a hostile takeover, and then Augusta agreed to a takeover once the price of it rose a little bit. So it looks like critics of Rosemont, or Augusta in that case, were correct. This is not a company that was going to go forward with the project.

(Dougherty) That's correct. Augusta Resources is based in Vancouver, B.C., and is considered a junior mining company, and what the juniors typically do is do the scouting and some of the pre-permitting operations on mine sites, and if it looks like the mine site has potential to be developed, a major, or, in this case, a medium-sized copper producer, like HudBay who has been doing mining for 90 years will typically step in and acquire that company. HudBay had a major investment in Augusta for many years. So it was no surprise that HudBay was going to end up with this project.

(Nintzel) And you mentioned that the project needs the forest service land to put the talings on so they need to get approval for this mine through some state and federal regulators, and the big hold-up on the federal level seems to be what's called the 404 Permit that comes from the EPA and the Army Corps of Engineers What is this 404 Permit all about and what's the hold up? from what you've heard in terms them getting it.

(Dougherty) Well, when you mine on public lands it becomes a very complicated issue, and they are in this case, if it's Forest Service land, they become the lead permitting agency. And they have to issue what's known as a Record of Decision. It's not essentially a permit, but it basically says all the other steps have been put in place and it's okay to mine. The Forest Service has issued a draft Record of Decision saying "We approve the mine." They did that in December 2013, and they haven't advanced any farther. There are two main reasons why. One is that there are so many endangered species there, about a dozen of them, including the nation's only known jaguar, that the Forest Service is in consultation with the U.S. Fish and Wildlife Service to develop what's called a Biological Opinion. And once that Biological Opinion is released, there will be a determination whether the mine will threaten or really endanger the survival of endangered species. That could stop the project in its tracks, if they determine that. If they don't determine, we can anticipate there will be litigation. Now the other key permit that's hanging out right now is the Section 404 Clean Water Act Permit. That's issued by the U.S. Army Corps of Engineers. The Army Corps of Engineers was very, very critical of the plan that Augusta had forwarded a couple of years ago, and they made it pretty clear to Augusta that they didn't think there was sufficient mitigation to the damage that this mine would do to water resources. And HudBay took over the project in July of 2014 We have not seen what HudBay's new mitigation plan is, or if there are any changes to what Augusta had produced, and my understanding is that there's very little if any significant change to the plan that Augusta advanced. So it's a really ….

(Nintzel) Changes from the Augusta plan.

(Dougherty) Yes, yes. It doesn't look like HudBay's changed the mitigation plan significantly from what Augusta advanced. So the Army Corps of Engineers is expected to make a decision sometime in the next six to eight months. If they don't make a decision going into the presidential election, there's a lot of speculation that this will get kicked in until after the presidential election next year. So, you know, that permit is hanging in the balance and as probably the most essential permit that's outstanding. There's another permit that Augusta or HudBay has refused to publicly acknowledge has been reversed, and that was in February of this year Maricopa County Superior Court overturned their air quality permit that the Arizona Department of Environmental Quality had issued. They have to have that air permit to construct the mine. So, they don't have the air permit right now, and without the air permit, there's no mine, and so that permit is now under appeal in the Court of Appeals and you know, we'll have to see what the court process does.

(Nintzel) Let's go back to the mitigation process and when we talk about mitigation for a project like this, what are we talking about? Setting aside other areas, other land to not develop?

