Editorial: Bloomberg funds anti-coal bandwagon

New York City Mayor Michael Bloomberg raised the ire of America’s coal miners and coal-dependent utilities in late July, with his US$50-million donation to the Sierra Club’s “Beyond Coal” campaign.

And he didn’t just quietly cut them a cheque. Bloomberg piled a hundred Sierra Club environmental activists, associates and media members onto a chartered boat on the Potomac River near Washington, D.C. to hold a press conference in front of a coal plant in Alexandria, Va., that environmentalists are trying to shut down. Fittingly, there was a “Code Orange” smog alert that day in D.C. – a warning that children shouldn’t play outdoors due to the poor air quality.

In his spoken words, Bloomberg made no mention of miners or global warming, but focused on the health hazards caused by burning coal, especially asthma among children, and he urged power utilities to shift from coal-fired plants to natural gas-fired plants, wind turbines and solar power. (Today, coal is used to generate about half the electricity used in the U.S.)

The Beyond Coal campaign seeks to close one-third of U.S. coal plants by 2020, reduce mercury pollution by 90% by 2020 and replace a majority of coal-fired power plants with “clean energy.” The Sierra Club credits itself with stopping the development of 150 coal-fired power plants across the U.S.

The American Coalition for Clean Coal Electricity responded with a statement that achieving Beyond Coal’s goal “would result in higher electricity rates for millions of Americans, fewer jobs and less competitive American businesses,” and that they believe “Americans wisely will reject that vision.”

The coalition further argues that, thanks to clean coal technology, major air pollutants from coal-fueled power plants are more than 80% lower per kilowatt hour of electricity generated more than 30 years ago.

• In a bullish sign for molybdenum, Freeport-McMoRan Copper & Gold has recommitted to achieving commercial production at its half-built Climax molybdenum mine in Colorado, after having suspended construction in November 2008 as moly prices collapsed during the global financial crisis.

Freeport already ranks as the world’s largest moly producer, thanks to output from its Henderson underground moly mine in Colorado, and large by-product moly credits at its Morenci, Bagdad and Sierrita copper mines in Arizona, and at its Cerro Verde copper mine in Peru.

During a conference call, Freeport president and CEO, Richard Adkerson, described Climax as “the best molybdenum project in the world,” but cautioned that the company would “phase-in production in a more measured way, than if we had US$30 per pound moly.”

Molybdenum was discovered at Climax in 1879 by prospector Charles Senter, who dutifully maintained the claims but died penniless decades later, because there was no use at the time for the strange metal. Moly was eventually recognized as extremely useful in metal alloys, and mining has been carried out at the Climax site off and on by various owners since 1915, with the last moly produced there in 1995. In its heyday, Climax produced three-quarters of the world’s molybdenum.

Freeport reports that construction of the latest incarnation of the Climax mine is 75% complete, and that it will cost about US$250 million to finish the job, which is slated for completion next year, when production is due to start. The company wants to ramp-up production at Climax to 20 million lbs. moly per year during 2013, and perhaps up to 30 million lbs. per year later, if moly markets are good. Overall, Freeport says it “intends to operate its Climax and Henderson molybdenum mines in a flexible manner to meet market requirements.”

Freeport expects its 2011 moly sales to total 77 million lbs., and it assumes a moly price of US$15 per lb. for the second half of 2011, after having realized US$18.13 per lb. moly in the first half of the year.

• The Chinese government had its own major moly announcement: that state geologists had discovered the world’s second-largest molybdenum deposit after Climax, in eastern China’s Anhui province.

According to China Daily, the Anhui Geology and Mineral Resources Bureau estimates the new deposit in Jinzhai County hosts 1.28 billion tonnes grading 0.157% moly, or 2.2 million tonnes molybdenum. The bureau’s head, Wy Yulong, said the deposit could be mined for more than a century at a rate of 10 million tonnes per year, and help “transform the backward county into an industrial hub.”

The discovery barely eclipses what had been China’s largest known moly deposit in Luanchuan County, in central China’s Henan province.