TORONTO (miningweekly.com) - Phoenix-based Freeport-McMoRan Copper & Gold will cut molybdenum production at its Henderson mine, in Colorado, by 25%, in response to a "sudden and sharp" drop in prices for the metal and weak global economic conditions.

Freeport, the world's biggest producer of the metal, will also defer the planned restart of the Climax molybdenum mine, where production was previously scheduled to begin in 2010, and is reviewing production levels at its copper-mining operations.

The firm is preparing revised plans at each of its operations and may reduce output at some mines “in response to market conditions", the company said.

Freeport will provide an update on its revised operating plans in December.

The price of molybdenum, which is used to strengthen steel, averaged $33/lb for the first nine months of this year, but began a sharp decline in October and had fallen to as low as $12/lb on Monday.

"We are responding aggressively to the current market conditions which have weakened dramatically in recent weeks," CEO Richard Adkerson said.

At Henderson, which is a primary molybdenum mine, Freeport will reduce production by about ten-million pounds, and the group is also considering output cuts at mines where molybdenum is produced as a by product.

Freeport's decision to reduce production and delay the Climax mine, also in Colorado, follows an announcement by Thompson Creek Metals that it will defer the development of its Davidson molybdenum deposit, in British Columbia, Canada, because of market uncertainty.

"While FCX remains positive on the long-term prospects for the molybdenum business and the future of the Climax mine, the construction activities will be suspended," Freeport said in an emailed statement.

The group had spent about $150-million of the $500-million budget by the end of October, and has committed another $50-million in near-term expenditures.

When Freeport decides that market conditions are strong enough to resume construction activities, the project would be capable of starting up within a 12- to 18-month timeframe.

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