(Dougherty) Yes. Not so much their land, but adjacent land. Under the Clean Water Act, if you destroy wetlands or seeps or springs or certain water courses for a mining project, you have to compensate one to one for the amount of area that's been damaged by your project, and where they're having significant problems here is finding additional areas of wetlands in this part of the country that they can provide as compensation for the destruction that they're going to do at the Santa Ritas. And it comes down to can they find the land that is suitable for mitigation HudBay, I'm sure, says, "Yes, We can, and we will be able to present this and it will be adequate." The opponents say, It's impossible to mitigate Once you destroy this area that sits in the headwaters of of Cienega Creek, in Empire Gulch and Davidson Canyon, it's going to have lasting and permanent impacts that are not mitigatable The Army Corps has rarely said "no" on 404 permits but they can, and the wild card in this is one more Federal Agency, the United States Environmental Protection Agency. The EPA has veto authority over the Army Corps permits and, again, the EPA's been reluctant to use that power in the past. Maybe half, maybe a dozen times in the last 20 years, but EPA has repeatedly told the Army Corps of Engineers, "This is a bad project. The damage it would do to fish and wildlife and waterways in Southern Arizona is irreversible, and we recommend that you not issue that permit.” So there's some major bureaucratic and regulatory issues that still need to be resolved before this mine is going to go forward.

(Nintzel) And I've spoken to representatives of HudBay, and they say they did expand the mitigation area with their new permit process. We of course haven't seen that, the actual documents, but what they expressed some surprise that it was taking as long as it is to get a decision one way or the other. Are you surprised that this has gone on as long as it has?

(Dougherty) I'm not surprised because I think the Army Corps wants to work in conjunction on the same time frame as the Forest Service. And the Forest Service can't make any kind of decision until they finish the biological opinion and the Endangered Species Act. Issues like impact, consultations with Fish and Wildlife, so it's kind of a jam up here at the intersection, and it's all going to come up unloose here, probably in the spring.

(Nintzel) And you mentioned the endangered species issues with the jaguar and other endangered species down there. That's a pretty significant wrinkle for them to untangle.

(Dougherty) That is a significant issue. Not only with the jaguar, the only one we have in the United States that we know of. There are also ocelots there, and there are also some fish and frogs, particularly these fish that are nowhere else. And so if you destroy the wild water sources for these fish, that'll endanger ... you could be putting those fish into jeopardy and it's a jeopardy opinion that's important as far as the decision-making by the Fish and Wildlife Service. That could stop the mine. So, literally, some fish this big could stop the mine. So we'll have to see how this all plays out.

(Nintzel) And you mentioned the air-quality permit that the state issued. That was something Pima County had declined to issue, and the state stepped in and issued the permit. There's a lawsuit, and so far the courts have said that the permit is no good. They have to re-submit their application.

(Dougherty) That's right. Pima County was not going to issue the air permit, and ADEQ came in and took it away from them. There was quite a controversy a few years ago, and two different lawsuits were filed against the state of ... Arizona Department of Environmental Quality. And in Maricopa County Superior Court judge ruled that they had ignored their own rules essentially when they had issued the permit, you know, that was an arbitrary and capricious decision. Essentially, that reversed the permit, so they don't have the air permit, and there are some serious questions whether they could get the air permit if they use the correct data the correct modeling data to project how much air pollution will be generated from this operation.

(Nintzel) And no matter which way this goes at the federal level, you mentioned earlier litigation that's probably going to court if they rule against the mine, HudBay will sue, and if they rule for the mine, the mine's opponents will sue, and this will probably be tied up in court for awhile, even once the permits are completed

(Dougherty) Exactly. There's no question that there are three primary areas where I think litigation is very likely from the opponents' viewpoint. One is under the National Environmental Policy Act, which is basically the procedure the Forest Service has used to develop the Environmental Impact Statement and other issues. There are all sorts of questions of whether they followed NEPA, you know, the rules exactly, possible litigation there. I would say if the Fish and Wildlife Service and the Forest Service say "There's not going to be any serious impact to endangered species,” you can ... I can almost guarantee there will be litigation there. And if the 404 permit is issued, there's going to be litigation there. So this thing's heading into litigation, at least from the opponents' viewpoint, and I imagine the same thing from the proponents, HudBay. If it goes against them, I would imagine they would litigate as well

(Nintzel) Right. The price of copper has been dropping significantly. The Chinese economic slowdown probably plays a big role in that. Do you think that has an impact in moving forward? The Rosemont officials say the current price isn't so much the issue. They're looking at a larger window—20 years of operating this mine — and they assume it's going to go back up.

