Climax molybdenum mine is about to reopen
By Tom Stundza -- Purchasing, 12/12/2007 12:48:00 PM
Freeport-McMoRan Copper & Gold is spending $500 million to reopen the Climax molybdenum open pit mine near Leadville, Colo., and construct state-of-the-art milling facilities. Annual molybdenum production is expected at 30 million pounds in 2010 at cash costs estimated at $3.50/lb.
Purchasing.com reported earlier that molybdenum prices could rise in 2008 back to or above 2005 levels as buyers cope with 5% less output while demand is rising 4%--thus widening a supply deficit that already has boosted spot prices by 20% this year. Molybdenum, a steel-strengthening alloy metal, averaged a record high $32/lb in 2005, $25 in 2006 and has been averaging $30 so far this year.
Phoenix-based Freeport-McMoRan says in a press release that, at some point, it may double Climax molybdenum production to 60 million lb/year. The Associated Press notes that the company acquired the Climax mine and the Henderson molybdenum mine near Empire, Colo., in March when it bought Phelps Dodge Corp. for $25.9 billion in cash and stock.
Climax opened in 1918 and is believed to be the world’s largest, highest grade and lowest cost undeveloped molybdenum deposit with reserves estimated at 180 million tons. The mine and mill were last operated in 1995. Major construction activities are expected to begin in the spring of 2008 after the winter season. The mill is located in the Colorado Rocky Mountains at an elevation of 11,400 feet.
Freeport-McMoRan also announced plans to increase its molybdenum processing capacity by 20 million lb/year through the conversion of its copper concentrate leach facility at Bagdad, Arizona, to a moly concentrate leach facility by 2010. The firm already has four molybdenum processing facilities at Green Valley, Ariz.; Fort Madison, Iowa; Stowmarket, United Kingdom and Rotterdam, Netherlands.
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