Mining activity in Arizona and elsewhere is unpredictable, with production sensitively tied to demand and prices.

But the need for equipment, supplies, consulting services and technology all remain in demand through the global market ups and downs, which is why the Tucson area is able to benefit from a thriving mining supply industry.

That concentration got stronger with the recent announcement that Caterpillar, Inc. will relocate its Surface Mining & Technology Division headquarters to central Tucson.

Around 600 jobs, some that will be filled by relocating current Caterpillar employees, will be added to the Tucson workforce over the next five years.

Several government incentives lured Caterpillar to Tucson, including a grant from the state commercial authority’s Arizona Competes Fund, money for relocation costs and Tucson redevelopment funds to buy the land and construct the building that Caterpillar will lease for 25 years.

It’s great that Arizona and Tucson are showing success in putting together the right package of incentives to attract a sizable operation.

But what we at Commercial Real Estate Group of Tucson liked best about the announcement were the other reasons why Caterpillar thought our city is a good spot to run a major division’s operations.

“The ability to get closer to our customers and tightly collaborate across all aspects of the business is the center of our strategy,” says Tom Bluth, Caterpillar vice president responsible for surface mining and technology. “Southern Arizona is a growing region known for a workforce rich in mining, technology and engineering expertise.”

Business Efficiency

Arizona itself is rich with mining activity. It is the top producer of copper and also mines gold, silver, molybdenum, coal, uranium, potash and other valuable minerals. The industry accounts for 11,800 direct mining jobs. That makes several of Caterpillar’s customers very accessible.

More importantly, Tucson and Southern Arizona are positioned within a major logistics and transportation hub that provides easy access to international land, air and sea ports. It’s only 85 miles from the border with Mexico. Caterpillar has several facilities and suppliers in Mexico, which is building its own West Coast seaport that will have easy access to the Nogales, Arizona, port of entry.

This hub, which supports a Southern Arizona-Northern Mexico super-region of commerce and trade, gives Caterpillar easy access to its suppliers and customers around the world.

Caterpillar has been in Arizona for 70 years and employs about 300 in its Southern Arizona facilities. Its state-of-the-art Tucson Proving Ground is one of eight of the company’s flagship research and development centers.

The adjacent Tinaja Hills Demonstration & Learning Center is one of four within the company. It draws hundreds of mining employees to train on Caterpillar products and see how products can suit specific mining operations.

Talented Workforce

Current Caterpillar operations in Tucson rely on a highly talented group of engineers, scientists and technology experts to put new products and technologies through their paces. The new headquarters will add executives, support staff, engineers and product developers.

Tucson’s University of Arizona has several programs that train future mining engineers, scientists, developers and researchers.

•       The Mining and Geological Engineering Program graduates engineers and scientists.
•       Lowell Institute for Mineral Resources advances scientific, technological and education aspects of mineral discovery, extraction and processing.

Tucson fosters a large pool of workers and experts in the mining industry. The Arizona Mining & Industry Get Our Support (AMIGOS) lists more than 250 of its member companies that are located in Southern Arizona, from Caterpillar and other heavy-equipment firms to machinery suppliers, from engineering to construction companies.

It’s this kind of Tucson profile for the mining industry that makes us believe Caterpillar’s relocated division will thrive in Tucson. And we expect that, as long as our government and private economic development agencies can come up with attractive incentives, we’ll see more companies in the future.