Grand County Henderson Mine & Mill workers await word about layoffs
November 11, 2008
About 100 full-time workers at Henderson Mine & Mill will be laid off because of the soft market for molybdenum, which could affect Kremmling, Colorado, residents as about 50 people from the town are employed there, officials said.Henderson Mine is located in Clear Creek County near Berthoud Falls, while the mill is in Grand County near Ute Pass. The majority of Kremmling residents employed at Henderson work at the mill. Two Henderson employees spoke to the Sky-Hi Daily News on condition that their names not be used.One Henderson Mill worker found out about the layoffs for the first time from the media. On Tuesday he said the layoffs were discussed by the companys vice president. The market and economy were mentioned as reasons for the layoffs.We didnt do anything wrong here, he said.Layoffs will occur at the mine and mill; there are three times as many workers at the mine. He does not know when layoffs at the mill will start.They havent said anything about numbers yet, he added.Countywide effectsAny cuts made at the mill will also hurt the rest of the county, said Grand County Manager Lurline Underbrink Curran.Theyre one of our largest taxpayers, she said. Any layoffs impact the county It especially hurts the West Grand School District.Another mill worker said the mood was sober after the announcement Monday.The workplace was not nearly as happy as when we went in for that announcement, she said. The mood has been very uncertain, she added. People who dont like uncertainty are having the hardest time.Her guess is that most recently hired employees will lose their jobs first. Some of the uncertainties might be revealed at a meeting in early December, she said.The second workers hope is that the company will make a comeback in the long term. However, with the holidays around the corner, the short term could be rough, she said.She said she does not know what the unemployment plan or severance pay will be. The $7 billion Wall Street bailout hasnt solved anything yet, she added. I think people are going to have hang on for a wild ride before things settle down again. Kremmling Mayor Thomas Clark hopes the layoffs dont have a large effect on residents and the town, especially if the majority of the layoffs take place at the mine.However, You cant have a mill without a mine, and you cant have a mine without a mill, he said. This year, the mill gave Kremmling less than $2,000 for severance taxes, and the town is budgeting less than $4,000 for next year. If the mill lays off people, future numbers could decline. However, Clark said the pellet plant, sawmill and new loggers coming to the area should help keep the economy in Kremmling on an even keel. Molybdenum prices plummetIn response to a sharp decline in molybdenum prices, Freeport-McMoRan Copper & Gold Inc. announced on Monday its plan to reduce production from the Henderson Mine and to postpone the restart of the Climax molybdenum mine near Fremont Pass between Summit and Lake counties.The changes to our plans will require us to make changes to our workforce, company spokesman Eric Kinneberg said in a statement released Tuesday. We estimate these changes to affect approximately 100 full-time employees. There will also be a reduction in the number of contractors at both Henderson and Climax. There are approximately 150 contract employees at Henderson and 450 at Climax.Kinneberg declined to detail the targeted workers titles, salaries and areas of residence. Henderson Mine owner Freeport-McMoRan (NYSE: FCX) plans to reduce its annual production rate at its Henderson primary molybdenum mine by about 10 million pounds. Slowing demand for molybdenum in the metallurgical and chemicals sectors during October, combined with weak global economic conditions and turmoil in credit and financial markets caused a precipitous decline in molybdenum prices in recent weeks. The Metals Week Molybdenum Dealer Oxide price declined from about $30 per pound in October to $12 per pound on Nov. 10.We are responding aggressively to the current market conditions, which have weakened dramatically in recent weeks, said Richard C. Adkerson, FCXs chief executive officer in a press release. These changes to our molybdenum production plans will allow us to reduce operating costs and capital spending, adjust our production profile to better match market requirements, preserve our valuable resources for anticipated improved market conditions and continue our long-standing tradition of providing customers with high quality molybdenum products and service. We have a positive long-term view for molybdenum markets and will be positioned to increase our production as market conditions improve.Molybdenum, a silver-white metal, is used to strengthen steel and as a lubricant, and it has seen increasing demand overseas in emerging markets and for high-tech applications such automotive air bags, computer heat sinks, light bulbs and fire-retardant plastics.World demand for molybdenum continues to grow; the long-term fundamentals are good, said Stuart Sanderson, Colorado Mining Association president. In the short-term, its very challenging right now because we have seen incredible volatility in the markets.Regarding Henderson mine, he said its important to remember that the company has been a stable employer since the mines opening in 1976. The mine is the largest primary producer of molybdenum in the world, according to the company. The mill and the mine, about 15 miles apart, are connected through an underground tunnel and the worlds longest conveyor, according to the company Web site. Katie Looby covers government and education for the Sky-Hi Daily News. You may reach her at 887-3334 ext. 19601 or firstname.lastname@example.org. Robert Allen from the Summit Daily News also contributed to this article, he can be contacted at (970) 668-4628 or email@example.com.