Kennecott Utah Copper (KUC) is preparing to take advantage of the current demand for molybdenum by building its own Molybdenum Autoclave Process (MAP) facility.

During the past five years, molybdenum, typically a byproduct of copper production and used in metal alloy to enhance toughness, high- temperature strength and corrosion resistance in steel, has increased in price, going from about $3 per pound in 2004 to more than $30 per pound in today's market.

Rio Tinto, the parent company of KUC, will invest $270 million in the construction of a 250,000 square foot multi-building facility just north of the Kennecott refinery, located west of Magna in what once was known as Garfield.

"The benefit of the plant is that we improve recovery, so we'll be able to retrieve more molybdenum from our current resource," said Doug Stauffer, project manager of the new facility. "We'll be able to produce a higher purity material and we will also be able to produce a metal called rhenium, which is an additional metal that we don't current produce."

Since the early 1970s, when KUC shut down it molybdenum processing facility, it has sent its molybdenum in powder form to Mexico and Belgium for processing.

In the new MAP facility, KUC will be able to produce a higher quality of molybdenum by using a new process that was created by KUC.

"It's a newer technology. It's a different way of processing molybdenum. The conventional method is called roasting. This is not roasting, It's a hydrometallurgical process rather than a pyrometallurgical process. It's a Kennecott-patented process." Stauffer said. "What we will be able to do is to convert the molybdenum into a molybdenum trioxide, which is a salable material that people want. That will be done through this plant, through an autoclave, through leeching and then through crystallization to turn it back into a solid form. We'll produce powder and we'll be able to produce briquettes and we're going to continue to serve the technical-grade customers, or the metallurgical market that we serve now. But now we will be able to also serve the chemical-grade market, which is a higher purity material. The chemical market is mainly driven by use in catalysts in the oil refining industry. They use this catalyst to remove sulfur from fuel in the refining process."

Due to a tightening of government regulations around the world, more sulfur is being required to be removed from oil, a process that requires a molybdenum catalyst to accomplish. The chemical grade of molybdenum currently sells at about $33 per pound.

The new facility will have the capacity to produce 30 million pounds of molybdenum per year.

The new MAP facility will be built on approximately five acres along Highway 201. It will consist of an autoclave, a leeching area, a purification area, a a crystallization area and a drying, packaging and warehousing area. The facility will also include an office building, a laboratory and a maintenance facility.

The MAP design includes a number of energy conservation features and an environmentally responsible technique for producing molybdenum products. A steam recovery system will be included to capture excess steam from the autoclave for use in downstream processes. The recycle system will supply about 40 percent of the plant's thermal requirements and emit significantly less sulphur dioxide and carbon dioxide by processing molybdenum concentrate through MAP.

The molybdenum concentrate will be transported through a slurry pipeline from the Kennecott concentrator in Copperton to the new MAP facility using an existing pipeline.

"It goes with the ore from the mine to the concentrator then at the concentrator it is separated from the copper concentrate," Stauffer said. "The copper concentrate goes to the smelter for further processing and the molybdenum will go to the map facility."

The MAP facility will also make it possible for Rio Tinto to recover rhenium from its concentrate and become a secure long-term supplier. Currently, the third-party processors of KUC's molybdenum has had the processing rights to the rhenium.

In the past three months, rhenium has become a high-margin commodity with the average spot price of $4,300 per pound. KUC's MAP facility will have the capacity to produce up to 9,000 pounds of rhenium per year.

Rhenium is primarily used as an alloy in jet engine turbines, allowing designers to run the engines faster and hotter, which allows them to make the engines smaller and more fuel efficient.

"Kennecott invented the process to recover rhenium back in the 1960s and we actually had a facility at Kennecott to recover rhenium up until the 1970s and discontinued that," Stauffer said. "So we're kind of going full circle and going back and beginning that again."

Construction of the new facility is expected to begin in the fall and should be complete by June 2010, with the first products available by November 2010. – RedOrbit