OROGRANDE — Driving through this stark landscape south of Alamogordo, it’s easy to miss Orogrande with its one convenience store, post office and a closed-up mining museum.
Still, there are enough relics and beaten-down structures that one can picture the boom years of the 1900s, when men flooded the area, living in tents to seek out gold and turquoise. By 1905, the year after a 6 1/2-ounce gold nugget was discovered in a dry wash, the rush had spawned a railroad, a smelter, a 16-person real estate office, a barbershop, a hotel and nine saloons. “Rich ore poured out of the mines by the trainload,” reads an Otero County history blog.
By the 1940s, the area was largely mined out, and today the Orogrande Trading Post on U.S. 54 is the center of the community for its 50 residents. But when the sun is just right, the mineral left behind by those seeking easy money reflects in the hillsides. And if Santa Fe businessman Daniel Burrell is right, then Orogrande, in New Mexico’s Jarilla Mountains, will soon be known for having the largest reserve of garnet in the United States.
Gemstone-quality garnet is rare and largely found in places such as Madagascar and South Africa. What Orogrande offers is an industrial garnet increasingly needed by manufacturers for cleaning, cutting and air blasting. One of the hardest materials, garnet is cleaner than sand and silica, but 90 percent of the garnet purchased in the United States is imported.
The domestic production of garnet in the U.S. — in New York, Montana and Idaho — now stands at 35,000 tons a year. Within three years, if all goes as planned, the Orogrande mine owned by Burrell Western Resources may be producing 100,000 tons a year.
“In the United States, there is no deposit as significant as this,” said Burrell, a former White House staffer and Democratic campaign adviser who moved to Santa Fe to head Rosemont Realty, a privately held company that owns commercial property in 24 states.
What it means for Burrell is not just a personal business challenge, but jobs and economic development for a rural stretch of the state, 50 miles north of El Paso. He is prepared to invest $25 million of family money in the initial phase of the project, which will bring 50 jobs at first and more later when a processing plant opens in Anthony, N.M. Eventually, the number of jobs might double or triple as the 2.5 million-ton reserve of andradite garnet is mined over the next two decades, injecting $1 billion into the state’s economy.
“It’s such a ridiculous opportunity,” Burrell said during an interview in his Santa Fe home. “Twenty years ago, if you stumbled on this, you’d probably have to pass — there was no market.”
The find is an amazing coincidence of climate and geology, said Peter Harbin, a Las Cruces-based consultant who advises mineral companies and has been working with Burrell. Garnet, he said, is fairly common, but is often eroded and washed away with concentrations too thin to economically extract. And many areas that have the mineral — there are garnet reserves in the San Pedro Mountains of Santa Fe County, for instance — are isolated, meaning transportation and labor costs are very high.
The rocks in the Orogrande mine are 75 percent to 90 percent pure garnet, “one of the highest [concentrations] that I’ve come across in my career,” said Harbin, who has been working in minerals for 30 years. That means that every rock taken will be mostly garnet, so there is less waste. “I wouldn’t say it’s unique, but it’s certainly special,” he said. And the fact that the mineral is within two miles of a major highway and close to the surface makes the project more viable. “It’s at the surface,” he said. “You can go and see and pick out the garnet.”
Burrell admits this is an opportunity that has come his way at the right time — when the manufacturing economy is recovering and demand for clean industrial materials is rising. It also comes when he can afford to leave his job at Rosemont to embark on something less certain, but with different challenges and rewards.
Identifying market opportunities has gotten Burrell where he is today.
Burrell, 35, went to Georgetown University as an undergraduate and gained a White House internship, which led to a domestic policy job in the Clinton administration. He eventually went to Yale Law School and joined U.S. Sen. John Kerry’s presidential campaign.
Burrell left politics after Kerry lost his presidential bid in 2004 and joined a small equity group called Rosemont Capital, which specializes in funding small and midsize companies. Still active in politics, he came to New Mexico for a Diane Denish campaign event and met some of the managers at BGK Properties — and eventually Eddie Gilbert himself, the former New York financier whose life on Wall Street was documented in Boy Wonder of Wall Street, the 2003 book by Richard Wittingham.
A partnership between BGK and Rosemont made sense: Gilbert was looking for an injection of capital to restructure, and Burrell and his partners were looking for some safer real estate assets to ride out the recession. The companies joined into what has become Rosemont Realty, which is still based in Santa Fe at 330 Garfield St.
Since Burrell joined Rosemont in 2009, the assets have doubled in size with 173 office buildings in 24 states and eight regional offices. The company manages 18 million square feet of office space. Then earlier this year, Burrell announced he was stepping aside from the day-to-day management at Rosemont, though he would remain on the board.
He said then he would stay in New Mexico. “It’s a business opportunity here in the state that came about suddenly. It’s not a move that I planned. It’s so unique and unusual that I needed to jump,” he told The New Mexican in September.
He declined to discuss what that move was until now.
