Friday, February 15, 2008

Leadville Mine Planning to Re-open by 2009 - Will Create 300 New Jobs - When the mine shut down, many Coloradans lost everything they knew

Phelps Dodge Corp. is planning to reopen the Climax Molybdenum mine near Leadville by 2009 after overhauling infrastructure and acquiring necessary permits, the company announced Wednesday.

Company spokesman Ken Vaughn said the Climax mine would employ about 300 people when it reopens. Currently, no other mines operate in Lake County.

The mine, which at its production height employed about 3,200 people, last operated – briefly – in 1995. Since then, Phelps Dodge has monitored the molybdenum market and left open the possibility of restarting operations.

Last year, the price of molybdenum – used primarily as a strengthener of steel – hit an all-time high of $35 per pound.

At the same time, the company completed a pre-feasibility study about renewing operations at Climax.

Based on the study and the strong molybdenum market, the company board of directors approved restarting operations contingent upon a final feasibility study and permit approvals.

“Molybdenum market fundamentals remain strong,” chief operating officer J. Steven Whisler said in a press release Wednesday.

“Phelps Dodge is committed to meeting the requirements of its customers and we believe the Climax mine is the best non-operating molybdenum resource in the world.”

The company owns a molybdenum mine near Empire and Copper mines in Arizona, New Mexico, Chile and Peru and employs about 13,500 people.

The company plans to demolish most of the existing infrastructure and replace it with cleaner, more efficient structures. It plans to invest as much as $250 million to upgrade the operation.

“It’s just not practical to re-open those old facilities,” Vaughn said. “We have to put in place state-of-the-art facilities so we have a mine operating at modern standards. It will be a major construction project.”

Jobs in mining, driving, processing, engineering and administration will be available when mining operations resume. Construction jobs will open during demolition and construction.

The refitted mine could produce 20 million to 30 million pounds of molybdenum per year, the press release said.

Major layoffs occurred in the early 1980s and production halted in September of 1981.

In 1981, assessed value of property in Lake County was $258 million but it dropped to $44 million in 1987 as the mine ceased operation, Howard Tritz, Lake County assessor, said.

The mine operated briefly from its open pit in 1992 and again in 1995 when it closed because of the slow market for molybdenum, Vaughn said. He said the market has picked up based upon demand from China and other developing companies.

The company has maintained a crew at the site since the mine closed and has spent millions of dollars on reclamation, Vaughn said. He explained the company has always envisioned re-opening the mine and has kept many of its operating permits current.

Permits from Summit County and Lake County – the mine straddles the county line along Colo. 91 atop Fremont Pass – but permits from the Colorado Air Pollution Control Division will need to be obtained before the mine can re-open.

“We’re committed to continuing environmental and reclamation programs already underway and building new facilities that are state-of-the-art in how they are operated environmentally,” Vaughn said.

Company officials said they will maintain contact with residents in the area as the re-opening process continues.

“We know this is a major decision affecting the area,” Vaughn said. “We want to keep everybody in the community informed.”

Officials react to decision with optimism

Cheers and optimism in Lake County met the Phelps Dodge Corp. announcement Wednesday afternoon that it plans to reopen the Climax Molybdenum mine.

“This is great news,” Ken Olsen, Lake County Commission chairman, told the Leadville Herald Democrat Wednesday. “It’s good for all of Lake County and the region.”

The mine history dates to its discovery in 1879. During World War II, it became a major part of the steel production for the U.S. war effort. During its peak production in the late 1970s, the mine employed about 3,200 workers.

“The reopening of this mine would help revive an entire city and region within my district, and I couldn’t be happier with this announcement,” said state Sen. Tom Wiens, whose district includes Lake County.

“The mine brings jobs, commerce and economic development to Lake County and the entire region.”

Local leaders will begin planning for increased housing needs and student population caused by the 300 jobs expected to become available when the mine re-opens.

“I’m so excited,” Leadville Mayor Bud Elliott told The Mountain Mail Wednesday afternoon. “It means money will be spent every day, not just in the summer.

“I think this is going to be wonderful for the economy of Leadville and Lake County.”

Olsen said every mine has a “life” and that Lake County can’t make the mistake of becoming too dependent on the mining economy.
That mistake was made during previous operations at the mine, which halted in 1987, except for a couple of brief reopenings during the 1990s.
“When the mine shut down, many Coloradans lost everything they knew,” Wiens said. “There can be no doubt the mine’s closure hurt a lot of good, hard-working people.

“When this mine does reopen near Leadville, I have no doubt it will bring the region back to prosperity and open new doors for hundreds of Coloradans.

“This is not only a great decision for economic development, but it also shows an appreciation for the miners in Leadville, who over the years, have proven themselves among the best in the world.”

Christopher Kolomitz, Mail managing editor, also contributed to this story, as did Marcia Martinek, editor of the Leadville Herald Democrat.

Here is the full story from 4/5/2006.