Zhireken GOK may suspend production because of lower prices for molybdenum

As you know, Zhireken mining and processing plant is one of the elements of the structure of Russia’s largest producer, which produces ferromolybdenum — Closed joint-stock company «SMR».

Due to the fact that in the first half of this year, recorded a significant decline in world prices for molybdenum, this led to the fact that the plant began to reduce production of concentrate from the beginning of the first months of this year compared with the same period last year. The drop in concentrate production happened at twelve percent or 1.29 thousand tons in the first half of this year compared with the first half of last year, while the decline in ferromolybdenum production respectively decreased by fifteen percent.

The Ministry of industry of Russia has published the information that recently received a request from Zhireken mining and processing plant for the extradition of a commodity loan. Representatives of the company report that this need has arisen with regards to the fact that because of total reduction of prices for molybdenum in the world Zhireken mining and processing plant can be mothballed in the near future.

According to the representative of local authorities, the ultimate fate of Zhireken mining and processing plant is still not clear. Likely to happen so that the plant will preserve. But as the guidance of the factory and the local authorities, are doing everything they can to prevent the worst. And, according to local authorities, most likely, if from the state reserve will be allocated as commodity credit ferromolybdenum ore, the situation still can be corrected and save the Zhireken mining and processing plant from closing.

As representatives of Zhireken mining and processing plant, the global market is now formed quite a complex situation because if the market price of a kilogram of ferromolybdenum in the twenty-four dollar and real cost of production of such pounds is thirty-nine dollars is impossible long to maintain production at the normal level. And at the same time, they note, the local government is mentally prepared for the probability of full preservation of the plant and at the moment trying to evaluate the possibility of the presence of mining companies in the event of the reduction was to organize unemployed professionals.