(Doughterty) Sure. I think that clearly has an impact on the ... the long-term copper price is the decision point that a copper producer is going to be looking at. However HudBay as I mentioned earlier, is a medium-sized copper producer. They are not full of a lot of cash, and they have projected that they were going to construct the Rosemont mind from proceeds from their new mine in Peru. Well, with copper trading at $2 $2.20. $2.30 a pound, their cash flow out of Peru is nowhere near what they were projecting, and analysts are also raising serious concerns of whether HudBay's even going to be able to cover the debt that they have due from the construction in Peru. They have a billion dollars in debt coming due in 2020, so they're looking at a big note that's coming due. The price of copper is much lower than projected. The cash flow coming out of Costancia is not what they expected, and the costs that of the Rosemont mine have gone up considerably since this project was first proposed. Several years ago, it was about $900 million. Now we're talking about $1.2 billion. That's what the projection was a couple years ago, and now Garofalo, from HudBay, the chairman, or the chief executive officer is saying $1.5 billion. So there's a lot of money that's going to be needed to build this mine, and that's occurring at a time when the surplus capacity in the mining industry, as we know in Southern Arizona mining booms and busts and recedes and comes and goes, and we've just gone through a major wave of layoffs at ASARCO and also Freeport, so there's a lot of capability of bringing more copper online quickly.

(Nintzel) And the Resolution Mine, as well, is supposed to be very copper rich

(Dougherty) Oh, the Resolution mine, the proposed mine in Superior, is massive. It's much bigger than this mine. Much, much bigger. So, you know, projecting what copper prices are going to be in five years is very very difficult art.

(Nintzel) One of the reasons we wanted to have you on this week is you've made a film about HudBay that is debuting at the Loft on Sunday, October 18: "Flin Flon Flim Flam" What is this film all about? You ... travelled down to Peru to see their mining operations down there?

(Dougherty) Yes. The film is focusing on HudBay's worldwide operations and their historic performance of their operations in Canada. So I travelled to Manitoba last summer and spent several weeks in Flin Flon, met with a lot of local people government officials. I asked to meet with HudBay. They didn't want to meet, but the operation in Flin Flon is very significant because this is how they've performed for 85 years and the basic bottom line is that, they poisoned that community. They operated a copper smelter that was notorious in Canada for being a very highly toxic, single-source emission, and it left the area a mess. I also went down to Guatemala. HudBay briefly had an investment in Guatemala for about three years and during the period of time they were operating down there, there were some clashes with the local Mayan Q'eqchi' population in which people were shot. At least one person was killed, another person paralyzed. There are also allegations that the previous company in Guatemala that HudBay acquired had been involved in some gang rapes, and HudBay is now facing a significant civil trial in Toronto where all three of these cases, the gang rapes, a murder and a shooting are pending in Superior, the whatever their Superior Court equivalent is in Toronto.

(Nintzel) So this is all stuff you dig into in this film.

(Dougherty) Yes. And then I went down to Peru as well, where the open pit mine, the Constancia mine, and there's a lot of social unrest there, as well, where the local population, many of them believe that HudBay has not abided by agreements that they had made with the community, and so I interviewed folks down there and witnessed some demonstrations and other things like that.

(Nintzel) So, coming up Sunday, October 18 at the Loft next Sunday. John, thank you so much for coming and joining us. That's all the time we're going to have. We will be right back with Peggy Johnson and Jeff Yanc from the Loft to talk about the upcoming Loft Film Fest.

And we're back with Peggy Johnson, the executive director of The Loft Cinema Foundation, which is presenting the 6th Annual Loft Film Fest, beginning Oct. 21, and Jeff Yanc the programming director at the Loft to talk about this great film festival the programming director at the Loft to talk about this great film festival Peggy, I know you have nearly four dozen films at this thing and it's like picking between your children, but what are you most excited about?

