New operation at Climax mine causes to change molybdenum market
TEX reported that the Climax open cut mining mine, which has been located in Colorado State of the USA with annual capacity of 30 million pounds of Mo and has been evaluated as a large sized molybdenum mine since 1976, is expected to launch molybdenum production from 2012.Freeport McMoRan Copper & Gold Inc of USA so far had taken a cautious attitude to produce molybdenum at this mine on commercial base. Freeport expressed from a previous time that, after having ascertained the global movements of molybdenum market, this project to produce newly molybdenum will be decided. Even after December of 2007, when Freeport determined to develop the Climax mine, a crisis of the world economy caused by the Lehman shock arose in autumn of 2008 and, accordingly, Freeport was obliged to postpone a time to operate the Climax mine by one year.Climax Molybdenum Company, which was part of the former company of Freeport, invested USD 50 million in the development of the Henderson molybdenum mine, located in Colorado State of the USA with annual capacity of 40 to 50 million pounds of Mo, in the course of 12 years, and it has passed 35 years since the Henderson mine launched to produce molybdenum. The project to develop the Climax open cut mining molybdenum mine is the second largest one for Freeport, following the Henderson molybdenum mine, and Freeport invested USD 250 million in the development of the Climax mine.The Climax molybdenum mine has aimed to rump up during 2013 and to produce molybdenum on a scale of 20 million pounds per annum. Because of the fact that the Climax primary molybdenum mine commences the production, the world output of molybdenum by primary mines (specialized mines to produce molybdenum from ore) is estimated to continue to share a little higher than 50% and the advantage in molybdenum production at by product mines (copper mines to recover molybdenum as by product) as maintained from 2008 is thought to disappear.However, the Climax open cut mining molybdenum mine is scheduled to launch the production from 2013 and this new production of molybdenum will certainly put a further pressure on the supply situation for the future. Incidentally, the international price of molybdenum oxide turned to fall from June of 2011 and dealer’s price of molybdenum oxide in the middle June of 2011 was USD 14.50 per pound of Mo, having fallen to a low level after an interval of one year. The high price of molybdenum oxide in 2011 was USD 17.80 per pound of Mo recorded in February and the low one was USD 14.50 had a fall of 20% from the high one in February.The global structure to supply molybdenum has changed from 2008 and the quantity of molybdenum supplied from primary mines is increasing and the strength for molybdenum supply between primary mines and by products mines has transformed to be advantageous for primary mines. Consequently, primary mines have shared 52% to 53% of the world molybdenum production.However, the new projects by copper mines have been developing and the quantity of molybdenum, being recovered at by product mines, is in the direction to increase. If Freeport-McMoRan of the USA extends to produce molybdenum on commercial base at the Climax open cut mining mine in Colorado State of the USA, a ratio of molybdenum production between primary mines and by product mines will reverse and a possibility, which a ratio of molybdenum production at by-product mines will exceed that at primary mines, is thought to come up. Already, in January to March quarter of 2011, copper mines to recover molybdenum as by product have existed in South America with an overwhelming large number and the total output of molybdenum by these copper mines in January to March quarter of 2011 had increased by 33% compared to that in the same quarter of 2010. This phenomenon was due to a considerable increase of copper production in South America.The cost to produce molybdenum at primary mine is estimated to be higher than that at by produce mine. When copper price is maintained on a firm tone, the cost to recover molybdenum at by product in the process of copper production is said to be cheaper. In the past years, an expansion of molybdenum production at by product mines was supposed as the factor to weaken molybdenum price. On the other hand, Freeport is scheduled to launch to produce molybdenum on commercial base from 2012 at the Climax mine and is proud of the cost for molybdenum production at this mine to be the lowest one among primary mines.