Leadville, an old Colorado mining town, may resume mining

  • The Climax Molydenum Mine in central Colorado held a job fair in February, and is gearing up to reopen, market conditions permitting

    Courtesy Robert Moran
 

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.”

Randy Albright
Randy Albright Subscriber
Jul 17, 2011 02:29 PM
I doubt Freeport McMoran will be good for Leadville or Colorado, check their environmental and human rights records in Indonesia and other locations where they operate, it is quite dismal.
Ronna Sommers
Ronna Sommers
Jul 19, 2011 03:06 PM
Such a beautiful place, it haunts my dreams.. Why would any blockhead want to foul it for money ...?? Is there no one among us, who is smart enough to develop ways that DON'T RUIN AND EXPLOIT OUR ENVIRONMENT...AND PEOPLE...?????
Christopher Reed
Christopher Reed
Jul 20, 2011 11:15 AM
I have worked for Freeport (Henderson Mill) and I will tell you that they are very committed to the environment. They have won awards for the design of the big conveyor belt in the Ute Pass area. The land they own is cleared of beetle kill and is much healthier than surrounding Forest Service land. All kinds of wild life is on company property (moose,coyote,elk,deer,birds etc) Mill water is continually recycled. Top soil is stock piled for reveg projects. All permitting requirements are followed carefully. Tailings and waste dumps are monitored and reclaimed.

Over at Climax (the subject of the story) a state of the art water treatment plant is used to treat water from the site. Even though the mine has been mothballed, a full Environmental Staff has been on site for the whole time ensuring all permits are adhered to.

These are good jobs-Leadville needs jobs. Have you ever lived there?? I have and it is depressing seeing this once proud town DYING and being overtaken with illegals.

Do you use Moly??The truth is is that many minerals occur in locations such as the Rockies. Times are different now, and Environmental laws are strict. Not only can the mine be shut down, it can be CLOSED for violating permits. When a mine gets permitted closure is part of the process-reclamation is occurring while mining is taking place.

Yes to some mines are ugly-but as far as a total percentage of disturbed land, it is MUCH less than all of the ugly condo/cookie cutter housing in Summit/Eagle County. Before you condemn the reopening of Climax, walk a mile in the shoes of Leadville people.
Randy Albright
Randy Albright Subscriber
Jul 20, 2011 12:17 PM
Sounds to me like you are shilling for the mining company.

As the largest producer of rock phosphate fertilizer in the US, Freeport McMoran has dumped an unknown amount of radioactive waste from fertilizer production into the Mississippi River upstream from New Orleans' water intakes.

Their dismal environmental and human rights record in Indonesia is public record.

They will likely comply with US environmental regulations in Colorado by doing the bare minimum, and the mining industry is notoriously underregulated to begin with.

Here are just a few of the many web links to the history of Freeport McMoran and their human rights and environmental abuses:

http://www.endgame.org/freeport.html
http://www.etan.org/news/kissinger/themine.htm
Christopher Reed
Christopher Reed
Jul 20, 2011 01:58 PM
No shilling (fisrt time being called a shill!!!), I am just an educated (BS Chemistry, Natural Resource Management) worker who sees the need for balance-I gave my opinion based on what I experienced working for Freeport. They go above the bare minimum in CO, which is why they received Green awards from the State and the Feds. Oh but they are most likely Shills too.

I think that Freeport is pretty committed to doing things the right way these days.

We need the jobs, we need the Moly (one of the few things China buys from us).
You still need to walk a mile in a Leadvilte's shoes before you make a blanket statement that FP won't be good for Leadville. Yes I used to be an anti mining environmentalist until I actually started working in the industry and saw how much the modern mining industry has changed from the old days. And those that discount the importance of having a good job, probably have one already. I am still an environmentalist but see the need for balance. I happen to think that current regulations are pretty stiff, and big companies like FreePort go above and beyond the bare minimum because they have so much to lose. I have worked in Env Depts at several mines, and I will tell you they call all the shots. Not sure about Indonesia, but that is how it works here now days. The people in Leadville are very excited about Climax reopening including many of my old friends.

Randy Albright
Randy Albright Subscriber
Jul 20, 2011 02:27 PM
It's still mining, which has significant environmental impacts no matter how good your compliance record is; and although mining companies may be better at environmental compliance in the US today than they were in the past, they still have a long way to go.
Stephanie Paige Ogburn
Stephanie Paige Ogburn Subscriber
Jul 21, 2011 08:02 AM
A comment on this thread has been deleted because it is not related to the content of the article. Please follow the High Country News comments policy (http://www.hcn.org/policies/comments-policy) when making comments on articles.

-Stephanie Paige Ogburn, online editor
Ray Ring
Ray Ring Subscriber
Jul 21, 2011 12:51 PM
Here's a classic HCN essay on the differences between Leadville's mining-town era and the ski-resort-suburb era, written by a longtime local -- http://www.hcn.org/issues/241/13608/ ...
patrick beres
patrick beres
Jul 30, 2011 06:09 PM
THE CLIMAX mine is not and was never served by the Union Pacific Railroad. The Burlington Northern Santa Fe will decide if they want the business.
patrick beres
patrick beres
Jul 30, 2011 06:15 PM
If he is not "shilling" for the mining company I am. I'm a former underground miner, geologist, underground surveyor and mine reclamation specialist. climax always had the best mine reclamation in the mining business.
  And yes everyone reading, writing, this article uses Molly, everyday, in your cars, knives, woodworking tools, marriage rings, jewelry, all metals, screws bolts, fuels, chainsaws, agricultural chemicals and fertilizers--so you cannot say you don't use it unless you go back in time to the 1870's and drive a two horse team to work and use wood cook stove to keep warm and cook your food.
patrick beres
patrick beres
Jul 30, 2011 06:17 PM
I worked for Freeport Gold and I find that Freeports enviro record is only poor in Malaysia due to the wayward government there.
patrick beres
patrick beres
Jul 30, 2011 06:22 PM
In answer to: "Such a beautiful place. Why would any blockhead want to foul it for money ?' Because You can't move the ore deposit to the middle of an industrial complex or downtown Denver.
Alita Hampton
Alita Hampton
May 10, 2012 02:48 PM
I am doing A CHEMISTY reasarch project on this mine. Yes there are things that need to change, but really they are making it cheaper for some companies to make concrete. I think that if they are going to get a second chance at reopening , then they need to get a system to help reduce the amount of Acid Mine Drainage. This is the only thing that I think that they should consider before opening.
Jim Havins
Jim Havins
Aug 05, 2012 09:42 AM
Leadvile is a beautiful area but the location of the pit is not. It sits right of top of the block cave area of the old underground mine. For the most part, the pit area will be unviewable from any place except from Mt Bartlett or from a plane. I can't see Freeport openning the mine, though, last I read the Henderson Mine was at about half capacity. With today economy in the toilet, I can't see this happening.
Chris L Reed
Chris L Reed Subscriber
Aug 15, 2012 04:12 PM
To Jim Havins: You are wrong. Climax is back in production! I am happy for my Leadville friends!!
http://www.summitdaily.com/[…]/120809814re
Jim Havins
Jim Havins
Aug 15, 2012 05:32 PM
I hope it's not short lived, the area could use the boost to the economy although it won't be anything like it ws when I worked there in the 1970's. It would be interseting to me to look at the mine design plans since I was involved in the open pit design but the altitude is just too high for me. I wish them the best of luck.