Garnet mine in Otero County yet to take off

April 24, 2017 GMT

A Santa Fe businessman raised hopes and expectations when he announced in 2013 that he would develop the country’s largest garnet mine in Otero County.

The project in the Orogrande region was to create 47 on-site jobs with an average wage of $58,000. The mine and related economic impacts were to bring $160 million to Otero County and Alamogordo over 10 years.

The mine was originally scheduled to open in 2016. But today there is no mine, no processing plant and no additional jobs.

Otero County commissioners in 2015 voted to authorize industrial revenue bonds to support the mining business. The bonds were never sold, so taxpayers have not lost a penny on the mining plan. But some people are wondering why, after all the fanfare, the business has stalled.

The city of Alamogordo was to be the fiscal agent for a $750,000 state Economic Development Department grant to help pay for the plant that would crush and process rocks that contain garnet. City officials in January voted to return that money to the state.

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“The company pulled out. I’m not really sure why,” said Alamogordo Mayor Richard Boss. “As far as we know, they abandoned the project.”

Santa Fe resident Daniel Burrell, who incorporated Burrell Western Resources to launch the project, acknowledges there has not been enough communication with Otero County leaders. He said Friday that the project has not been abandoned, but market issues related to the price of garnet forced a delay.

“We’ve made a very substantial investment in the project thus far,” he said. “We’re moving slower than anticipated because we think that’s the appropriate thing to do.”

He said once employees are hired and the mine opens, it has to operate constantly. With a slowdown in the oil and gas industry, a major consumer of garnet, both demand and prices have dropped.

High-quality garnet is used in pendants and jewelry, but industrial garnet, most of which is imported from China and India, is needed in cleaning and polishing operations as well as sanding and cutting. It is cleaner and safer than using sand or silica, but also more expensive.

Burrell said once his partners decided to delay the plant, returning the state Local Economic Development grant money was the responsible decision because the state faces a cash crunch and the money could be reallocated to other projects.

“Due to a significant decline in prices for garnet, we felt the responsible thing to do was to slow the project down. We did the right thing by the taxpayers by returning the money early,” he said.

Burrell came to Santa Fe as an investor in a commercial real estate firm, eventually infusing Rosemont Real Estate with millions from investment partners and then arranging a partnership with global firm in Singapore. The company Gemini Rosemont still has an office in Santa Fe.

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Burrell and his family trust were also the primary investors in a for-profit medical school in Las Cruces. The Burrell College of Osteopathic Medicine has greeted its first class of 160 students, many of whom will be in residency and internship programs throughout Southern New Mexico.

In previous interviews, Burrell said the logistics of the mining operation proved to be more of a challenge than anticipated. The garnet resources are in a remote area and have to be transported to a crushing facility. If processed in Orogrande, the project needs its own water supply and his company had to purchase a large ranch to obtain the water rights.

Otero County Commissioner Janet White was one who raised questions when Burrell sought approval for the industrial revenue bonds, which would be sold by the government but repaid with revenue from the garnet operations.

“I think what we should be doing is maintaining roads, providing law enforcement, fire services and balancing the budget. If we set those as priorities, then businesses will come and they will be sustainable businesses where we don’t have to choose winners and losers,” she said in 2015.

After she learned that Alamogordo returned the state grant money, White was among those who asked for an update on the mine. That briefing was scheduled for the April 13 meeting of the Otero County commissioners.

White declined to discuss the meeting, saying minutes are the official record of the proceeding. Those were not yet available as of press time. An Alamogordo newspaper account of the meeting, however, stated that the attorney who handled the bond resolution was present, but no one from Burrell’s firm.

Burrell said he plans in the coming month to update public officials in the communities about the mine.

“I am going to be reaching out to any number of folks to ensure the communication is appropriate, that we have not abandoned the project in any way,” he said.

Contact Bruce Krasnow at brucek@sfnewmexican.com.