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COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)558
Vol.1979/0195

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COM(79)558 final
COMMISSION Brussels,
OFTHE 23rdOctober1979
EUROPEAN COMMUNITIES FOROFFICIAL USEONLY
GenerolSecretoriat
REQUEST FORCOUNCILASSENTINACCORDANCE WITH
THESECONDPARAGRAPH OFARTICLE54OFTHEECSCTREATY
TOTHEFINANCING OFTHECONSTRUCTION OFAROASTING
ANDREFINING PLANTFORMOLYBDENUM OXIDEIN
ROTTERDAM BYTHECOMPANYCLIMAXMOLYBDENUM B.V.
(Communication fromtheCommission tothe
Council)
/ /
COM(79)558final
/

COMMISSION OFTHE
EUROPEAN COMMUNITIES
Directorate General
CreditandInvestmentsForofficiaiuseonly
NotefortheCouncil
Subject•RequestforCouncilassentinaccordancewiththesecondparagraph
ofArticle54oftheECSCTreatytothefinancingofthe
construction ofaroastingandrefiningplant-forMolybdenumoxide
inRotterdambythecompanyClimaxMolybdenumB.V.
ClimaxMolybdenumB.V.hassubmittedanapplicationtotheCommission
oftheEuropeanCommunitiesforalong-termloanofUS$18.0million
(approx.EUA13.7million)tofinancetheabovementionedproject.
CompanysClimaxMolybdenumB.V.,Rotterdam(Netherlands)
SharecapitalsHfl5million
Thesharecapitalis100$ownedbyAmericanMetalClimax
(AMAX)Inc.,Greenwich,Connecticut,USA'
WorkssRoastingandrefiningplantfor-molybdenumoxidein
Rotterdam-Botlek (Netherlands) ,"
Thecompanywasformedin1966asawhollyownedsubsidiaryof
AMAXInc.Greenwich,Connecticut,USA. V
OnaroastingcapacityestimatedfortheEECat55millionpounds
peryear,ClimaxMolybdenumB.V.represent14millionpoundsperyear.Out
ofthisproduction,about0.8millionpoundsofmolybdenumoxide.are...gold..
tothechemicalindustry.Thebalanceoftheproductionissoldtothe
Europeansteelindustry.Thechemicalindustryisalsosuppliedbya
chemicalplantcurrentlyoperatedatfullcapacityindependently fromthe
roastingplant.Climaxalsohastwosmallermolybdenumproductionunitsin
theEEClocatedrespectively atSpigno,Italjr,andStowmarket,England,
whichprimarilysupplytheEECsteelindustry,andareoperatingatfull
capacity.
CurrentlyallofAmax'smolybdenumproductionresults' :frommining •
operationsatitsClimaxmine,locatednearLeadville,Colorado,andits.
HendersonmineatEmpire,Colorado,whichbeganproductionoforein1976.
Bytheendof1.981combinedproductionfromthesetwominesis"expectedto
exceed100millionpoundsofmolybdenumperyear.

-2-
Pro.iect
TheplantissituatedatRotterdara-Botlek ,Netherlands ,andwas
constructedin1966with"oneroasterhavingatechnicalcapacityof60000lb.
molybdenumperdaywiththeintentionofservingtheEuropeansteelindustry
withmolybdicoxideproducts.Theactualoutputwasrestrictedto40000lb
perdaytomeetenvironmental andpollutionlevelsofemission.Duringthe
period1966to1979"theplantwasextendedfortheproductionofhighpurity
ammoniummolybdateandpuremolybdicoxideforthechemicalindustry.
Theconstruction ofasinglecontactsulphuricacidplantofa
capacityof160tonnesperdayhasnowbeendecidedwiththeaimofmeeting
theanti-pollution regulations andthusincreasingproductioncapacityof
molybdenumfrom.thecurrentlimitof40000lbtoitsdesignedcapacityof
about60000lbofmolybdenumperdayfromtheexistingroaster.Itis
anticipatedthatatleast95$of"theincreasedproductionwillbedirected
totheEuropeansteelindustry.Asecondroasterhavingacapacityof60000lb
isplannedfortheearly1980's.Theacidplantwillhavesufficientcapacity
tohandleemissionsfromthissecondroaster,whichshouldstartproduction
in1983.
Withrespecttoenvironmental regulations ,theRotterdamoreroaster,
whichisthelargestintheCommunity,willcomplyfullywiththerequirements
ofthepublicauthoritiesaftercompletionoftheproposedproject..
Thetotalcostofthenewprojectisestimatedat$52.4million,
ofwhich&11.3millionwillbeforincreasedworkingcapital.Ofthisamountof
$52.4million'anamountof$36.1millionwillbetakenintoconsideration aspure
projectcostsasabasisforcalculating theinterestbonification .Thebalance
oftheexpenditure,inexcessofthe-requestedECSCloan($18.0million)andthe
DutchGovernmentsubsidies($5.0million),willbeprovidedbyAmaxInc.'sown
funds.Construction isscheduledtocommenceinmid-1979withcompletion
bymid-1983.
Economicassessment
Molybdenumisametallicelementusedprimarilyasanalloying .
additiontospecialitysteelandirontoenhancetoughnessandstrength,to
improveresistancetowearandcorrosionbothatnormalandhightemperatures .
Itismainlyusedinqualitysteelproducts,whichhavehighadded
valueandisnowofgrowingimportanceinthefieldofenergy,energysavings
andrawmaterialsavings.Highdemandexistsformolybdenumcontaining
highstrengthlowalloy(HSLA)steelpipesintransmissionlinesforcrude
oilandnaturalgasinArcticandunderseasenvironments .
Newhighlyformabledual-phasemolybdenumcontainingsteels .are
amongthenewhigh-strength ,light-weight materialsbeingconsideredfor
automotivesheetapplications ,toreduceweightandimprovefueleconomy.
Researchhasdevelopedsteelalloyscontaining molybdenumintherangeof
9$to15$thatareresistanttohightemperatures andcorrosiveatmospheres.

