Climax Moves Up

On Wall Street last week, a new set of market leaders took over. They were the stocks of companies with big uranium holdings. In the rush, one of the fastest gainers was Climax Molybdenum Co., which has mines spread over three western states. Climax went up four points and finished out the week at a new high of 45 1/2.

With a string of uranium mines and one mill already operating at capacity in Colorado's plateau country, Climax announced that it was moving its uranium subsidiary headquarters from New York to Grand Junction, Colo., to be closer to actual operations, making it easier to expand into uranium. Though the company netted only $428,248 (4.4% of total profits) from uranium in fiscal 1953, it is prospecting for more lodes, will build new ore-processing plants wherever needed.

Said Climax President Arthur H. Bunker: "Our plan is to be very active in uranium. The acquisition of property is continual."

Risky Business. But Bunker, who knows that uranium is often a risky business, is not betting all his money on it. His company has set up a separate department of industrial development to invest in a whole new series of strategic metals. Climax owns thorium deposits in Colo rado, wants to expand into large-scale production of such other vital metals as nickel, cobalt and manganese, all needed for U.S. strategic stockpiles.

Climax also passed on some good news about its overall business to stockholders last week. The company's biggest business is mining molybdenum, the heat-resistant metal (melting point : 4,750DEG F.) for hardening steel. In 1953, Climax' sales climbed to $38,907,151, 30% better than 1952, and earnings rose from $6,071,519 in 1952 to almost $9,717,000 last year.

Climax' miners, who must tunnel through Colorado's Bartlett Mountain for the ore, call it "molly bedamned," and until World War I no one had much use for the metal. The Germans, then short of tungsten, first used it to harden the barrels of their Big Berthas. It was used on a large scale again in World War II. In peacetime, however, most steelmakers preferred tungsten; molybdenum production usually dropped off to a trickle.

Payoff. With the help of the jet age, hustling President Bunker has managed to turn moly into a bonanza. When Bunker, who is considered one of the top U.S. authorities on raw materials, took over Climax in 1949, the company owned North America's biggest known supply of the metal, in Colorado, but had few buyers. Bunker, 58, went to Washington to argue that the U.S. was in poor shape for the heat-resistant alloy it needed for jet engines, persuaded the Government to start buying it.

Korea proved Bunker right. When the U.S. started rearming, demand for moly soared. By 1951, production had doubled to 22 million lbs. a year and Climax was selling all it could mine. To catch up with demand, it has just completed a $35 million expansion at the moly mine in Colorado that will boost production another 55%, give Climax more than 70% of the world's total output in 1954.

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