Climax Molybdenum Mine Lives Again Thanks to $700 Million Capital Outlay

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Leading international mining company Freeport-McMoRan Copper & Gold Incorporated (NYSE:FCX) (Phoenix, Arizona) recently started up the Climax Molybdenum Mine in Climax, Colorado. Capacity of the mine is 30 million tons per year, but it is slated to produce only 20 million tons in 2013, pending market demand.

The project has been a long time coming--and almost died in 2009, due to the economic downturn that saw the value of molybdenum take a dip. The closed Climax mine was previously producing mine that was acquired by Freeport-McMorRan as part of a $25.9 billion acquisition of Phelps Dodge in 2007. Almost immediately thereafter, plans were formed to restart the mine. Molybdenum prices at the time were about $34 per pound, much higher than today's prices of between $12 and $13 per pound.

The company started construction in 2008, and toward the end of that year the bottom fell out of the market and Freeport-McMorRan halted all construction activity and sent contractors home after completing erection of the concentrator building; procurement of SAG and ball mills; installation of pipelines for water processing; and preparation of a tailings dam and rehabilitation of a water reservoir. By this time, the company had spent approximately $200 million on the project. In early 2011, the market had recovered enough to restart construction, and an estimated $700 million has been spent to date.

An expansion to 60 million pounds per year was planned but placed on hold until further notice. Jacobs Engineering Company (NYSE:JEC) (Pasadena, California) provided engineering services, and TIC acted as the general contractor on the project.

The Climax Molybdenum Mine restart represents one of $180 billion worth of North American project restarts that have come back to life since the economic downturn.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.