Colorado mines pull back as price of molybdenum plunges

“We need moly to stay in the moly business…”

The price of molybdenum, like any mineral, has an impact on any mining operation. The price of moly has dropped from $33 a pound this summer to just $12 a pound this week and as a result, the owner of two Colorado mines is laying off workers and slowing down the resumption of moly mining near Leadville.

However, according to director of community relations for the Mount Emmons project Perry Anderson, the price of molybdenum has not affected the plan by Thompson Creek Metals to pursue moly mining near Crested Butte.
“We are still proceeding ahead,” Anderson explained. “This mine is so far away that we are looking at it as long-term inventory. I don’t see a change happening because of the daily price changes in molybdenum.”
Representatives of both the Red Lady Coalition and High Country Citizens’ Alliance (HCCA) agree with that sentiment.
“These are long-term projects and we feel anyone like Thompson Creek is looking at this in the long-term,” said Red Lady Coalition president Bill Ronai. “We don’t know where the price of molybdenum will be five or six years from now. The bigger issue from the standpoint of Crested Butte and the Gunnison Valley is what a mine does to the amenity and knowledge-based economy we have.”
HCCA public lands director Dan Morse added, “Just look at what happened to Leadville this week. Some $300 million was taken out of their economy. That’s a big impact and it is typical of the cyclical boom-and-bust swings of a mining economy. An amenity-based economy doesn’t have such dramatic swings.”
Thompson Creek operates several molybdenum mines around the world. Thompson Creek CEO Kevin Loughrey has indicated those operations are essentially running out of the mineral. Anderson says Thompson Creek is looking at Mount Emmons as a great addition to the company’s portfolio.
“We need moly in the future to stay in the moly business,” Anderson explained. “We are going forward. It’s a good project and not a marginal project. If it wasn’t such a good deposit of moly, things might be different, but I haven’t heard anything about Thompson Creek pulling back.”
According to a press release on its website, “Freeport-McMoRan Copper & Gold Inc. (FCX) announced Monday that in response to the recent sharp decline in molybdenum prices the company plans to reduce production from its Henderson primary molybdenum mine and to defer the restart of the Climax molybdenum mine.”
“The company has revised its mine plans at its Henderson primary molybdenum mine near Empire, Colorado to operate at a reduced rate. This will result in a reduction in expected annual molybdenum production of approximately 10 million pounds, reflecting a 25 percent reduction in Henderson’s approximate annual production.”
FCX also announced the suspension of construction activities associated with the restart of the Climax molybdenum mine near Leadville.
In the press release, Richard C. Adkerson, Freeport-McMoRan CEO, said, “We are responding aggressively to the current market conditions which have weakened dramatically in recent weeks. These changes to our molybdenum production plans will allow us to reduce operating costs and capital spending, adjust our production profile to better match market requirements. We have a positive long-term view for molybdenum markets and will be positioned to increase our production as market conditions improve.”
Anderson said he understands that the price of moly affects the plans of mining companies. But at this stage of the Mount Emmons Project, he says, “It doesn’t affect us. Demand for molybdenum is down right now and that’s part of the natural cycle. But for this project, we are looking at a more long-term plan.”
Morse emphasized it’s not all about the price of moly, saying “No matter how much molybdenum is selling for, the environmental impacts of a moly mine remain and are a big concern.”
Ronai agrees. “Commodity based economies would upset what we have going on here at the moment,” he said. “Mining is not a renewable resource. Streams to fish in, trails to hike on, open skies, snow are all renewable and that’s what we have right now.”
Anderson said Thompson Creek was planning on opening an informational office in Crested Butte by the first of the year.