For more than a century, Leadville was to Western mining
towns what the Rolling Stones were to rock ‘n’ rollers: the biggest, richest,
wickedest and longest-lasting act around. It’s also among the highest, nearly
two miles above sea level at the headwaters of the Arkansas River in central
Colorado. Now, after an absence of a dozen years, mining may return to the
Cloud City in 2012, if production is resumed at Climax Molybdenum.
Mining started there in 1859, when prospector Abe Lee
announced to his companions, “Boys, I’ve got all the gold of California in this
pan.” It continued until 1999, when the ASARCO Black Cloud Mine — which produced lead, silver, gold and
zinc — ran out of ore and closed.
Leadville boomed with silver in the 1870s and ’80s,
attracting three railroads and a population of more than 20,000. But the
mainstay for most of its mining career has been a much more obscure metal:
molybdenum, generally known as “moly,” pronounced “mollie.”
Though molybdenum has a variety of uses ranging from pigment
to lubricant, it mainly serves as an alloy to harden steel and make it more
resistant to corrosion in uses like automotive exhaust systems and oil well
stems.
The molybdenum deposit sat right on the Continental Divide
next to 11,318-foot Fremont Pass, a dozen miles north of Leadville. The
railroad station at the top of the pass was named Climax, and that inspired the
names of the Climax Mine and the Climax Molybdenum Co. Production began during
World War I.
By 1980, it was the largest underground mine in the world.
The mine and mill ran around the clock with about 3,200 employees drawing union
pay with good benefits. The property taxes gave Leadville public facilities
like good schools, a library and recreation opportunities.
All that collapsed in the early 1980s, right after the price
soared to the point where copper producers (moly is often found with copper)
found it profitable to add molybdenum recovery circuits to their mills. Then
the American auto industry, a big moly customer, abruptly hit the skids. The
result was a tremendous over-supply of molybdenum, whose price plunged below
the cost of production.
The Climax Mine halted production in 1982 and operated only
sporadically thereafter. A third of Leadville’s population moved away, and the
struggling town became a bedroom community for resorts over the Continental
Divide: Vail, Beaver Creek, Copper Mountain, Breckenridge. The work was
seasonal, lacking the pay and benefits of the old union mining jobs. And as
parents toiled long hours 40 miles away from town, their latchkey kids suffered
high dropout rates and widespread substance abuse.
Will all that change for the better if Phoenix-based
Freeport-McMoRan, the mine’s most recent corporate owner, resumes molybdenum
production next year, as currently planned?
For starters, there’s no guarantee the mine will re-open.
“This isn’t the first time they’ve talked about resuming production,” observed
Marcia Martinek, for the past nine years the editor of the weekly Leadville Herald-Democrat. In 2008, work
was under way to get production started in 2010. As a huge new ball mill was
trucked through town on an October afternoon, the high-school band marched with
it down Harrison Avenue, and the town turned out to cheer from the crowded sidewalks.
“People were giddy then,” Martinek said. Then the company
announced it would cut back on development, citing sagging mineral prices.
“This time around, a scheduled re-opening is good news — that’s about 400 jobs
— but there isn’t nearly the excitement.”
Freeport has spent about $600 million to rebuild the mine
and mill, with another $150 million or so to go before production can resume.
The price of moly will likely determine whether the Climax
Mine resumes production next year. In late June, the mineral was selling for
$15.18 a pound, down from $34 in the summer of 2008. Demand has grown; high energy prices mean more drilling and
a greater demand for corrosion-resistant moly-alloy steel. And lighter cars
that get better gas mileage use more moly alloys for their frames and bodies.
Further, China — the world’s leading moly producer — has
declared molybdenum a strategic metal. The government began restricting exports
this year.
So the portents are promising, and not just in Leadville. In
British Columbia, Thompson Creek Metals is expanding its Endako moly mine with
a larger mill to raise output from 12 million pounds a year to 15 million.
At Climax, industry experts estimate the production cost at
$5.50 a pound, with the company planning to produce 30 million pounds a year
initially.
Like editor Martinek, Leadville Mayor Bud Elliott welcomes
the return. Not only does it mean a bigger payroll in town and a boost to local
enterprises, he says: “It’s our identity. We’re a mining town, always have
been. ”
But even if production resumes as scheduled, it won’t be the
same as back in the “Shining Times” of the 1970s when Climax was hiring 100 men
a week. (Turnover was always high among the 3,200 workers.)
“That was a union shop,” Elliott notes, “and wages and
benefits were quite a bit higher, when you adjust for inflation, than they will
be this time around.”
Although the Climax of yore did have some aboveground
open-pit operations, most of it was underground, worked by old-fashioned miners
in high boots and light-equipped helmets. When a big rock blocked a chute, it
was called a “hang-up,” and the absolute king stud in any Lake County taproom
was a “hangup man” — the guy brave enough to make his way up the chute and
drill and dynamite the hangup rock.
To keep production costs down, the resurrected Climax will
be entirely aboveground, more like a big quarry than a mine, and all the
supplies and output (concentrated molybdenum disulfide bound for a refinery in
the Midwest) will move by truck, as the rail line to Leadville has been put
“out of service” by the Union Pacific Railroad.
This time
around, there won’t be nearly as many workers – roughly 400 instead of
3,200. In recent years, Leadville
has managed to get by with the help of tourism, students and faculty at its
Colorado Mountain College campus, federal cleanup spending and residential
construction. The town is within commuting distance of the big-league resorts,
and its real estate is more reasonably priced.
As Elliott points out, “We learned to live without a mine.
It should be better with one, but we’ll manage one way or another.”
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