Kennecott teaches survival: taking important risks.

AuthorBrowning-Hess, Teresa
PositionA profile of Kennecott Corp., a Utah copper mining company - Company profile

KENNECOTT TEACHES SURVIVAL

Kennecott Corp. has come to symbolize industry in Utah. Its crown jewel, the Bingham Canyon Mine, is the largest open-pit copper mine in the world. And in weathering the ups and downs of the mining industry, the company has emerged as a competitive leader emulated by diverse businesses worldwide.

Global Competition

One of the largest and oldest mining companies in the United States, Kennecott produces more than 15 percent of this country's copper supply and 3.5 percent of the world's mine output of the ubiquitous metal. Kennecott's major foreign competitors in the copper market include mines in Chile (it has the highest-grade copper), Peru, Zambia, and Zaire.

Copper, the great conductor of electricity, is used in our homes, automobiles, communications equipment, and many other aspects of our daily lives, including the penny. The majority of Kennecott's Bingham Canyon copper is sold to U.S. businesses for building-wire, telecommunications, and automotive applications.

Kennecott's roots extent to 1906, when Daniel Jackling set out to show the mining industry how to make a profit mining low-grade ore with large-scale production. Jackling started the process that converted what was once a mountain of rock on the eastern slopes of the Oquirrhs into one of the largest excavations on earth.

In the 85 years since large-scale mining began, Bingham Canyon has produced 13 million tons of copper - more than any single mine in history - as well as 16 million ounces of gold and 1.7 billion tons of ore. Its importance as an industrial icon has earned the mine a designation from the United States Department of the Interior as a National Historic Landmark.

Overcoming Tough Times

The cost of production is a key factor in staying competitive in the global copper market. In little more than a decade, Kennecott's Utah copper operations have undergone major changes to become one of the most competitive and productive producers in the world. The process has often been painful - the company has shaved its workforce from 7,200 in the early 1980s to a current 2,500, and the Bingham Canyon Mine was forced to shut down for a brief period in 1985. Kennecott has emerged as a case study in successful cost reduction.

President and chief executive officer Frank Joklik took the helm at Kennecott 11 years ago and has been instrumental in propelling the company through its most momentous changes. In 1980, when copper prices were down and the market...

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