Centerra Gold announced that it is considering restarting its Thompson Creek molybdenum mine in Idaho, USA.

Molybdenum prices surged over 2022, contrasting with most commodity market trends facing tough economic headwinds. The rise started during the tail-end of 2020 and as of February 2023, prices have topped their previous record achieved in 2005.

Over 70% of molybdenum supply is sourced as a by-product from copper porphyry deposits. In 2020, when the COVID pandemic struck, copper supply was able to perform relatively well and this meant molybdenum supply continued to be churned out despite weakening demand from the pandemic. Then when demand recovered in 2021, copper mines in South America struggles from disruptions, which swung the molybdenum market from surplus into deficit. This deficit worsened over 2022 with further declines from copper mine in South America, which has underpinned the tight molybdenum market and soaring prices to record levels.

Centerra Gold’s Thompson Creek mine is a primary molybdenum deposit, which was put on care and maintenance in end-2014. While copper mines account for cost competitive molybdenum supply, Project Blue’s forecast sees primary mines offering the larger upside in supply growth over the 2020s, however, this is largely expected from a single project in China. The current high prices will ignite some fires for operations and projects to be dusted off, but the potential for by-product molybdenum to recover in line with copper supply in Chile and Peru puts a time limit on the opportunity.