Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
Freeport-McMoRan Inc is cutting molybdenum production at a key Colorado mine by half and “plans to reassess” operations at a New Mexico copper mine that has been temporarily shuttered due to covid-19, a spokeswoman said.
The steps come after Phoenix-based Freeport, the world’s largest publicly traded copper producer, said last month it would cut $1.3 billion from its budget as prices for the red metal plunged due to the global spread of the novel coronavirus, the virus that causes covid-19.
Freeport plans to cut output by 50 percent at its Climax molybdenum mine, spokeswoman Linda Hayes said in an emailed statement late Monday. Last year, the mine produced 17 million pounds of molybdenum, according to regulatory filings. The mine hold’s Freeport largest reserves of the metal, which is used to strengthen steel and make lubricants.
Freeport also is laying off 825 workers at its Chino mine in New Mexico, according to regulatory filings. The mine was temporarily shuttered last month after three workers tested positive for coronavirus. It may now be permanently closed.
“We are assessing future plans for Chino in conjunction with broad ranging cost reductions across the organization,” Hayes said in the statement.
Elsewhere, the company has “not experienced a significant outbreak of the virus in our operations,” Hayes said. Freeport operates the Grasberg mine in Indonesia, the world’s largest gold mine and second-largest copper mine.
Shares of Freeport rose 2 percent to $8.88 in line with broader markets.
(By Ernest Scheyder; Editing by Steve Orlofsky)
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