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Thompson Creek seeks moly price recovery

Keywords: Tags  Thompson Creek Metals, quarterly earnings, molybdenum prices, molybdenum production, Kevin Loughrey, molybdenum, Thompson Creek Mine, Daniel Fitzgerald

NEW YORK — Molybdenum prices won’t improve without an economic catalyst to boost global demand, and Thompson Creek Metals Co. Inc. is unlikely to resume stripping at its namesake mine until prices improve, chairman and chief executive officer Kevin Loughrey told AMM.

Loughrey acknowledged that falling molybdenum prices had hurt Denver-based Thompson Creek’s first-quarter earnings, leaving the company vexed (, May 9). “It is very frustrating, but you wouldn’t find a person here who is surprised,” he said. “It’s a mining business. We sell a commodity over which we have no control in the price, so you just have to put your nose down and do the best you can.”

While Loughrey does expect pricing to improve in the near future, “when exactly things will improve is beyond the capabilities of my myopic crystal ball,” he said.

“What’s holding back the moly market in terms of pricing is weakness on the demand side. We had anticipated growth year over-year, but that additional moly consumption in the main just hasn’t happened. So you’re in an oversupply situation,” he said. “Consequently, you end up with very little moly being traded in spot markets and it stagnates. We need some catalyst in the world economic engine to bring demand back up.”

The drop in molybdenum prices over the past year is also likely to prolong the suspension of stripping activity at the Thompson Creek Mine, which began in October 2012 (, Oct. 3).

“Right now we’re making good money at Thompson Creek despite the fact that prices are low, but we’ll run out of ore at the end of 2014 if we don’t recommence stripping. We need a price better than (the current one) to recommence stripping, but it’s not just the price. We also would need a sense that the price will move ahead for a while. If we don’t do that, by 2015, we’ll be in care and maintenance,” he said.

AMM’s molybdic oxide price is currently in a range of $10.90 to $11.30 per pound.

Meanwhile, Loughrey said that the company is continuing the search for his replacement as chief executive officer ahead of his retirement (, Nov. 9). He recently agreed to remain as chairman for an additional year.

“So far it hasn’t felt like I’m in the course of retiring. The effort to find a replacement CEO is moving: There has been a board subcommittee formed that will do some interviewing soon and start coming up with a shortlist, so I think in the late third quarter or early fourth quarter we should see something there,” he said.

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