Mine scraps plans to reopen

In the former mining town of Leadville, there has been excitement this past year about the prospects of the Climax molybdenum mine reopening.

That would bring high-paying local jobs that are not dependent on tourism and don't require long drives to the ski resorts.

But on Monday, excitement turned to disappointment as people learned the sour economy has put the brakes on the expected boom.

Mining company Freeport-McMoRan Copper and Gold Inc. announced it has abandoned plans to reopen the mine, at least for now, because of a drop in the price of molybdenum, which is used to strengthen steel.

The company also said it would ramp down production at its Henderson molybdenum mine near Empire and cut 100 jobs, out of 700.

Another 600 contractor employees, 150 at Henderson and 450 at Climax, will be affected, though a company spokesman said individual contractors will decide how many contract workers they cut.

"We are responding aggressively to the current market conditions, which have weakened dramatically in recent weeks," CEO Richard Adkerson said in a news release.

The price of molybdenum dropped from $30 per pound in October to $12 in November because of a drop in demand, which the company said is a result of the economic slowdown and turmoil in credit and financial markets.

The average price in 2007 was $30 a pound.

Climax was once the largest molybdenum mine in the world, but low prices led to a gradual shutdown, completed in 1987, that left Lake County's economy in ruins.

Leadville, one of Colorado's most intensely mined areas, saw booms in the early 1860s, during the "Pike's Peak or Bust" gold rush, and then was left desolate. Another mining boom followed in the late 1870s.

The city's population peaked at 60,000 in 1893, making it the second-largest city in Colorado at the time. Leadville survived the collapse of the silver mining industry with molybdenum, but when Climax closed, the population dropped by a third and is 2,729 today.

These days, tourism drives the economy, but community leaders have long lamented the lack of local jobs and the fact that many residents make long commutes to the ski resorts of Summit and Eagle counties for work.

Lake County Assessor Howard Tritz was one of the 3,200 who lost their jobs when Climax closed.

He was also one of the many who cheered the announcement in December 2007 by Phoenix-based Freeport-McMoRan that the mine would reopen and provide 350 new jobs

"Everybody's been happy about this thing," said Tritz.

"Quite often, in good times, people forget that bad times are right around the corner," said Bob Hartzell, executive director of the National Mining Hall of Fame and Museum in Leadville.

Freeport-McMoRan has already spent $150 million to get the mine running, with another $50 million in short-term commitments toward the overall $500 million price tag to reopen Climax, company officials said.

Mining was supposed to resume in 2010, but instead, work will be halted until the price of molybdenum has recovered.

Officials said that once a decision is made to resume construction, the mine could be running in 12 to 18 months.

Said Adkerson, the CEO, "We have a positive long-term view for molybdenum markets and will be positioned to increase our production as market conditions approve."

Local officials said the community has been through this before.

"One day, it will be the molybdenum giant like it was in the past," Tritz said.

"We can handle it. We've handled it before. It's like the old days of silver. Boom and bust; we're still here."