Henderson Mine closing next year

[dabaier]

Canyon Courier is reporting the Henderson Mine is closing sometime next year due to molybdenum prices being low. The mine plows the trail head for Jones Pass/Butler Gulch access. What will happen with this popular backcountry skiing area?

[Foggy_Goggles]

Link? They are one of the biggest employers in my community. I'd think meadow skipping would be pretty low down the list of priorities in the mine & mill close.

[hatchgreenchile]

First descent down Red?

[hawkgt]

http://www.denverpost.com/business/c...ff-200-workers

not good news for the community. that will hurt.

Edit: article does not say closing but lay offs. slowing production

[MakersTeleMark]

http://www.clearcreekcourant.com/con...own-five-years

Clear Creek County will lose nearly 70 percent of its property-tax revenue, about $24 million annually.

[dabaier]

WOW - 70%? That is going to have huge impacts. The article did say temporary layoffs, maybe they will pick things back up if prices rebound.

[adrenalated]

If Powder Addiction is still going strong by the time the mine closes, I would think that PA would begin plowing the road as I'm guessing they would have trouble getting permission from the county to drive their snowcats on the county road, and without access they're out of business.

[Foggy_Goggles]

Pump the brakes. When moly prices are low production shuts down. When moly prices are high production ramps up. Been that way for decades. Those articles assume someone has a crystal ball regarding resource prices.

Mines don't get to just "close". There would be required maintenance for generations. If I hear of any public meeting, I'll let you know so you make sure the decision makers understand the dire ramifications of not plowing the road.

[MakersTeleMark]

Those articles assume someone has a crystal ball regarding resource prices.

I don't really think the ball is necessary. Henderson doing a major downsizing, especially with the larger Climax mine just to the south, seems like a pretty safe bet.

[Foggy_Goggles]

Right. Grand and Clear Creek counties should start weening themselves of the mining revenue. That said, if moly prices rebound so will production. How this affects assessed values and property taxes, I have no idea. But hey, just what the trailer parks of Kremmling need, I bunch of unemployed miners smoking cigarettes in their trailers.

[xyz]

I'm a former employee of the mine; laid off after the last market downturn in 2009. The mine produces a single commodity, molybdenum, so its completely at the mercy of the moly price which is mostly out of their control. I believe back in the day though they were one of a few moly producers out there so they could actually impact the price by adjusting their output - but that's no longer the case.

Anyway, the mine is a huge financial contributor to the local community/school system and employs hundreds of local people. So yeah, road access for a handful of meadow skippers is the least of the communities concerns....

I highly doubt the mine will shut down in 5 years. If the moly price stays this low for 5 years, maybe, but I doubt it. The price will likely rebound in a year or three; commodities are cyclical. In the mean time, they will hunker down, lower production and cut costs to stay marginally profitable. That means layoffs unfortunately. Worst case in the short term is they will go on care and maintenance, which means production stops and they will just keep the mine on standby, keep the pumps running etc. They have massive reserves, that vary dependent on the price of moly so when the price rebounds they will likely extend the mine life for many more years.

[Franz]

Pump the brakes. When moly prices are low production shuts down. When moly prices are high production ramps up. Been that way for decades. Those articles assume someone has a crystal ball regarding resource prices.

Mines don't get to just "close". There would be required maintenance for generations. If I hear of any public meeting, I'll let you know so you make sure the decision makers understand the dire ramifications of not plowing the road.

Unfortunately, there's a million examples here in Wyoming of mine's just "closing" and the responsible corporations just walking away from any environmental reclamation or repair. Sure they lose their bond money but if the bond is low enough (set by state regualtors) they don't really care. Now granted, this is Wyoming, which is way redder and where our BLM is basically in the energy and mining corps pockets, so it could be totally different in CO.

Either way, Henderson Mine cutting back production like that is a big deal for Clear Creek

[MakersTeleMark]

I highly doubt the mine will shut down in 5 years. If the moly price stays this low for 5 years, maybe, but I doubt it. The price will likely rebound in a year or three; commodities are cyclical. In the mean time, they will hunker down, lower production and cut costs to stay marginally profitable. That means layoffs unfortunately. Worst case in the short term is they will go on care and maintenance, which means production stops and they will just keep the mine on standby, keep the pumps running etc. They have massive reserves, that vary dependent on the price of moly so when the price rebounds they will likely extend the mine life for many more years.

