TORONTO (miningweekly.com) – Molybdenum producer Thompson Creek Metals posted a small loss for the second quarter, but said it expects demand and pricing for the metal to improve over the remainder of the year.

Thompson Creek lost $0,4-million in the second quarter, compared with a $60,4-million profit a year earlier.

With molybdenum prices back above $16/lb, the company has approved the resumption of a mill expansion at its Endako mine, in British Columbia, which was put on hold in December last year in response to deteriorating markets.

Molybdenum, which is used to strengthen steel, traded on the spot market above $30/lb during the first half of last year, but fell off sharply in October, bottoming at below $8/lb in April.

Thompson Creek responded by cutting capital expenditure and curtailing production levels, but the firm announced in June it had revised its forecasts for production and sales upwards to between 22-million and 26-million pounds of molybdenum, from previous guidance of 20-million to 24-million pounds, in response to a firmer market.

“The molybdenum price increase will have a positive impact on the company’s third-quarter financial results and it raises our confidence that a sustained recovery of the molybdenum market is under way,” CEO Kevin Loughrey said in a statement on Thursday.

Thompson Creek realised an average molybdenum price of $9,41/lb in the second quarter, but expects the figure to be higher in the second half of the year, the firm said.

The company produced 6,7-million pounds of molybdenum, about 10% more than in the first quarter, and weighted-average cash costs also improved quarter-on-quarter, to $5,21/lb.

Capital expenditure for 2009 is now expected to be $80-million, as a result of the Endako mill expansion.

The expansion project will raise the mill’s ore-processing capacity to 55 000 t/d from 31 000 t/d and reduce cash costs per pound of molybdenum produced.

Thompson Creek owns 75% of the mine, and Japan's Sojitz Corporation owns the balance.

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