The Revett Mining Company has announced it will close the Troy Mine next month.
Company officials made the announcement late Monday and said sliding copper and mineral prices made it unfeasible to keep the mine open. Ore production will continue until Feb. 1, at which point the mine will be placed into “care and maintenance” mode.
Revett CEO John Shanahan said the orderly shutdown would ensure that the mine could be reopened if and when prices return in the future.
About 80 people work at the mine, and only a half dozen will be kept on to maintain the site, Shanahan said.
Late last year the company said it hoped to hire more workers in 2015 as it ramped up to full production after a lengthy shutdown that started in late 2012 following a series of underground rockslides.
“This was a truly difficult decision because we have such a great and talented workforce,” Shanahan said. “We were confidant we would see copper prices continue to rise but the exact opposite has happened.”
Copper prices have slid downward over the last five years, but since November they have dropped to a price where it was not economical to keep the mine open, Shanahan said. In November, copper cost about $3.10 a pound; this week it cost about $2.60 a pound. Shanahan said the most recent drop was due, in part, to sliding oil prices.
In 2011, copper was selling for about $4.50 a pound.
“We could keep our heads above water at $3 a pound,” Shanahan said.
Following the news that the mine would close, Revett’s stock prices dropped Tuesday from 74 cents a share to 44 cents, the lowest they have ever been. In 2011 the company’s stock was worth nearly $6 a share.
The news that operations would be shuttered was just the latest in a tumultuous decade of highs and lows for Revett and the Troy Mine.
The Troy Mine was first opened in 1981 and produced copper and silver ore until 1993 when the previous owners closed it. In 2005, Revett purchased the mine and reopened it as a testing and training ground for the nearby Rock Creek Mine that it hopes to develop in Sanders County.
Tragedy struck in 2007 when a miner was killed after an underground roof collapsed. The company refocused on safety and in the years since has had a strong record.
The recession and dropping copper demand in 2008 dealt another blow to the struggling mine and it was almost closed that year when prices hit $2.36 a pound. The situation became so dire that the company issued a Worker Adjustment and Retraining notification to the nearly 200 miners and told employees that if business did not turn around within three months officials would pull the plug.
However, copper prices began to rebound and in 2011 the company reported its best year ever when it produced 1.4 million tons of ore. Those gains only continued in 2012 when the company made $7.5 million during the first quarter, a 135 percent increase over the previous year.
But the prosperity was short lived. In December 2012, a series of underground rock falls and slides closed the mine again, and in May 2013 the company announced it would have to lay off more than 100 people because it was taking longer to reopen the mine than officials had hoped.
In 2014, Revett made huge progress toward reopening the mine and built new underground tunnels to untouched ore deposits. Shanahan also announced that the new developments would extend the mine’s life by 12 years.
In September 2014, miners began to extract copper and silver from the mine for the first time in nearly two years, and company officials expected to be back to full production by the middle of this year. However, that plan was derailed when the price of copper dropped to its lowest value in five years.
Dropping copper prices have also impacted other mines, and on the same day Revett announced it was closing the Troy operation, Taseko Mines Ltd. in British Columbia announced it would lay off 45 employees.
Shanahan said he believes the Troy Mine will be reopened at some point in the future.
“We have to have better market prices and I think it will happen. I just don’t know when,” Shanahan said.
Until the mine does reopen, Shanahan said Revett would focus on getting the proper permits to open and develop the Rock Creek Mine in nearby Sanders County. A supplemental environmental impact statement is due sometime this year and at that point the project would be open for public comment. Shanahan said that the U.S. Forest Service could issue a record of decision sometime in 2016.
Shanahan said because the Rock Creek Mine is considerably larger than Troy and has a higher quality ore body, a drop in prices like this would not change the company’s long term plans to open it. When that does happen, Troy could reopen to train miners.
News that the mine would be closing in the coming days and that more than 70 people would be out of work next month dealt yet another blow to Lincoln County’s fragile economy. In November, the county had an unemployment rate of 10.6 percent, one of the highest in the state.
“It’s going to have a huge impact on the entire community,” said Troy Mayor Darren Coldwell. “Revett is a great supporter and steward of this community. They tried and tried and tried (to get the mine back up) but I guess you can only do so much.”