(Johnson) Well, I'm very excited about having Rita Moreno at the Loft. That's just like, incredible to me, and all of our tribute guests Alfonso Arau, Larry McMurtry and Diana Ossana, having Bobcat Goldthwait back, some of the films I'm really excited about, Janis, a Janis Joplin documentary I got a chance to see it when I was at Venice, and it's so stunning, and it is, it's like picking a favorite child, and I'm not going to do it, but those are just some highlights.

(Nintzel) And Rita Moreno is coming. You're going to have a showing of West Side Story, and of course she is one of the legendary winners of the EGOT and now she's getting a Lofty to add to that list.

(Johnson) Yes. She'll have more trophies for her shelf when she leaves Tucson.

(Nintzel) And why was she the pick this year?

(Johnson) You know it just happened to all come together, and we just thought she'd be so perfect because she's being honored at the Kennedy Center in December. She's been getting awards all year, and she represents so much of what this community is all about, and we just think it's fabulous. She's amazing.

(Nintzel) And Jeffrey, we're kicking this whole thing off on International Back to the Future Day on October 21 What is International Back to the Future Day?

(Yanc) International Back to the future day is a big day for fans of Back to the Future because October 21, 2015, is the date that Marty McFly and Doc travel to in the future in Back to the Future, Part 2 So people have been waiting for 30 years to celebrate this day, and so we're going to do it, and it seemed like the appropriate way to kick off the Loft Film Fest, looking to the future of the festival and it's going to be great. We're going to have a DeLorean there. We're going to have some

(Nintzel) Not the DeLorean but a DeLorean.

(Yanc) Unfortunately "the" DeLorean is otherwise engaged that night. There are actually celebrations going on all over the world, and I think that's being used at Universal Studios. That's what I hear.

(Nintzel) But the one you have will have a flux capacitor?

(Yanc) Naturally. And a working flux capacitor, yes. And we'll have some … we're going to do an Enchantment Under the Sea dance as an homage to the first Back to the Future film. We'll have some '50s music….

(Johnson) Buffalo Exchange is going to be there with fashions from all the different eras. But we are in the future, now, officially. Or we will be after this week.

(Nintzel) As a double feature of Back to the Future and Back to the Future 2.

(Yanc) We thought that was appropriate. You have to show Part 2, because that is the crux of the whole International Back to the Future Day, so ....

(Nintzel) Peggy, you've also got Larry McMurtry and Diana Ossana, coming up for a tenth anniversary screening of Brokeback Mountain. And that was one of your top films in modern Loft history.

(Johnson) That was the biggest Loft film ever, and it set our box office record. It's still number one by $20 thousand or something. And it was also the film that changed our course from being struggling to being in the black, and we never went into the red again after Brokeback Mountain. So it's an important film for us. Interestingly, it's an important film for so many people. I had no idea that there was this army of extreme Brokeback Mountain fans all over the world, a lot of whom are planning to come to this screening.

(Nintzel) They just can't quit that movie.

(Johnson) They just love it. It's amazing. I loved it!

(Nintzel) And Bobcat Goldthwait, Jeff, is coming for a documentary, Call Me Lucky? What's this all about?

(Yanc) Yes. So Bobcat Golthwait has been at the festival a few times in the past and he's one of our favorite guests, and he has a new documentary out about a fairly unknown but famous to some people stand-up comedian who also became a political activist, and Bobcat is going to be presenting that film. We're going to be presenting Bobcat with our Maverick award because he's really sort of changed the course of his career from being one of the stars of the Police Academy franchise to now being this really amazing filmmaker who goes to Sundance and all over the world and gets awards So we're really excited. He's really just a fun kind of positive presence and he's great to have around, and then the film's great, too.

(Nintzel) And Peggy, you've got a film you mentioned earlier about Janis Joplin.
(Johnson) Right. I, yeah, this film premiered at Venice and I happened to get to see it the first time it showed. And then it was in Toronto, and now it's in London, I believe, and we got to get a preview screening of it, and it's a documentary that Janis Joplin and her brother Michael lives in Tucson and is in the film and of course he and his sister control the rights to Janis's work so they are both interviewed in the film and are involved in the film and Michael will be there to talk about the film afterward and talk about his sister, so it's a, I think it's going to be ... it's a great film.

