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UNOCAL SUBSIDIARY MOLYCORP INC. SUSPENDS MOLYBDENUM MINING

 UNOCAL SUBSIDIARY MOLYCORP INC. SUSPENDS MOLYBDENUM MINING
 LOS ANGELES, Nov. 26 /PRNewswire/ -- Unocal Corp. (NYSE: UCL) said today that its wholly owned subsidiary, Molycorp Inc., will suspend molybdenum mining and processing operations at Questa, N. M., in January 1992.
 "The molybdenum market has been in continued decline through 1991, due to persistent worldwide economic recession," said R. Gene Dewey, president of Molycorp.
 Dewey pointed out that current spot prices for molybdenum are $2.10 to $2.15 per pound. This compares with $3.60 per pound in 1989, when Molycorp resumed mining operations after a three-year shutdown.
 "In 1991, we expect to lose more than $18 million pretax in the molybdenum business. With the pessimistic outlook for future molybdenum demand, Molycorp cannot continue to sustain such losses in the face of the oversupply in the world market."
 The suspension of operations will eliminate about 200 jobs at Questa. Approximately 20 other employees will remain after January for reclamation work, including tailing pond reclamation.
 "The most difficult part of the decision to suspend production is the impact on our employees and their families," Dewey said. "We have here probably the greatest workforce that has ever served the Questa operation. These employees have shown outstanding dedication and hard work to make this mine successful."
 For affected employees, Molycorp is offering severance pay and up to six months of company contributions for medical and dental insurance coverage.
 Molycorp has been mining and milling molybdenum at Questa, in Taos County of northern New Mexico, for nearly 70 years. A surface mine, started in 1965, produced up to 17,000 tons of ore per day to yield some 10 to 12 million pounds annually of molybdenum in concentrate.
 In 1978, Molycorp began a $250 million capital project to develop the current underground mine and modern milling facilities. The underground mine began production in late 1983, with a capacity of 18,000 tons of ore per day, designed to yield 18 to 20 million pounds annually of molybdenum in concentrate
 In 1986, Molycorp suspended mining operations at Questa because of depressed market conditions. Operations resumed in 1989 when it appeared that prices and market conditions were improving. Unocal wrote off its molybdenum assets in 1988 and 1990.
 Earlier this month, Molycorp suspended operations at its molybdenum roasting facility in Washington, Pa. Approximately 65 jobs will be eliminated there by year end, and 10 employees will remain.
 Molycorp will continue its lanthanide mining and processing operations at Mountain Pass, Calif. and its metallurgical and chemical processing plants in Louviers, Colo., and York, Pa.
 -0- 11/26/91
 /CONTACT: Barry Lane, 213-977-7601, or Art Bentley, 213-977-6814, both of Unocal/
 (UCL) CO: Molycorp Inc.; Unocal Corp. ST: California IN: OIL MNG SU:


AL -- LA008 -- 7248 11/26/91 11:35 EST
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Publication:PR Newswire
Date:Nov 26, 1991
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