Chevron Mining has permanently closed its Questa molybdenum mine, citing low market prices and increasing operational costs.
The closure was announced at an employee meeting Monday morning (June 2). Mine officials say the closure included about 300 layoffs. Employees will be paid and receive benefits for 60 days, as required by federal law.
"It's really an economic decision," said David Partridge, president and CEO of Chevron Mining, in an interview outside the mine's mill site Monday.
Partridge said the Questa mine is nearly 100 year old, meaning the highest quality, easy get to ore was extracted long ago. Recently, the only mining happening in Questa was underground, which is expensive — both in terms of getting miners to the ore and getting it out to be processed.
In the face of stagnant market prices and increasing competition from other mines across the world, the Questa mine has become virtually obsolete, according to mine officials. Partridge said the final decision to shutdown was made at the end of April, when officials quietly began plans to announce the closure.
"We're not in a position to be a cost effective producer anymore," Partridge said. "In fact, we're the highest cost producer in the world in terms of the global market."
Difficult mining conditions aren't the only challenge the Questa mine has faced. In 2011, the mine and its nearby tailings facility were declared a Superfund site by the Environmental Protection Agency. A year earlier, the agency proposed a massive cleanup plan to reduce mine-related water contamination. The cleanup is expected to cost about $800 million.
Partridge said Monday the EPA-mandated cleanup will continue, including the decommissioning of nine miles of tailings pipes and the tailings facility west of Questa. Partridge said the cleanup cost was not a factor in the decision to close the mine.
"The mine stands on its own as far as an economic decision," Partridge said.
Questeños working at the mine are accustomed to the boom-and-bust life cycle of the mining industry.
In 2009, Chevron Mining laid off 227 workers after the market price of molybdenum plummeted. The mine has since curtailed ore extraction and has done limited milling while hoping the price would rebound.
But it hasn't, and Partridge said there were not indications that it would bounce back in the foreseeable future.
He said this bust would be the last for Questa.
"We've told [the employees] this is final closure of the mine and we're going into full reclamation of the mine," Partridge said. "We don't believe we'll reopen again."
However, closure of the mine and the ongoing reclamation work could be the silver lining for some workers who got a pink slip Monday.
Partridge said miner closure, including the demolition of mine structures, would likely take one to two years. The full mine reclamation will likely take decades.
All told, Partridge said there would be about 100 jobs available to Questeños doing that kind of work. The company will hold job fairs in Questa in the coming weeks to help laid off workers find a new position, either locally or at mines elsewhere.
Questa mayor Mark Gallegos told The Taos News the mine's closure was obviously going to be hard on families and businesses in the community, but he said the cloud of a possible shutdown always hangs over the village. "It's a tough pill to swallow, but at the same time, with the ups and downs Questa has had to go through before, it's just made our skin a little thicker," Gallegos said.
The number of workers employed at Questa's molybdenum mine has risen and fallen drastically over the last three decades, as this data from the Mine Safety and Health Administration shows.
Gallegos said he hoped the permanent closure would be an opportunity for Questa to reinvent itself and diversify. Chevron has offered its help in doing so.
In 2008, Chevron created an economic development fund to help the village prepare for a "post-mining economy." The company initially pledged more than $2.5 million to the fund, and Chevron says it will extend those payments to include another $2.5 million over the next eight years.
Find more coverage in the June 5 edition of The Taos News.