(Nintzel) And, Jeff, El Guapo is coming for a screening of The Three Amigos.

(Yanc) Yes, we're very, very excited. So Alfonso Arau and of course El Guapo is coming for the screening. He's also receiving a Lofty Lifetime Achievement Award.

(Nintzel) And a sweater and, I think.

(Yanc) And a pinata. So we're showing Like Water for Chocolate, which was a film he directed, which is a huge art-house film and then, of course, we cannot have him here without showing Three Amigos, which we're going to show outside on our brand new outdoor screen. It's going to be a free screening, the Three Amigos screening. And people are very excited about that that particular screening, as am I, as we all are.

(Nintzel) Yeah, I would think so. You've also got a little documentary about Florence, Arizona? Peggy?

(Johnson to Yanc) You can probably talk about that better than I.

(Yanc) Oh, yes. So it’s a documentary by a young filmmaker named Andrew Scott It's called Florence, Arizona and it follows three people in Florence, sort of how they live their lives in the shadow of the prison, and it sort of looks at what goes on in Florence both connected to the prison and not connected to the prison Surprisingly there are a lot of things that are not connected to the prison there And it's a great portrait of a small town sort of living under this shadow.

(Nintzel) I'm also fascinated by this Finders Keepers film about a battle between a man who wants to recover his severed leg and a man who has gained possession of it when he bought the contents of a storage locker.

(Johnson) Truth is stranger than fiction.

(Yanc) This is literally one of the strangest stories I've ever seen in a documentary. And it's a true story a fight for a foot, a legal battle, but also an emotional battle. The owner of the foot wants the foot back. The person who bought it in a barbecue wants to keep it and exploit it.

(Johnson) It's also about reality TV and kind of the crazy things that can happen when you fuel people's egos and things and conflicts by putting them on television and letting them go at each other. So it's sort of that.
(Yanc) Well they actually try and settle it on the Judge Mathis show, which maybe doesn't go exactly as they hoped it would.

(Nintzel) I can't imagine. An outdoor screening of Psycho, as well?

(Yanc) Yes. So we're showing a new documentary called Hitchcock Truffaut about Alfred Hitchock and François Truffaut and so we wanted to show a Hitchcock film, like the most famous one that we could think of, which is, of course, his Psycho, so we were showing that outside, which should be a real scream, I would say, and that's going to be free. And we're also showing a Truffaut film outside, Jules and Jim, to sort of celebrate both filmmakers and their work.

(Nintzel) And so this is going to be Wednesday through Sunday, beginning October 21. $125 gets you to all films, $100 for Loft members $10 for individual films, and you guys do such amazing stuff. Why is this festival important, and in about a minute.

(Johnson) Well, I think film festivals are increasingly important because there are so many films being made, and this is a chance for films to be seen that wouldn't otherwise maybe get seen. And it's a chance for people to concentrate their attention on great cinema over a few days and film festivals I think are increasingly important I think in the film world.

(Yanc) Right, and also I think it's important for us to, you know, we hope that the Loft Film Fest will be a player on the international film festival scene at some point so we're really trying to be sort of a festival of festivals where we're bringing great films from other huge festivals like Venice and Toronto and New York.

(Nintzel) If you can't get to those festivals, you guys are going to bring it here.

(Johnson) We're trying to skim off the cream and bring it to Tucson.

(Nintzel) You guys are doing a great job. I'm so glad that the Loft Film Festival's coming up. I'm really looking forward to this. That's all the time we're going to have. I would like to thank my guests, Peggy Johnson and Jeff Yanc from the Loft Cinema, as well as investigative reporter John Dougherty. If you missed any part of today's episode, you can check us out online at zonapolitics.com, where you'll also find transcripts of this and our past episodes. And be sure to look us up on Facebook. Next week, we'll talk about what's going on with this year's city election. Thanks for watching.