Agree 100%. The operation going dark is impossible. How the community is able to absorb the reduction in production is the question. Do they have the reserves to meet their current budget for a handful of down years, or will they have to trim and raise taxes to meet their obligations? Time will tell.

As for the Kremtuckyans, they will just move on to whoever wherever is hiring, which across all resources is not too many, if any, right now. Hope they bought extra cartons.

[dabaier]

I think assuming commodity prices stay low for 5 years is pretty short sighted. No one knows the answer to that. Same with any natural resource commodity.

[xyz]

Unfortunately, there's a million examples here in Wyoming of mine's just "closing" and the responsible corporations just walking away from any environmental reclamation or repair.

That's not going to happen in Henderson's case- that's old school and/or small mining company practice. But back in the day, the environmental standards were not as high and strict as they are now. The true impacts of mining in previous decades was an unknown. So in hindsight it appears as though mining companies just raped and pillaged but in reality they were following the current environmental guidelines. I know there have been a few exceptions, so save me the rant.

Henderson is owned by (for now at least!) Freeport McMoran, a large world-class mining company. When the mine is eventually exhausted, they will do the right thing and remediate the property to world-class standards. The remediation process will also employee many local people and continue to benefit the local community for decades to come.

[Franz]

What I'm talking about is more recent, like happening right now http://wyomingpublicmedia.org/post/c...llions-cleanup

However, that being said as I stated above Wyoming is about as red as red can be and pretty much sucks the balls of whoever wants to mine in the state. Hopefully, the Henderson isn't one of the self bonded ones in CO mentioned in the article.

[MakersTeleMark]

Freeport McMoran would never do that, or be able to get away with anything. And that deposit, at some time or another, will be pumping out ore for many many years.

Production began in 1976, and, on Jan. 4, 2010, the workers mined the billionth pound of molybdenum. In 2006, remaining ore reserves were estimated to be 500 million pounds of recoverable molybdenum.

[Soups]

Yeah. No one is jumping ship.

I think between Climax and Henderson those are some of the biggest high quality Moly reserves in the world. Prices fluctuate and will bounce back.

[adrenalated]

I think assuming commodity prices stay low for 5 years is pretty short sighted. No one knows the answer to that. Same with any natural resource commodity.

I don't foresee a big rebound in molybdenum prices though. The primary use of molybdenum is as an alloying element for high-strength steels, and aluminum is increasingly replacing steel, especially in the automotive industry (which accounts for about 1/4 of the steel use in North America). I don't see that trend changing anytime soon.

[MakersTeleMark]

https://en.wikipedia.org/wiki/Hender...oor_recreation

[Soups]

I don't foresee a big rebound in molybdenum prices though. The primary use of molybdenum is as an alloying element for high-strength steels, and aluminum is increasingly replacing steel, especially in the automotive industry (which accounts for about 1/4 of the steel use in North America). I don't see that trend changing anytime soon.

It'll bounce back once World War III gets into full swing. It'll be back open in no time

Also, high strength steels are used more in buildings and infrastructure. I'm sure the automotive industry angle does matter some, but if we would update our failing infrastructure anytime soon that could help reverse the trend.

[adrenalated]

It'll bounce back once World War III gets into full swing. It'll be back open in no time

Also, high strength steels are used more in buildings and infrastructure. I'm sure the automotive industry angle does matter some, but if we would update our failing infrastructure anytime soon that could help reverse the trend.

Hah, agreed on both points.

[Name Redacted]

The drop in the price of crude oil means that fewer oil platforms are being built, which reduces the demand for steel significantly as well.

[Harry]

When the mine is eventually exhausted, they will do the right thing and remediate the property to world-class.

BWAHAHAHAHA !!

No way.

[Soups]

BWAHAHAHAHA !!

No way.

They are already doing it up at their old Climax tailing ponds.