General Manager Kent Watson presents Thompson Creek’s future outlook to Challis area business, government and economic deveolpment leaders. Todd Adams photo

Since the molybdenum mine’s 2010 budget and operating plans were recently approved by the board of directors of parent company Thompson Creek Metals, local mine managers wanted to discuss current and long-term plans with city, county, economic development and other Custer County leaders, said Kent Watson, general manager.

A lot of activity is planned

for 2010.

While the mine plans to expand from 346 employees to 374, the new positions will be filled from among the 2,000 or so applications the mine already has received, said Linda Wanstrath, human resources and safety manager. Many will be technical jobs with on-the-job training for locals.

Managers can be picky in hiring and will continue to do background checks to screen out felons and do pre-employment drug and alcohol testing. Random testing will continue for employees throughout the year.

Economic impact

Thompson Creek Mine has a big impact on local and regional economies and is the flagship of the parent company. “We pride ourselves on being the leader for the company” in technology and overall performance, said Don Rowles, finance and administrative manager.

One out of every five jobs in Custer County and 44 percent of total wages and salaries were due to Thompson Creek according to a 2007 study, Rowles said. With a property tax bill of around $1.1 million, the mine and its employees accounted for 40 percent of the county’s total tax roll. Of the $77 million the mine spent in 2007, up to $27 million was spent in Custer and Bannock counties.

Thompson Creek had $150,000 in local philanthropy, including four, four-year-scholarships for Challis High School students at $1,000 per student per year. There are also two, two-year vo-tech scholarships.

The mine plans $52.6 million worth of capital additions for 2010.

Mine life

Thompson Creek updated its plan of operations in 2009 to expand the mine life from 2017 to 2025, Environmental Manager Bert Doughty said. A consultant is preparing an Environmental Impact Statement (EIS) on the new plan and a proposed land exchange with the Bureau of Land Management that would increase the mine’s current 2,500 acres by another 5,000 acres. That would allow expansion past the year 2025 and provide a buffer around the mine.

While people would lose some access to public lands in that area, they would gain access to 20,000 acres above the Broken Wing Ranch and four miles of Salmon River access, which is proposed for the land trade, Doughty said.

The mine is not expanding to avoid environmental regulations, he said. The interagency task force that was developed by Thompson Creek in the 1980s would continue oversight review of compliance and operations of the mine. The Idaho Department of Lands (IDL) would continue its leadership role on the task force after the land exchange with other state and federal agencies. The same environmental standards will apply. The Idaho Department of Lands will continue to hold the bonding for reclamation.

The BLM is now reviewing a notice of intent for the EIS and updated plan of operations. The public will have the opportunity to comment at meetings in Challis and Boise once it’s published in the Federal Register.

The public comment process is becoming a popularity vote, Doughty said, with federal agencies counting the number of comments pro and con, so it’s important that locals who support the mine give input when the time comes.

Highwall

Thompson Creek’s “superb engineering staff” has tamed the mine pit’s problematic east highwall and made conditions safe for employees with a $1.3 million radar system and other high-tech instruments that constantly monitor any movement, said Mine Manager Scott Montelius.

“We’ve been able to predict every failure” of the slowly-slumping highwall since the system was installed, Montelius said, allowing managers to move people and equipment out before any rock comes down. The radar shoots thousands of points every 15 minutes and sounds an alarm if it detects movement.

For the first time, workers will soon be able to strip overburden from both the east and west sides of the pit, which will be more efficient.

Cyprus had to shut down in the 1990s in large part due to a failure of the east highwall (plus poor market prices), Montelius said.

Exploratory drilling will be ongoing so the mine can find more ore reserves and hopefully extend its life past 2025, said Montelius. Some reclamation may begin after 2018.

Mill

Nothing’s really changed about the mill’s 1981 technology in the 27 years Mill Manager Greg Hurless has worked at Thompson Creek, except some pumping equipment has gotten bigger. 2010 is shaping up to be the biggest production year ever for the mill, Hurless said, with plans to mill about 10.2 million tons of ore and produce some 24.2 million pounds of molybdenum.

Big tires

Tires are one of the company’s biggest costs, with $6.4 million budgeted in 2010, said Wayne Simpson, maintenance and electrical manager. The 11-foot-tall, 7,000 pound, radial tires for the haul trucks skyrocketed into the range of $75,000 to $100,000 each recently, when domestic manufacturers couldn’t keep up with demand.

Due to the tire shortage, the mine bought another haul truck so it could get its hands on $162,000 worth of tires. The mine’s 200-ton capacity Caterpillar trucks cost about $2.2 million apiece.

Thompson Creek has a vocational scholarship program so local kids can come back and raise their own families in the Challis area, Simpson said. The mine has a great workforce, much of it homegrown and has little turnover. Payroll and benefits of about $30 million per year amount to nearly a third of the budget.

History

Watson said the market has seen steady growth since 1960 and is growing at a steeper rate of around 4 percent now because molybdenum is used in more applications. The biggest growth application should be in steel for the oil and gas industry.

Thompson Creek Mine’s replacement value is now a cool $1 billion, up from its initial value of $350 million, Watson said.

At the end of the two-hour breakfast and meeting, Watson opened the floor open to questions.

“Thank you, guys. You do a great job. We appreciate you,” Doyle Lamb said to applause from the crowd.