Many ofthese applications areconsidered bytheCommission asa
highly important sector fortheCommunity steel industries intheface ...of
world competition .
Apart from Amax production ,most molybdenum isproduced asaby­
product ofcopper mining .By-product production isestimated torepresent
more than 4-Ofi -ofthefree world supply andisvery dependent upon thestate
ofthecopper market .
Estimates ofconsumption andproduction ofmolybdenum
for1973 through 1977*(inmillion lbMo)
Consumption1973 1974 1975 1976 1977
USA 70 75 55 .57 60
Western Europe 65 7866 70 70
Japan 23 2721 25 24
Others 11 13111011
Sales toEastern Bloc 12 14 '15 15 17
Totals 181 207 168 177182
Production
AMAX 58 63 60 64 75
Other USA 60 49 46 49 48
Canada 26 29 32 31 32 •
Chile 11 18 2321 23
Others 322 3 3
Totals ■158161 163168,181
*1978 estimates notyetavailable
Over the 1973-1977 period demand hasconsistently exceeded
supply andhas onljr been metbyareduction ofinventories byproducers
andconsumers aswell aslarge releases from thenowdepleted USGovernment
stockpile .Thesituation became tighter in1978 despite increased production
and isexpected toremain tight inthenear term . %
Over thepast twenty years (1957-76 ),theoverall moly.bdenum
consumption grew atanaverage rate of6.8 /'-peryear ,while Western Europe
usage grew atarate of7»58 ?-.Itisexpected that molybdenum .'.consumption
could bedoubled inthenext tentofifteen years . .\

-4-
Conclusions
Amax sells approximately onehalf ofitsmolybdenum products outside
theUSA ,principally inEurope .andJapan ,i'ith over 40$oftheworld production
coming from itsownprimary molybdenum mines andconversion plants ,Amax appears
asamost reliable supplier fortheEEC ,Tohelp meet anticipated heavy
demand ,development work hasbeen started tobring theKitsault mine in
British Columbia into production by1982 ,which will add9"to10million
pounds ofmolybdenum toworld supply .With theexpansion oftheClimax
Molybdenum B.V. plant this increased ,molybdenum jproduct ionisexpected to
help alleviate thecurrent bottleneck for thespeciality steel industry
inthe EEC .
Nearly >95^ofthecurrent production ofmolybdic oxide from the
Rotterdam plant issold tothesteel industry throughout Europe ,with over
70/Sgoing toEECcountries .Most ofthesteel producers intheEECpurchase "
molybdic oxide from Climax B.V. ,(British Steel Corporation ,Italsider ,
Thyssen ,Krupp ,Creusot-Loire ,Usinor anclCockerill ).
This project cantherefore beconsidered toqualify for aloan
under therules ofArticle 54,paragraph 2,which allows granting ofloans
forthefinancing ofinvestments -works andinstallations -which contribute
directly andprimarily to .increasing .production oftheproducts referred to
intheECSC Treaty .Since molybdenum isaprime constituent intheproduction
ofspecialized steels ,which have ahigh added value ,andmolybdenum is
currently inshort supply ,theincreased production envisaged will assist
inalleviating abottle-neck which iscurrently affecting thewhole ofthe
ECSC steel industry .
The Commission hasdecided inprinciple infavour ofgranting the
loan requested .Therefore ,inaccordance with th® .second paragraph of
Article 54oftheECSC Treaty ,ithereby requests theassent oftheCouncil
tothegranting ofaloan ofUSt18.0 million (approx .EUA13.7 million )
toClimax Molybdenum B.V. ,Rotterdam .
Notes ;TheCommission hasnotyetgranted anyloans toClimax Molybdenum .B.V. ,
Rotterdam .