The lay offs are expected to take place in late January, 2008 and will impact roughly two-thirds of the workers at the mining and milling operation.
The lay offs will have a significant impact on the economies in San Juan County and beyond. The operation attracts a workforce that relies heavily on areas outside San Juan County, including Grand County in Utah and Dolores and Montezuma counties in Colorado.
Local officials seemed suprised by the announcement, saying that they knew that the project was having trouble finding enough employees but having no idea that the mining operations may cease.
Apparently, it was not the lack of a work force, but lower than anticipated output by the mill’s leach field that contributed to the decision to close the mining operations.
Despite a number of initiatives to increase the leach recovery rate, the decision was made to move the operation to leach only.
Approximately 11 million tons of ore has been mined and placed on the leach pad. An additional 900,000 tons of ore will be mined and placed on the heap before the mining operation is curtailed.
Constellation Copper Corporation, the owner of the Lisbon Valley Mine, apparently entered into a forward sales contract and was unable to meet the production rates outlined in the contract. Constellation officials state that the company is evaluating financing alternatives, including negotiations with the forward sales contract party. They report that these negotiations are “progressing positively.”
Copper prices continue to exceed $3 a pound. In contrast, copper was less than $1 a pound ten years ago, when the project first received its approvals from the federal government.