Idaho General Mines Inc. is pursuing a potential mother lode in Nevada. Not gold or silver, but an industrial metal called molybdenum.
Molybdenum is a key ingredient in stainless steel. Rapid industrialization in China and India has pushed up world demand and sent molybdenum prices to $30 per pound.
But the metal barely registered with Bob Russell four years ago. A mine manager who’d worked on three continents, Russell was looking for new properties to revive Idaho General, an inactive mining firm. He was thinking conventionally: Copper. Silver. Gold.
A geologist sold Russell on a molybdenum deposit near Eureka, Nev. Now, Russell’s Spokane-based firm hopes to permit one of the U.S.’s largest primary molybdenum mines.
The Mt. Hope Mine would cost $600 million to $700 million to build, according to company estimates, and churn out about 44,000 tons of molybdenum ore daily.
Production is at least three years away. The Bureau of Land Management has just begun an environmental impact statement for the proposed open-pit mine. They typically take 18 to 24 months to complete, said Angelica Ordaz, a BLM planning and environmental coordinator. Idaho General will also need permits from the state of Nevada. And constructing the mine itself would take another 20 months.
But Russell was optimistic last week as he displayed a shiny hunk of molybdenum in his office. He rattled off uses for the metal. (Molybdenum melts at 4,700 degrees, which makes the metal a component in furnaces and jet engines. Petrochemical plants depend on the metal’s anti-corrosive qualities.)
“We have the metal of the age,” Russell said. “Moly’s time has come.”
So, it would appear, has Idaho General’s.
The junior mining company incorporated in 1925, but has been inactive for most of its life. Russell’s father-in-law was a past president. When Russell decided to start up a mining company, he used Idaho General for a shell.
In last four years, Idaho General has raised $60 million, hired a 15-member staff and acquired interests in six molybdenum properties. The company’s shares moved from the pink sheets to the American Stock Exchange.
In the Northwest, the firm is best known for a controversial lease application to do exploratory drilling for copper and molybdenum near the Mount St. Helens National Volcanic Monument. The land proposed for leasing was acquired by the Forest Service in 1986 from the Trust for Public Lands, a nonprofit that buys land to protect it from development. Environmental groups have launched fierce opposition to the drilling.
That project, if it ever materializes, is years away, Russell said.
Mt. Hope is the company’s best prospect, he said. Most molybdenum is mined as a byproduct of copper production, which makes the Mt. Hope project unusual in that molybdenum would be the primary mineral extracted, Russell said.
Russell, 73, is a graduate of the former Idaho School of Mines, who earned his college money working in the Bunker Hill Mine in Kellogg. Later, he worked in management for the Bunker Hill and the Sunshine mines. He also spent time overseas, running copper operations in Zambia and Indonesia.
In 2003, one of his sons – Matthew Russell – talked him into joining a start-up mining venture. It wasn’t a hard sell. “I’ve flunked retirement twice,” Russell said.
Because of his background in running big mines – the Indonesian operation employed 8,000 people – Russell wanted an ambitious project. The Mt. Hope project caught it his eye because of the extensive past drilling done on the deposit.
The only reason it hadn’t been mined, Russell figured, was because it was a molybdenum deposit. Prices for the metal had peaked and tanked twice. He wondered if molybdenum would continue to trade high.
Russell hired another son, Andy, an Arizona real estate developer, to conduct a study on molybdenum markets. Construction of the Alaska pipeline in the 1970s, for instance, caused molybdenum prices to spike, then fall, Andy Russell said. But more recent trends show a steady consumption growth, which convinced Bob Russell that molybdenum was a good gamble.
Matthew Russell has since left the company, but Andy Russell was hired on last fall. Idaho General has also recently hired a chief executive officer, Bruce Hansen, a former Newmont Mining executive.
But Idaho General’s still largely a boot-strapping operation, said Bob Russell, who’s chairman of the board. His wife, Mary K Russell, is the company’s assistant secretary/treasurer.
“We’re excited about what happened to Idaho General,” she said.