Generating Molybdenum and Value for Mexico

Wed, 10/21/2015 - 09:47

It is no small accomplishment to hold more than 30% of the world’s processing capacity for molybdenum and 70% for rhenium, yet Chilean corporation Molibdneos y Metales (Molymet) currently does so. As a corporation, Molymet focuses on the treatment and processing of molybdenum and related products. Its Mexican branch, Molymex, operates a molybdenum processing plant in Cumpas, Sonora. According to the International Molybdenum Association, 59% of the total mined ore of this metal is used for the creation of molybdenum grade alloy steels and irons, mostly as construction steel. Molybdenum significantly increases the hardness and durability of steels, increases high temperature and corrosion resistance, and improves machinery efficiency. About 22% of the mined molybdenum is used for creating stainless steel, while the rest is used for cast iron, superalloys, fertilizers, catalysts, or for chemicals. Rhenium, on the other hand, is a transition metal rarely found in nature, mainly used as a catalyst and in superalloys. With such a broad range of uses, it is no surprise that Molymet has invested over US$245 million to ramp up and diversify production at its Sonora facilities since it bought them.

Molymex began operations in May 1979 and was wholly acquired by Molymet in June 1994, marking the beginning of the latter’s globalization process. Molymex has been in full production and commercial operations since 1995. The Sonora office and plant are not only located in the most important mining state in the country, they also provide direct access to the US market. The plant’s installed roasting capacity is 30 million pounds of molybdenum a year. The company’s main business units are Own Sales, Tolling, Byproducts, Efficiencies, and Rare Earths. The Own Sales units focuses on buying molybdenum concentrates, such as molybdenite, and using its own technology for treating and processing these concentrates to produce a wide variety of products, ranging from molybdenum oxide to pure products. Tolling focuses on processing molybdenite from other companies for a fee, while the Byproducts unit focuses on recovering byproducts such as rhenium, copper cathodes, and sulfuric acid, which result from the roasting and oxidation process to which molybdenum is subjected. The Efficiencies unit is dedicated to applying its proprietary technology to reduce metallurgic losses and achieve metallurgic earnings in its processes. Finally, its Rare Earth operations are channelized through Molycorp.

In 2013, the total production of molybdenum oxide by Molymet reached 151.2 million pounds, with 28.3 million pounds coming in from its plant in Mexico. During this year, Molymex saw greater stability in its productive processes and an increase in the operating time of its installations; this led its Mexico plant to finish the year with net earnings of US$8 million. Furthermore, in 2013, Molymet completed its fifth and sixth bond issuance in the Mexican bond market, amounting to US$158 million. The capital was raised to refinance the debt of the company expiring in mid-2013 and to add to the company’s working capital. These issuances are in line with the company’s policy to maintain available lines of credit and its strategy to diversify its sources of financing. Moreover, in 2013, Molymet invested in the replacement of its dust collector at its homogenization silo, the replacement of its continuous emission analyzer, and the acquisition of solar panels, among other investments, at its Mexico plant.