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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (44546)	10/6/2009 1:43:19 PM
From: LoneClone	Read Replies (1) \| Respond to of 194643

Kennecott discovers massive molybdenum deposit Bingham Mine » There could be 500M tons of the silvery metal ore.» By Steven Oberbeck The Salt Lake Tribune Updated: 10/05/2009 06:20:37 PM MDT sltrib.com Kennecott Utah Copper has discovered beneath its Bingham Canyon Mine what may be the world's biggest deposit of molybdenum, a shiny, silvery metal that is used to strengthen steel. Although the company's open-pit mining operation that sits on the eastern slope of the Oquirrh Mountains already is scratching the surface of the estimated 500 million ton deposit, the highest-value ore lies approximately 1,500 feet below the pit bottom. And that means it may be years, if ever, before the rich deposit can be fully exploited, said Kennecott's spokeswoman Jana Kettering. "We're still early in the evaluation process. The feasibility of developing a mine to extract (the ore) has not yet been established." Still, Kennecott parent company Rio Tinto already has signaled it anticipates that molybdenum will play an increasingly important role in the Bingham Canyon Mine's future revenue stream. Just more than a year ago, Rio Tinto announced plans to invest $270 million to build a facility to more deeply process and refine the molybdenum ore recovered at the Utah mine. And it indicated the project was expected to increase by 15 percent the mine's annual output of around 30 million pounds, or another 4.5 million pounds a year. The project was originally set for completion in 2010, but construction has been delayed while Rio Tinto works to pay down its corporate debt, Kettering said. "We're still moving forward slowly on the engineering, but the decision to begin construction will depend on the economic environment." Molybdenum is used in the production of stainless steel and high-temperature alloys," said Siva Guruswamy, a professor of metallurgy at the University of Utah's Department of Metallurgical Engineering. "Demand for molybdenum has increased dramatically over the past few years due to the increased production of steel in China and other developing nations," said Guruswamy, who anticipates demand will pick up as the worldwide economy recovers from the recession. The price of molybdenum, which is primarily recovered as a byproduct of copper, has more than doubled to around $17 per pound in recent months, although that figure is still much lower than the high of around $34 per pound reached in 2008. Pablo Bascur, a Chilean molybdenum expert, told Reuters in an interview last month that the price could face some short-term volatility as China turns from a major producer to an importer of the metal. And he suggested China's stockpiling of the silvery metal could keep prices from finding their footing. "I hold the view that we will continue to see high volatility in at least the next three quarters because this stockpiling will take some time," he said steve@sltrib.com