Tuesday, September 25, 2018
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Pig perspective

Statements don’t mean much without perspective. US Energy, the company with the rights to the molybdenum under Mt. Emmons, is touting the recent U.S. Forest Service decision to allow detailed analysis of a mining plan as a major move and just about guarantees a mine “sooner rather than later.” That is doubtful, given any sort of rational perspective.
The Forest Service decision says that on its face, the company has provided enough of a plan that the government is obligated to really delve into that plan. The public too will now get the chance to really dig into that proposal and comment on it. If US Energy executives believe that will be a quick process, they are simply foolish. And I don’t think they are foolish.
But I do think they are a bit desperate and trying to exude a patina of inevitability for the mine in an effort to attract a potential partner with deep pockets that might want to take this mine off its hands.
What? Take a valuable mine off its hands? That would be crazy, wouldn’t it? Not so much. Let’s remember a bit of history. Tens if not hundreds of millions of dollars have been spent investigating the realistic potential for a moly mine under Red Lady. Those who have spent those millions have all walked away.
It wasn’t long ago that US Energy had a “real” partner in molybdenum miner Thompson-Creek Metals Company. That company had the know-how, expertise and contacts to perhaps make a run at a mine. After spending a few million dollars, they abruptly backed out of the potential project after doing some on-the-ground research. It wasn’t that long ago that US Energy was in a lawsuit with mining energy giant Phelps-Dodge and the loser essentially had to take the mine. US Energy lost and now has the mine.
The mine comes with an annual expenditure of close to $2 million to run the water treatment plant that treats water coming from the old Keystone mine. That treated water feeds Coal Creek and is consumed by people downstream of the town of Crested Butte. The town of Crested Butte is keeping a close eye on the situation and will be very careful about what it allows in its watershed. US Energy also cites some crazy poll saying that people around here want a mine on Red Lady. Right. And Blue Mesa might overflow its banks this weekend.

The Forest Service decision means that the company can now head into an environmental review process called NEPA. NEPA is not for those in a hurry. NEPA brings out the buzz saws. A controversial project of this proposed size with this much opposition should last years if it’s on a fast track and cost US Energy millions of dollars. In-depth studies, analysis, answers to questions brought up by members of the public and organizations like HCCA and the Red Lady Coalition will take many, many, many, many minutes of thought, engineering and fact gathering. And it is then that the Forest Service will decide whether or not a mine can happen responsibly. And then, whichever way that decision falls, more lawsuits should be expected. Despite the insinuations of the mining company, this is not a short process with backing of the people living in this community.
Oh, and then there’s the simple cost and ramifications of getting a mine started in central Colorado. A financial analyst with a home in the valley emailed me earlier this year with some interesting information about moly mining in general. He pointed out that molybdenum mining requires “enormous water flows and an oven to cook at 600-700 degrees. Both generating enormous waste products…Moly mining is so extraordinarily polluting that most experts feel future growth will need to be in emerging nations such as Indonesia where there is no EPA type of agency,” he surmised.
The costs of opening a new mine in a location such as this are staggering. Infrastructure that includes tailings ponds, mills, electricity infrastructure and transportation infrastructure upgrades could reach not into the hundreds of millions of dollars but top a billion dollars.

I understand why US Energy wants to put lipstick on this pig and dress it all up in frilly clothes to try to attract another partner and scare those living near the potential mine into taking action no matter what the cost. They are running out of money and opportunity. Keeping a water treatment plant that only blows expenditures without producing revenues is not a good part of any business model.
And did we mention that the price of molybdenum is now about $11 a pound? And there is no shortage of moly around the world. Those factors don’t make extracting the metal in a new mine a cash cow.
Look, the idea of a mine certainly hangs over this end of the valley like the smell of an industrial pig farm. It’s something we have to pay attention to and not take lightly. A new mine would change this place and damage what tourist economy we have.
But for those freaking out over US Energy’s public statements about the recent Forest Service decision, take them for what they are … an attempt to push a pig into the corner and put lipstick on it.

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