The Orogrande mine came Burrell’s way when a member of a Texas family called him asking if Rosemont was interested in its small real estate holdings around the El Paso airport. Rosemont passed on the opportunity, but the family also asked about some old mining claims in Otero County — 2,400 acres that had been in the family dating back to the 1872 mining law, a measure passed by the federal government that gave land to pioneers seeking to expand the nation west.
At the same time, Burrell’s father-in-law, John Jetter, was hearing that the Orogrande mine was looking for investors. Jetter worked in the natural resources sector for Rio Tinto, a multinational mining corporation, and is a retired financial manager at J.P. Morgan.
Minerals seem to run in the family.
Katherine Jetter, Burrell’s wife, is an internationally known gemologist with her own line of opal jewelry. In a January 2013 interview on Japanese television, she tells how she started. “The first time I went out to a mine, I was 22 years old and my father and I drove 10 hours into the outback, and all I had was a little bit of money and a dream,” she said. She visited with the miners, they ate together and then she purchased some of the gemstones to start her collection.
But the coincidences were mounting as Burrell said he kept hearing about Orogrande. So after consulting with John Jetter, Burrell paid for a preliminary evaluation of the land and a survey. When he toured the property, he saw a huge outcrop of garnet that dominated the hillside. That was enough for him to hire a full geological survey team, which has taken core samples and completed more detailed computer mapping.
Burrell formed Burrell Western Resources and purchased the property. He and his father-in-law are the sole investors and are funding the first phase of the business with $25 million, although they might seek outside capital in the future.
Arnand Van Heerden with Tetra Tech Mining & Minerals in Golden, Colo., is the lead geologist on the project. When walking the site in November, Heerden pointed to the limestone and monzonite rocks. The mix, along with some moisture and high temperatures, creates a sponge-like sediment magma that results in garnet. Add a few hundred years of percolation, and Orogrande seems to be the perfect stewpot.
Heerden called it “a perfect storm of events. For something like this, you really have to have it cooked in all directions,” he said. “Why garnet has not been mined here before I cannot tell you.”
Burrell has some idea.
The surface garnet was first seen in the 1990s by a group looking for gold. Then the family that previously owned the land started geological work and core sampling in 2005, but the price of all industrial materials dropped when the financial crisis hit. Burrell said the family probably lacked the investors and funding to move forward. He said getting outside investment for extractive projects is difficult — there is a lot of money needed up front and no real return for several years. So he knew if his efforts were going to move forward, “I had to dedicate all my time to running it.”
Burrell has already spent months at the site, working with geologists, lining up permits for blasting and access, complying with mining and restoration requirements as well as the logistics of getting huge water trucks from Alamogordo to the mine area.
In 2014, the site is expected to start with limited mining of five or six tons that can be taken to a processing plant in Denver. Once there, the rocks will be crushed, with the garnet separated out with magnets. It then has to be washed, bagged and shipped to potential customers.
Because the Orogrande mine is new, the material will have to prove itself before large-scale production can begin. That means getting samples to users so they can test it as it gains certifications from trade groups and the government.
If all goes well, Burrell will have a processing plant in Anthony, 54 miles from Orogrande, up and running in 2015.
Harbin, the Las Cruces-based mining consultant, said the U.S. government might be one potential customer, as it uses garnet to blast and clean military ships and equipment. Oil and gas producers also use the material to clean rust and grit from storage tanks.
Harbin believes the New Mexico garnet is so unique that it can change supply and demand. Many firms, he said, are using sand and silica for these jobs because garnet prices have gone up as India has consolidated the supply. But garnet is an incredibly hard mineral and much cleaner than sand — and it doesn’t have any of the health risks to workers.
So he thinks once the Orogrande product is commercially available, it will actually replace other products.
For instance, because garnet is so hard and clean, it can be mixed with water for a manufacturing process called water-jet cutting. Harbin likened it to firing a laser beam without the heat, so auto parts or clothing fabrics can be finely cut without the need for finishing.
“Unlike a laser, you can get exact shapes, so there is no cleaning after,” Harbin said.
And then there is the reality that many customers are used to buying garnet from India, and may not have heard that New Mexico now has a domestic reserve. “All we have to do is convince a lot of people back East that New Mexico is in the United States,” he said.
Martin Salcido and his wife, Vickki, have lived in Otero County just about their entire lives and recently bought the Orogrande Trading Post, a small convenience store and gas station on U.S. 54. He said the old mining museum that used to offer historical tours closed last year when the proprietor retired. But there are two active mines on BLM land — one copper, one iron.
And there are prospecting clubs that come to the area with students or tourists to demonstrate mining techniques and learn about the history.
When a group came up recently from El Paso with German tourists, they even found a small shard of gold while working an area near an old mine. Most residents living there still have inherited mining claims, but they “don’t do [prospecting] for their main source of income. … They do it as a hobby,” he said.
A new mining project that might bring steady jobs is a big deal for Orogrande and Otero County.
“For us, we’re pretty much the only store around here, so it will definitely help,” Salcido said. “They were talking maybe being here for 20 years, so we’re pretty excited.”
Contact Bruce Krasnow at firstname.lastname@example.org.