NEW YORK Kennecott Utah
Copper has not declared force majeure for its
molybdenum mining and processing operations, with the company
working through inventories and expecting to resume mining
within 10 days.
While the Rio Tinto Plc division
has declared force majeure for its copper operations
after an April 10 wall slide forced the company to suspend
mining at its Bingham Canyon facility (
amm.com, April 16), a company source emphasized to
AMM that force majeure has not been declared
for molybdenum production.
"We are evaluating moly, but we
havent made any decisions. Theres a real chance we
will not declare force majeure," he said. "We have
several options ahead of us in terms of both copper and moly,
and well be mining again probably in the next 10 days. We
have an inventory theyll be working through to produce
moly concentrate over the next seven to 10 days."
Kennecott will cover its
long-term commitments first, "so we wont be active in the
spot market for the foreseeable future," he added.
The majority of market sources
contacted by AMM said that molybdic oxide and
ferromolybdenum spot prices were unlikely to be impacted
significantly by the disruption to Kennecotts
"I dont think its a
problem getting material. Theres so much concentrate,
oxide and ferromolybdenum out there, and so few inquiries right
now," one trader said, adding that other players in the U.S.
market may try to capitalize on Kennecotts absence with
"Demand on the moly side is so
tepid, and I think the market has been slightly oversupplied,
so it will take some time to change," a second trader said.
The Kennecott source agreed that
free-market spot prices were unlikely to be affected. "There is
still a surplus in the market with or without Kennecott
online," he said.
However, a third trader said
that he does foresee an impact on molybdic oxide and
ferromolybdenum prices in the near-term. "Its a lot of
material being taken out of the hands of the most aggressive
seller in the market," he said.
Molybdic oxide was trading in a
range of $10.90 to $11.30 per pound when markets were last
assessed by AMM on April 11, while ferromolybdenum
prices were in a range of $11.90 to $12.35 per pound.