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| Freeport-McMoRan Announces To Reduce Moly Production For Steep Fall Of Its Prices |
| = Restart Of Climax Moly Mine Is Deferred |
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Freeport-McMoRan Copper & Gold Inc. of the USA announced on the 10th of November that, in response to the recent sharp decline in molybdenum prices, the Company plans to reduce production from its Henderson primary molybdenum mine and to defer the restart of the Climax molybdenum mine. The market price of molybdenum oxide had risen to US$30 per lb. of Mo on average in 2007 and to US$33 on average in the first 9 months of 2008. However, reflecting the current turmoil in financial markets, the slowing demand for molybdenum in the metallurgical and chemicals sectors during October of 2008 combined with weak global economic conditions has resulted in a sudden and sharp fall in molybdenum prices in recent weeks. The Metals Week Molybdenum Dealer Oxide price, thought as an index, fell to US$12 per lb. of Mo on the 10th of November. In response to these conditions, Freeport-McMoRan has revised its mine plans at the Henderson primary molybdenum mine in Colorado State and the annual output of molybdenum at this mine in 2008 will be reduced by 10 million lbs. (approximately 25%). Also, the Company is assessing the potential to curtail molybdenum production at its by-product mines. In addition, Freeport-McMoRan announced the suspension of construction activities associated with the restart of the Climax molybdenum mine in Colorado State. The Company remains positive on the long-term prospects for the molybdenum business and the future of the Climax mine and approximately US$150 million of the US$500 million project had been already invested in the Climax mine. The construction activities will be suspended in a controlled and sequenced manner in order to maintain the integrity of the work completed to-date and to allow for a quick restart of the project pending improvement in market conditions. Once a decision is made to resume construction activities, the project would be capable of starting up within a 12 - 18 month timeframe. |
| last modified : Tue 18 Nov, 2008 [10:27] |
