1989-05-12_REVISION - M1977493

• Permit No: M1977493
• IBM Index Class Name: REVISION
• Doc Date: 5/12/1989
• Doc Name: Appl. and Exhibits
• From: AMAX
• To: MLRB
• Type & Sequence: AM2
• Email Name: ACS
• Media Type: D
• Archive: No

•
INTRODUCTION
The Climax Mine ( "the mine" ) , straddling the Continental Divide
at Fremont Pass, is a molybdenum mine owned and operated by the
Climax Molybdenum Company ( "Climax" ) , a wholly-owned subsidiary
of Climax Metals Company, which is in turn a wholly-owned sub-
sidiary of AMAX Inc . The mine , previously one of the free
world 's largest primary producers of molybdenum, has been in
generally constant production since 1918; almost seventy years.
During this period, Climax 's outright land ownership position at
the mine site has increased to approximately 12, 000 acres of
which 3, 372 acres presently are disturbed or affected as defined
in C.R.S. 34-32-103 ( 1 ) .
The mine presently operates under regular (C.R.S. 34-32-112 )
Mining and Reclamation Permit No . 77-493 ( the "permit" ) as
approved by the Colorado Mined Land Reclamation Board ( "the
Board" ) in 1977 and amended in 1980. At the time the permit was
approved and later amended, production at the mine was approxi-
mately 50, 000 tons per day from both underground and open pit
. operations. Proven and probable mineral reserves at the time of
approval of the permit were estimated at approximately 480
million tons with an estimated mine life extending beyond 2020.
Reserve and mine life estimates were premised on maintaining
then-current production rates, uninterrupted production sche-
dules for the life of the mine, and economics of the day. The
reclamation plan and its timetable as approved under the permit
was based on an optimistic forecast for molybdenum, molybdenite
mining, and metal mining in general. Reclamation is guaranteed
by a financial warranty in excess of $25 million based on a
final total affected area of approximately 11, 000 acres.
Beginning in approximately 1982, the world market for molybdenum
as well as many other metals went into a rapid decline. Large
world inventories glutted the market , and greatly decreased
demand put metal prices into a steep downward spiral (The molyb-
denum market, though somewhat improved, remains weak in 1989) .
Widespread and large scale layoffs occurred as primary metals
producers, including Climax, radically cut or curtailed produc-
tion and downsized their operations . The molybdenum mining
industry went into a true depression. During this period of
decline in the metal mining industry, the Climax Mine was forced
to lay off more than 3, 000 employees and reduce production
significantly. By early 1987, the mine had curtailed production
from the open pit and was producing exclusively from the higher
grade underground operation at a rate of approximately 6, 000
• tons per day. The mine suspended production activities alto-
gether in March 1987 but continued to actively operate portions
of the mill as well as the complex water management system. The
i