The future: Is modern mining set for a comeback?

LEADVILLE — As you drive into Climax Molybdenum Mine at the 11,313-foot summit of Fremont Pass, a sign shoos away job seekers from what used to be the largest employer in Lake County.

“Climax is not hiring or accepting applications at this time,” it reads. But in two years, the mine, owned by Freeport-McMoRan Copper & Gold, Inc., could be sending out a different message.

Climax’s board of directors has approved restarting production at the mine in 2009 pending the results of a feasibility study due by the end of the year, said Ken Vaughn, manager of mining communications for Freeport-McMoRan, which purchased previous mine owner Phelps Dodge Corporation in March.

Even if the 89-year-old mine reopens, it won’t require the same manpower as it did in its heyday in the early 1980s.

“The mine has a long history. At one time thousands of employees worked there. This would be a much smaller scope. We’re looking at perhaps 300 employees, although that number won’t be certain until the feasibility work is done,” Vaughn said.

The mine opened briefly in 1995, but has been dormant ever since, save for ongoing environmental restoration work on the 14,000-acre property.

Right now, a skeleton crew of 21 Climax workers, plus about another 80 contractors are preparing the mine for its potential rebirth.

The rumble of a bulldozer signifies the demolition of older buildings that will be replaced with more efficient structures meeting current environmental standards, while metal clanks together as a crew erects scaffolding on the side of one of the few buildings still standing.

Just beyond the 1950s crusher facility that’s been gutted stands a rusty 71-year-old water tower that will stay put because of its historical value, said mine manager Jay Cupp.

“We’re as anxious as anyone to see if it proves to turn into a viable mine, but it’s just a bit early,” Cupp said while driving down one of the property’s dirt roads.

The board’s decision to examine the possibility of restarting production at the molybdenum mine was market driven, Vaughn said.

The price of molybdenum has increased substantially since 2001, said Colorado Mining Association president Stuart Sanderson.

According to the Colorado Geological Survey, the price of molybdenum was $27 per pound at the end of 2006 compared with $8 per pound just three years earlier.

That price correlates to a rising worldwide demand for molybdenum, which is used primarily as an alloy agent to strengthen steel. It’s used in everything from building automobile parts to lubricants.

Colorado is the leading producer of molybdenum in the nation, and the Henderson Mine in Clear Creek County, also owned by Freeport-McMoRan, is the largest molybdenum mine in the country, producing 37 million pounds of the metal last year, according to the Geological Survey.

A pre-feasibility study showed that Climax could produce 20 to 30 million pounds of molybdenum each year, and the target production would be 24 million pounds per year, according to the Colorado Mineral and Energy Industry Activities report for 2006 completed by the Colorado Geological Survey.

If Climax were to reopen, the economic impacts would likely trickle down to Summit County, even though most of the mine is located in Lake County.

“It’ll certainly be a positive impact on the employment base, assuming that the mine reopens. There’s no question about that because the mining industry is looking to hire workers. That’s a real problem we’re facing right now is replacing the baby boomer miners who are beginning to retire from the work force,” Sanderson said.

Future of mining in Summit County

The pending reopening of Climax might be the closest thing to a mining revival this side of Fremont Pass ever sees.

“Well as soon as you say never, it’ll happen, but I just don’t see it. I don’t see any mining coming back,” Summit County Commissioner Tom Long said.

Long said he thinks skyrocketing land values combined with a difficult permitting process make large-scale mining operations a prohibitive business venture.

But that’s not to say the county isn’t still rich with minerals.

In the Country Boy Mine near Breckenridge, $50 million worth of gold awaits in the mine’s vein, but the economic barriers are too great to consider re-starting production, which ended in 1948, said mine owner Paul Hintgen.

The mine doesn’t meet any current Occupational Safety and Health Administration standards. Also Country Boy doesn’t produce solid gold or gold flakes, but rather ore from which gold has to be extracted in an expensive and environmentally taxing process, Hintgen said. Beyond that, he’s not sure a facility exists in Colorado anymore to process the extraction.

Even with the high price of gold — currently at about $650 an ounce — Hintgen said it’s not tempting to explore the possibility of reopening his mine.

“It would be if the ore structure had some more of what we would call a wire gold or a crystallized gold that’s almost more of a pure gold,” he said.

Sanderson, of the state mining association, agrees that mining doesn’t have much of a future in Summit County, at least for right now, but for different reasons.

In Sanderson’s opinion, the county has taken actions to prevent mineral investment by prohibiting modern mining technology.

In January 2004, the county passed a ban on cyanide heap-leach mining, which essentially uses chemicals to extract gold from low-grade ore.

“I think that really discourages mineral development, although there are deposits there that could be developed,” Sanderson said.

The Colorado Mining Association challenged the ban, and a District Court judge overturned the regulations. The Colorado Court of Appeals sided with the county, and the Mining Association has appealed to the state Supreme Court.

The high court’s decision could be the ultimate deciding factor in whether the mining industry makes a comeback in Summit County.



<i>Nicole Formosa can be reached at (970) 668-4629, or at nformosa@summitdaily.com.</i>