Thompson Creek molybdenum mine may be restarted as prices rally
Dual-listed Centerra Gold is considering restarting its Thomson Creek mine, in Idaho, as a supply squeeze has sparked a rally in the price of molybdenum – a metal that is used to help toughen steel.
The molybdenum price has more than doubled in recent months, driven by a series of supply disruptions and growing demand from the renewables and military sectors. The price surged from about $15/lb in August 2022 to $38/lb in early February 2023, creating a positive price environment for molybdenum miners.Centerra plans to issue a prefeasibility study on the Thompson Creek mine in the third quarter of the year, the company said last week.
The mine and concentrator were placed on care and maintenance in December 2014 when the mining and processing of Phase 7 ore was completed.Besides the Thomspon Creek mine, Centerra also owns 75% of the Endako molybdenum mine, in British Columbia, and the Langeloth facility, in Pennsylvania. The Endako mine remains on care and maintenance.
The company will spend between $30-million and $35-million on care and maintenance at the two molybdenum mines this year.
Centerra reports that it has streamlined operations at the Langeloth facility to operate with lower inventory levels on hand. The recent run-up in the molybdenum prices in excess of $30/lb results in additional cash outflow being required to purchase and maintain the same inventory levels, while finished molybdenum products will also ultimately be sold at these higher prices.
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