Sierra Gorda has entered into a strategic commercial partnership with Molymet. The Sierra Gorda Project is a joint venture between KGHM International Ltd., Sumitomo Metal Mining Company Ltd., and Sumitomo Corporation. Both companys has entered Tolling Agreement for all concentrates of the molybdenum produced at Sierra Gorda.
Located approximately 4 kilometers from the town of Sierra Gorda, in Northern Chile, the project has commenced preliminary physical construction of the plant and pre-stripping in preparation for production in 2014.Under its current plans it will produce an average of 25 million pounds of molybdenum in concentrate per annum.
Both companies have entered into a ten year agreement, starting in 2014, for 100% of the molybdenum concentrates produced at Sierra Gorda. Under the Agreement, Sierra Gorda's molybdenum concentrates will be converted into technical grade molybdenum oxide, both in powder and briquettes form and ferro-molybdenum.
KGHM International Ltd. President and Chief Executive Officer Derek White said, “Securing this long-term Agreement with Molymet was crucial for KGHM International and its joint-venture partners as Sierra Gorda will be one of the world’s largest producers of molybdenum in its initial production phase. We look forward to working together with Molymet, a recognized leader in molybdenum processing in the world."
Molymet is a publically owned Chilean corporation listed on the Santiago Stock Exchange and has been processing molybdenum concentrates since 1975. Molymet has production facilities in Chile, Mexico, Belgium and Germany and treats approximately 200 million lbs per annum of molybdenum in concentrates at its various facilities, representing approximately 35% of world molybdenum consumption.