Brief by Central Staff
Mining – May 2006 – Colorado Central Magazine
After a year of study and speculation, Phelps-Dodge announced in early April that it plans to re-open the Climax Molybdenum Mine in 2009. The mine sits atop 11,318-foot Frémont Pass about a dozen miles northeast of Leadville.
The company plans to demolish the current mill and build a new one before resuming production. After construction, about 300 people will work there. It will be an open-pit operation.
Molybdenum is a rather obscure metal whose primary use is hardening steel, although it is also used as a lubricant and in pigments. Rising global steel production has caused a sharp rise in price. The all-time low was $2.36 a pound in 2001; it hit $42 a year ago and has since settled around $25.
At that price, molybdenum can be profitably mined at Climax, and Phelps-Dodge is betting that the price will remain in that neighborhood for long enough to recover the $200 million or more that it plans to spend to bring Climax back into production.
The company anticipates producing 30 million tons a year for at least 20 years. It also produces molybdenum at the Henderson Mine near Berthoud Pass, and as a by-product of copper mines in the United States and Peru.
At its peak production in 1980, Climax employed 3,200 people. Although there was some open-pit mining on the surface, most production was underground. In 1981, an oversupply of molybdenum caused lay-offs, followed by a production shutdown. The mine has operated only sporadically since then, most recently for a brief period in 1995.
Lake County was devastated, losing much of its population and its property-tax base. County officials naturally welcomed the announcement. “It is a great thing happening,” said Ken Olsen, chairman of the board of county commissioners, and “We would very much like the people who work at the mine to live in Lake County.”
