Climax Molybdenum, Phoenix, Ariz.-based molybdenum producer and supplier, is a subsidiary of Freeport-McMoran

The parent company expects annual production at the mine to reach approximately 30 million pounds of molybdenum beginning in 2010 at estimated cash costs approximating $3.50 per pound. Freeport-McMoran plans to evaluate a second phase of the Climax project that could potentially double future annual molybdenum production to about 60 million pounds. Recently a company drilling for molybdenum, MetalCorp, 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.

Its used as an additive in lubricants, and it also has a lot of other chemical uses, for example as a catalyst for sulfur removal in petroleum processing, Ken Vaughn, Freeport-McMoRan director of mining communications, told Lube Report. Worldwide, its primary use is in the steel industry as an additive in steel alloys, in stainless steel and in other steel products. It is also used as a grease additive.

Restarting the plant is a response to worldwide demand for molybdenum, in large part by demand in China, Vaughn continued. Part of the demand in China is related to the large amount of construction work going on in the country, he added.

According to Phoenix, Ariz.-based Freeport-McMoRan, the Climax mine is believed to be the worlds largest, highest grade and lowest cost undeveloped molybdenum deposit.

Vaughn said weather will play a factor in completing the project. Major construction will not be able to proceed until the spring, he explained. Its at over 11,000 foot elevation in the Colorado Rockies, so that will have to be accounted for. But weve already begun work, we begin major construction in the spring, and we intend to begin producing in 2010.

On Dec. 12, Baden, Switzerland-based ABB announced it won a $20 million order from Climax Molybdenum for gearless mill drive systems for the mine restart project. Deliveries of the systems are expected at the end of 2008.

Major construction activities are expected to begin in the spring of 2008 after the winter season. Construction employment will begin with about 150 workers and peak at more than 500. The operation will employ about 350 when production begins.

Freeport-McMoRan also announced plans to increase its molybdenum processing capacity by 20 million pounds per year through the conversion of its copper concentrate leach facility at Bagdad, Ariz., to molybdenum concentrate leach facility by 2010. The company has four additional molybdenum processing facilities at Green Valley, Ariz.; Ford Madison, Iowa; Stowmarket, U.K.; and Rotterdam, Netherlands.