The Endako molybdenum mine will be put on "temporary suspension" at the end of this month due to a weak market for the metal, the operation's majority owner, Thompson Creek Metals Company Inc., said Thursday.
About half of the mine's salaried employees will be let go, the company said in a press release, which will cost an estimated $1.7 million in severance packages.
Hourly employees were notified Thursday that their employment will be temporarily suspended in 60 days, meaning their last day on the job will be Feb. 17, and will remain so while the mine is shut down.
In mid-2012, a ceremony was held at the mine, 175 km west of Prince George, for the opening of a new $650-million mill that nearly doubled the daily processing capacity to 55,000 tonnes. The mine, then 42 years old, was expected to last another 18 years.
At the time, the mine was expected to generate $90 million to $100 million annually in economic activity such as direct wages, purchases and taxes for the region, according to the provincial government.
At the time directly employed 420 workers and provides indirect employment for an additional 600, according to the provincial government.
But a month later, a downturn in demand for the metal, commonly used to strengthen steel, led Thompson Creek to issued layoff notices to 29 temporary employees and 28 summer students.
In the press release issued Thursday, Thompson Creek chief executive officer Jacques Perron said the company had expected that operational improvements implemented this year "would have been sufficient to keep the Endako Mine operating profitably during this prolonged volatility in the molybdenum market, but as a result of the current and expected molybdenum price weakness in the near term, we have no other option but to place the mine on temporary suspension.
"We will continue to closely monitor market conditions and re-evaluate the status of the mine as market conditions warrant."
According to Platts - a trade publication specializing in the commodity conditions of metals, energy and petrochemicals - the price of molybdenum struck a low for the year of US $8.95-9.05 per pound in early December. When the new mill was opened in June 2012, the price stood at US$13, which in turn was down from US$17 the year before.
In an interview with Bloomberg a year ago, Perron warned Thompson Creek could suspend production at its two moly mines if the price drops to $9 per pound. The company's mine in Challis, Idaho remains in operation.
Fraser Lake mayor Dwayne Lindstrom called the news "devastating."
“The suspension impacts more than 350 employees and their families here in Fraser Lake," he said in a press release.
He said the community's council will meet with the provincial government and other community leaders to find ways to limit the impacts.
John Rustad, the Liberal MLA for Nechako Lakes, said a team is being put together to see how the provincial government can provide support for the workers and the community. A community meeting is a possibility, he added.
"If there is any positive news from that, it's that it hasn't announced that it's closing but that they will be looking for mineral prices to improve for an opportunity to reopen, but clearly the impact of this on the workers and the families and the community of Fraser Lake and surrounding communities will be very significant," Rustad said.
Denver-based Thompson Creek Metals holds a 75-per-cent interest in the mine and Sojitz Moly Resources Inc., a branch of Japanese conglomerate Sojitz Corporation, holds the remaining 25 per cent.
