Japan’s Sumitomo Corporation (SC) and Sumitomo Metal Mining (SMM) have announced that they are reviewing their strategic options with regard to their respective stakes in the Sierra Gorda copper-molybdenum mine in Chile. SC holds a 13.5% stake in the operation, while SMM holds a 31.5% stake. The balance is owned by polish group KGHM, which has said that its current strategy to 2023 does not assume any change in its involvement in Sierra Gorda. Moreover, KGHM has added that it will continue with optimisation efforts that are aimed at enhancing Sierra Gorda’s value.
The Sierra Gorda mine was commissioned in 2014. The facility was expected to produce 50Mlbs/y (22.8ktpy) of molybdenum in its first five years of operation and 25Mlbs/y (11.4ktpy) thereafter. Production never reached those expectations, however, with peak production of 36.6Mlbs (16.6kt) in 2016. Sierra Gorda’s molybdenum mine supply stood at 20.5Mlbs (9.3kt) in 2019. Sierra Gorda’s shareholders are also working on an Integrated Plan comprising new scope of work, schedule and costs, involving optimisation of the production process and increasing throughput of sulphide ores. If SC and SMM sell their holdings, any new shareholder would have to participate in the financing of this new plan.
Roskill’s Molybdenum: Outlook to 2030, 16th Edition report was published in August 2020 and outlines industry trends and forecasts for the next decade. The report forecasts molybdenum supply, demand and prices. Click to download the brochure for the report, or to access further information.