Freeport-McMoRan Copper & Gold said Monday it has halted plans for a $500 million renovation of the Climax mine in Leadville, dealing a significant blow to the historic mining district’s hopes for a renaissance.
The mine reopening, scheduled for 2010, would have created 350 jobs and helped erase memories of the mine’s 1987 closure, which devastated the Lake County economy and wiped out 3,200 jobs.
“Everybody is pretty disappointed,” said Lake County assessor Howard Tritz, 72, who worked for 30 years at Climax until the mine shut down. “However, as is typical with Leadville, it’s been boom and bust since the time we started. There will be a rebound.”
Colorado was hit with a double whammy when Freeport also said it would curtail molybdenum production at a sister mine in Henderson and cut 100 full-time jobs. The Henderson mine employs 700, and the Climax mine employs 25.
Phoenix-based Freeport attributed the cuts to the plummeting price of molybdenum, a metal used as a hardening agent in steel and other industrial products.
Since mid-October, molybdenum has fallen from $30 a pound to $12 a pound, Freeport said.
“We are responding aggressively to the current market conditions, which have weakened dramatically in recent weeks,” Freeport chief executive Richard Ad kerson said in a news release.
About 150 contract employees at Henderson and 450 at Climax also will be affected, Freeport spokesman Eric Kinneberg said. He said the timing of the job cuts has not been determined.
Freeport foreshadowed the cuts in October when the company said it may defer projects to conserve cash amid plunging metal prices and the credit crunch.
The company has poured $150 million into the resurrection of Climax and said another $50 million has been committed regardless of whether the mine reopens.
“Reclamation and environmental projects will continue and (the company) will preserve the significant Climax reserves and resources for better market conditions,” Freeport said in the news release.
The project was expected to produce 30 million pounds of molybdenum a year.
Just last week, management at the Climax mine held a vendors meeting to discuss opportunities that may have surfaced when the mine reopened.
“They met with people who could possibly provide goods and services to the mine,” said Bob Hartzell, executive director of the National Mining Hall of Fame and Museum in Leadville. “Everybody was buoyed by that meeting.”
Company officials said that if it is decided later to move forward with the reopening of Climax, production could start within 12 to 18 months.
“We have to keep our fingers crossed that the market will recover,” Hartzell said.
Andy Vuong: 303-954-1209 or avuong@denverpost.com
