The Climax Mine will be up and running sometime in this quarter, according to officials at Freeport McMoRan Copper & Gold (FCX), mine owner, who discussed the mine start-up during the earnings report for fourth quarter 2011, held on Jan. 19.
Construction of the $700 million in mine improvements is now 95 percent complete.
"In the very near future, we'll be feeding ore to the mill and going forward with it," said CEO Richard Adkerson during the earnings report.
Later, in response to a question, David H. Thornton, president of Climax Molybdenum, narrowed the time frame to first quarter 2012.
"We're starting commissioning right now on some of the major equipment, primary crusher, SAG mill, ball mill. So we anticipate start-up before the end of the first quarter," Thornton said.
FCX is projecting production of 80-million pounds of molybdenum this year. Thornton said about 7 million of these pounds will come from Climax, which eventually can produce up to 30 million pounds a year.
Kathleen Quirk, chief financial officer, added that the 80-million pounds of moly also include lower grades from some of the company's by-product mines.
"This ramp-up at Climax is offsetting the decline in by-product, and that's why you don't see a significant change in our 2012 sales compared with '11. But we'll have the flexibility subject to market conditions to increase production, potentially ramp up quicker at Climax or change Henderson if market factors are there for us," she said. Henderson is the other FCX molybdenum mine in Colorado.
Assessor Howard Tritz said it would be 2013 before Lake County benefits from the increase in valuation at the mine, and had no estimates on what that increase will be.
Although property tax is assessed as buildings are built, the personal-property tax on equipment doesn't kick in until the equipment, a ball mill for example, is actually operating.
FCX's fourth-quarter 2011 consolidated-molybdenum sales were 19-million pounds higher than the estimate in October of 18 million pounds and the year-ago fourth quarter sales of 17-million pounds. Moly was selling at about $15 a pound in fourth quarter compared with $16.60 a pound in fourth quarter 2010. The company reported net income attributable to common stock for fourth-quarter 2011 at $640 million, $0.67 per share, compared with net income of $1.5 billion, $1.63 per share, for fourth-quarter 2010.
The decrease in income was due, in large part, to a strike at its Grasburg Mine in Indonesia, which is now resolved.
Net income attributable to common stock for the year 2011 was $4.6 billion, $4.78 per share, compared with $4.3 billion, $4.57 per share, for the year 2010.