Climax back in business

Lake County will reap hundreds of jobs in restart

By Roger Fillion, Rocky Mountain News (Contact)

Wednesday, December 5, 2007

The Rocky / 2005

Freeport-McMoRan will spend $500 million to begin construction next spring at Climax. When production begins in 2010, about 350 miners will have jobs.

The Rocky / 2007

Buildings are demolished in July at the Climax mine. Freeport-McMoRan Copper & Gold Inc., said it will spend $500 million to begin construction next spring and resume open-pit mining operations in 2010.

It's official: The storied Climax mine near Leadville will reopen after lying dormant for a dozen years, a half-billion-dollar project that's expected to generate hundreds of new jobs.

"This is a great day for Lake County," Lake County Commissioner Mike Hickman said.

The molybdenum mine's owner, Freeport-McMoRan Copper & Gold Inc., announced it would spend $500 million to begin major construction at Climax next spring and resume open-pit mining operations in 2010.

Construction employment will begin with about 150 workers and peak at more than 500. The operation will employ about 350 miners when production begins, according to Freeport-McMoRan.

"They're bringing good-paying jobs to Lake County," Hickman said. "They're also bringing substantial investment to this community."

Phoenix-based Freeport-McMoRan also said it would study the option of eventually doubling the mine's initial output.

Molybdenum price way up

The mining giant spent months examining whether to restart the decades-old Climax in light of the climbing price of molybdenum, a metal for hardening steel.

Lake County residents have been waiting anxiously for word on whether Climax would, indeed, reopen, hoping a restart would pump fresh economic life into the area.

But at the same time, many residents in Leadville, the county seat, have been wary about betting their economic future on Climax.

The town has a boom-and-bust history, thanks to Climax. Reflecting the world economy's fluctuations, Climax has opened and shut before. Thousands lost jobs in the 1980s.

"This project will provide long-term, low-cost production and enable us to continue our long-standing tradition of providing our customers with high-quality molybdenum products and service," Freeport-McMoRan CEO Richard Adkerson said in a statement.

The initial project involves the restart of open-pit mining and the construction of new "state-of-the-art" milling facilities for processing and extracting molybdenum. Annual production is expected to reach about 30 million pounds.

Freeport-McMoRan said it would study whether to expand output down the road to about 60 million pounds a year.

Variety of uses

Molybdenum is used in everything from airplane parts - where it serves as a strengthener - to computer chips, where it helps prevent overheating.

Climax has sat dormant since 1995, a victim of plunging molybdenum prices. They slid below $2.50 a pound in 2001, having changed hands at $10 back in 1977.

World economic growth, fueled by China's hunger for construction materials, has sent molybdenum prices up more than tenfold to above $30. Freeport-McMoRan is using a long-term molybdenum price of $6.50 a pound in its initial calculations.

Situated on a high pass beneath 13,000-foot mountain peaks, Climax sprawls across 22 square miles of private land. It sits at the headwaters of three rivers: the Arkansas, the Eagle and Tenmile Creek.

The potential restart of the mine has attracted much less environmental attention than a Wyoming company's plans to open a molybdenum mine on Mount Emmons, which looms above the ski-resort community of Crested Butte.

That project has drawn significant opposition from community leaders.

Water-treatment plant

Freeport-McMoRan recently completed construction of a $23 million water-treatment plant designed to treat all water leaving the Climax site so it meets environmental standards before entering streams.

Jeff Parsons, senior attorney for the Western Mining Action Project, a nonprofit group in Lyons that handles mining and environmental issues, called the new water-treatment plant "encouraging." He also noted that the mine's restart will occur on the existing site, as opposed to the opening of a brand new mine.

And Parsons pointed to Freeport-McMoRan's operations at the Henderson molybdenum mine near the town of Empire, in Clear Creek County.

"By all accounts, that's a very well-run operation," Parsons said. "I'm not aware of any major water quality issues there."

Climax molybdenum mine

* Owner: Freeport-McMoRan Inc.

* Restart investment: $500 million

* Projected resumption of output: 2010

* Jobs: As many as 500 construction jobs and 350 full-time operating employees

* History: Mine first started output in 1918, during World War I.

* What is molybdenum? A metal for hardening steel.

• December 5, 2007

  6:16 a.m.

  Suggest removal

  rellimpank writes:

  --as a former Leadvillian who worked at Climax for 17 years, I sure hope to make it to the grand re-opening--

• December 6, 2007

  1:39 p.m.

  Suggest removal

  Brockage writes:

  Hope you make it in good health rellimpank. Me, I'm dancing in the snowdrifts I'm so happy to see it will be producing again.