Capitol Media Services

 PHOENIX — Some state legislators and local officials are urging a federal bankruptcy court to reject efforts by Grupo Mexico to reacquire Tucson-based Asarco.

 At a press conference Monday, Reps. Pete Rios, D-Dudleyville, and Barbara McGuire, D-Kearny, said the best interests of the state would be served by having India-based Sterlite Industries own the company. They were joined by supervisors from Gila and Pinal counties as well as the mayor of Hayden, all of whom complained about the practices of Asarco under Grupo Mexico’s ownership, including failing to pay its taxes.

 Instead they threw their support behind the acquisition bid of Sterlite Industries Ltd., a subsidiary of India-based Vedanta Resources PLC.

 Rios acknowledged that Vedanta is a relative unknown, with the effort to obtain Asarco its first U.S. venture. But Rios said he does know something about Grupo Mexico, saying that company’s operation and its failure to pay taxes forced him to introduce legislation more than a decade ago to restructure the school district’s debt.

 “I clearly know Grupo Mexico,’’ he said of the company that bought Asarco in 1999.

 “I don’t want them back in the community,’’ Rios continued. “I would rather take my chances with an unknown commodity.’’

 The Sterlite offer to take Asarco out of bankruptcy also has gained the backing of the United Steelworkers Union. Manny Armenta, the union’s sub-district director, said Sterlite officials have already agreed to a contract running through 2013, with a promise to renegotiate by the end of 2010.

 Armenta said that deal includes “interest arbitration,’’ meaning that a neutral third party decides between the last offer of each side and decides which is more reasonable. He said that avoids the chances of a strike.

 The position of the state and local officials as well as the union puts them at odds with U.S. Reps. Gabrielle Giffords and Raul Grijalva, both Tucson Democrats.

 In a letter last month to the Department of Justice, the pair said they believe that Vedanta does not have a good record “as  responsible employer and environmental steward.’’ C.V. Krishnan, Vedanta’s director of business development, said one incident cited by the pair — contamination of water supplies near mines — was the result of inheriting a 35-year-old plant from another company. Krishnan said an allegation of improper disposal of toxic was “clearly misinformation’’ and denied an knowledge of a claim of failing to provide protective gear to mine worker.

 At stake is who will operate Asarco which has three mines and  smelter in Arizona.

 The company, which refines more than 500 million pounds of copper annually, filed for protection from creditors in 2005. Earlier this year Sterlite made a $2.6 billion bid to buy Asarco’s assets.

 Since that time, Grupo Mexico, which had at one time owned Asarco, has said it wants the company back. And the bankruptcy judge has authorized the Mexico City-based company to make a competing bid.

 It is the possibility of reacquisition by Grupo Mexico that led to the opposition from the state and local elected officials Gila County Supervisor Shirley Dawson said Grupo Mexico essentially forced a strike by employees by refusing to negotiate with unions in good faith.

 “I have met with the people from Sterlite,’’ she said. “I fee confident that they will be an excellent partner in our communities in providing for good jobs.’’ Giffords spokesman C.J. Karamargin said that letter from her and Grijalva was prompted by concerns originally expressed by member of the U.S. House Judiciary Committee about Vedanta’ environmental record.

 That stems from the fact that the Department of Justice is a creditor in Asarco’s bankruptcy as a result of environmental cleanup costs.

 Committee Chairman John Conyers said any buyer would absorb not only Asarco’s assets in Arizona and Texas but certain liabilities. Conyers, along with the ranking Republican on the panel, said they wanted the Department of Justice to check the environmental record of any buyer.

 The letter to the Justice Department from the two members of the Arizona delegation was along the same lines, saying Vedanta “has established an operating record in India and Africa that does no bode will for responsible stewardship of assets in the Unite States.’’

 “Given Asarco’s existing legacy of environmental degradation, it should be a priority to ensure that its assets pass into th hands of a responsible corporate citizen,’’ the letter from Giffords and Grijalva states.

 Representatives of Grupo Mexico did not return a call seeking comment.