Prices put work back in moly
Clear Creek County’s Henderson Mine is resuming operations after a sustained decline in the molybdenum market suspended mine development last year.
Citing an uptick in the moly market — currently priced around $8.30 a pound, up from less than $5 a pound last year — Henderson owner FreeportMcMoRan on Wednesday announced it will resume mining in a dormant area, add employees and extend the mine’s life to 2026 from the expected deadline of 2020. The news follows two rounds of layoffs in 2015 that saw the mine reduce its workforce by 210 positions.
The sooner-than-expected closure of the Henderson Mine forced Clear Creek County leaders to scramble last year as they fought to wean from a near 40-year reliance on minetax revenues and jobs. The mine paid $14 million in taxes in 2015 — 70 percent of all property taxes collected in Clear Creek County and accounting for more than a third of the county budget. Last year the county was planning to slash as much as 40 percent from its budget by 2021.
But even with the sixyear extension of the mine closure, Clear Creek’s leaders are not loosening their belts.
“This announcement, it’s not that huge a deal for us,” Clear Creek County commissioner Sean Wood said.
About 15 years ago, the county and mine reached an agreement to smooth the flow of tax revenues from Henderson, which is tracking to produce about 10 million pounds of moly this year, down from more than 27 million pounds in early 2016. The agreement based tax payments on a 10-year rolling average for moly prices. In the early 2000s, molybdenum oxide, which is used to harden steel, sold for as much $46 a pound.
The 10-year average price of moly sinks with each passing day as the shortlived $46-a-pound high fades into history. So Clear Creek County’s revenues from Henderson are on a steady decline. And that’s not going to change.
“Our tax revenues from Henderson are still going to go down, and they will remain at a fairly low level,” Wood said. “We are still going to have to do pretty significant reductions in our expenses and really be aggressive at looking for other revenues in other areas.”
The Henderson Mine employs about 315 workers — 215 at the mine just outside Clear Creek’s Empire and another 100 at the mill over the hill in Grand County’s Kremmling. Henderson produces the good stuff, and Freeport-McMoRan said Wednesday that the market for high-value products, like lubricant-grade moly, has strengthened.
But if the mine extends its operating life any longer, additional blocks of ore — called panels — would need to be developed. The ore reserve is there, but a decision to expand “would be dependent on market conditions and production factors at the time,” according to a statement from the company.
“Operating with the cyclicality of the molybdenum market is challenging and can impact our stakeholders in Colorado,” the statement says. “We are excited about this development and pleased with the positive outcomes it will have on our employees, the communities where we live and work, and county governments who so diligently work for this region.”
Clear Creek County is not waiting for the whims of the moly market to float its boat. The county is aggressively pursuing a recreation-based tourism economy, hoping to diversify revenue streams beyond a single big player.
A new primary-care clinic — the first in many years for Idaho Springs — has opened. Investors are planning a 160-room hotel and convention center above a creekside pedestrian village at the dormant Argo Mill site. Clear Creek and Jefferson County open space advocates partnered this spring to buy land on Floyd Hill, where the counties are planning a network of mountain bike trails. Fundraising is underway for the development of mountain biking and hiking trails on hundreds of cityowned acres between Idaho Springs and Central City.
“We are focusing on creating additional outdoor recreation, which is going to increase the quality of life and hopefully, over time, make Clear Creek a destination,” Wood said.