2001-02-21_REVISION - M1977493 (4)

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• AFFECTED LANDS EXCHANGE Phelps Dodge Corporation; Climax Molybdenum Company, Climax Mine Permit#M-77-493 1.0 INTRODUCTION The Climax Mine (Climax) is a molybdenum mining and milling operation wholly owned and operated by the Climax Molybdenum Company (CMC),which is a wholly owned subsidiary of Phelps Dodge Corporation. The operation is located in the historic Ten Mile Mining District completely within a private land block of approximately 14,000 acres straddling the Continental Divide at Fremont Pass. The mine, once one of the world's largest primary producers of molybdenum,was generally in constant operation from about 1917 until the mid-1980s. The Mining and Reclamation Permit (Permit) required under the Colorado Mined Land Reclamation Act of 1976 (Act) was approved by the Colorado Mined Land Reclamation Board (MLRB) in late 1977 (Permit M-77-493). Subsequently, the Permit was formally amended in 1980 (AM-001), 1989 (AM-002), and 1997 (AM-003). In addition, nine Technical Revisions (TR) to the Permit have been approved by the Colorado Division of Minerals and Geology (DMG). Two other TRs, the groundwater monitoring plan and the Environmental Protection Plan (EPP), continue to be reviewed by DMG while Climax complies with the intent of both. Thus, this proposed revision is considered TR-12. However, as an Affected Lands Exchange revision, it is handled as an amendment relative to public notification procedures. As such, Climax agrees that the timelines for the amendment process rather than the TR process will govern processing of this application. The DMG application is found in Appendix A. The history of Climax is well documented. Briefly, molybdenite was discovered on Bartlett Mountain in 1916. With the start of World War I, the ore body was developed by underground techniques and production initiated. The mine closed briefly following the war, but opened again in the early 1920s. Both production and the facilities grew for approximately 60 years, reaching a production peak in the late 1970s of approximately 50,000 tons per day of ore from both underground and open pit operations. At the peak, Climax employed more than 3,200 people. Beginning in 1982, the world molybdenum market went into a rapid decline. Production was curtailed causing widespread and large-scale layoffs and facility shutdowns. Climax ceased production and reduced its workforce by more than 3,000 during the early to mid-1980s. By early 1987, the mine was producing at a low rate exclusively from the higher grade portions of the underground facility. Production operations were curtailed later in 1987. At that time, 2