Mining for Moly in the Outback


Moly Mines Ltd. has awarded a $1.1 billion Australian (U.S. $997.9 million), seven year mining and earthmoving contract for the Spinifex Ridge Molybdenum Project to Perth-based contracting group Macmahon Holdings. Molybdenum is used as an additive in both lubricants and greases, in addition to its primary use as an additive in steel alloys and other steel products.

Derek Fisher, Moly Mines managing director, said the contract represented a milestone towards development of Spinifex Ridge in Western Australia. The signing of the mining contract is a significant step forward in developing the worlds next major molybdenum mine, Fisher said. The timing of this contract ensures that the equipment required to develop the mine will be available on time following receipt of required works approvals and full project financing.

Another company drilling for molybdenum, MetalCorp, has said the price of molybdenum oxide has gone from $3 per pound to $30 per pound over the last two years due to strong demand and short supply. According to InfoMine Inc., which tracks metal prices, molybdenum prices have remained at about $33 since the end of November 2007.

During the contract, Macmahon will develop the open pit mine to a size of 1.2 kilometer by 1.1 kilometer, and to depth of more than 400 meters. Mining development is expected to commence in mid 2008. Spinifex Ridge has an expected mine life of more than 20 years.

During the seven-year term of the contract, Macmahon will mine more than 180 million cubic meters of material and employ a permanent workforce of 270 operators.

Based in West Perth, Western Australia, Moly Mines has mining experience in Pilbara of W. Australia, New Zealand and Malaysia, employing more than 3,000 people.

Related Topics

Additive Components    Additives    Friction Modifiers    Molybdenum