Smelters work at the newly nationalized Vinto tin smelter on the outskirts of Oruro, Bolivia, in this February 2007 file photo. Swiss-based Glencore International AG's Bolivian subsidiary just announced it will layoff several hundred employees which is triggering protests by the out-of-work miners.

DENVER – Withering cost cuts across the mining industry have left tens of thousands of people without jobs from the Arizona desert to the Andes — and there is a litany of evidence that the situation is growing worse.

International mining companies also have postponed or canceled projects and padlocked the gates to mines as consumers have cut spending on cars, jewelry and housing.

Global mining giant Rio Tinto announced last week that iron ore production, used to make steel, tumbled 18 percent in the fourth quarter and said Tuesday its aluminum subsidiary would double previously announced production cuts.

Unwanted copper, gold, bauxite (used in aluminum) and iron ore, is piling up or being left underground as the worst recession in at least a generation saps demand.

“Expect inventories to get bigger and expect this continuing process (of cutbacks),” said Andrew Martyn, a portfolio manager who specializes in mining for Toronto-based Davis-Rea Ltd. “It’s going to go for quite some time here.”

The effect on many communities worldwide that rely on mining has been immediate. Workers are protesting job cuts and others are expected to begin migrating in large numbers in search of work, some across international borders.

“A lot of the communities are remote so that when (mines) do shut down, the town actually collapses,” Martyn said.

The bulk of the layoffs in the United States are in base metals such as copper and zinc, although major companies are scaling back production of metallurgical coal for use in steel manufacturing.

Coal companies have slowed production from Wyoming to Australia.

Coal jobs are among the highest paying in many rural U.S. communities, potentially creating a dire economic ripple effect. In the past, coal companies have been more recession proof, but the average price per ton for Appalachian coal has fallen more than 35 percent since the summer.

At least 700 job cuts are likely in Tennessee and Montana by Swiss-based Glencore International AG, a commodities company.

Still, job losses have been most severe outside the United States.

Glencore’s Bolivian subsidiary recently announced it will layoff several hundred people, triggering labor protests.

Thousands of miners who dig primarily for zinc in Bolivia either have been laid off or left their jobs in the Andes, the poorest region in South America’s poorest country. In the mines around the small cities of Potosi and Oruro, the work force of roughly 25,000 miners and refiners has been cut roughly in half.

A controlling stake in Bolivia’s largest mine, San Cristobal, has been put up for sale by Denver-based Apex Silver Mines Ltd., which is reorganizing under bankruptcy protection.

Local officials say workers may flood back into villages emptied during a two-year zinc boom that ended in 2007, or they may emigrate to Argentina in search of jobs.

Tens of thousands of mining jobs have been lost in recent months from South Africa to Jamaica as manufacturers shut down. U.S. industrial production plunged by double the amount analysts expected in December, capping the worst year for manufacturers since 2001.

“As little as three to six months ago, steel companies were running flat out around the world because China was making factories to ship goods to the rest of the Western world,” Martyn said. “That process has come to a grinding halt.”

There are no reliable employment numbers available for the mining industry globally because it spans such a broad geographic, economic and political spectrum, but it is clear that the number of jobs already lost is vast.

The fall off in copper, used in everything from housing to computers, has triggered thousands of layoffs in Peru, Arizona and New Mexico.

Aluminum producers like Alcoa have also slashed production, along with thousands of jobs. Those cuts have spilled over into mining.

“What all companies are doing that have bauxite and alumina facilities is they’re basically retrenching,” Argus Research analyst Bill Selesky said. “They may be running them at lower production levels now just to keep up with what’s going on. And they won’t rehire these people until they actually see an uptick in demand.”

In a December address, Jamaican Prime Minister Bruce Golding announced a $6.7 million plan to boost tourism and small businesses to help offset the effects of the downturn in the bauxite-alumina industry.

Industry analysts speculate some signs of improvement could start appearing in the latter half of this year, though others say it could take up to two years.

“Companies still looking to cut costs are going to be cutting out high cost operations. A lot of that should be still to come,” Barnard Jacobs Mellet analyst Patrick Chidley said.

BHP Billiton Ltd., the world’s largest miner, is expected to reveal more about the state of production and exploration for the last quarter of 2008 on Wednesday, Australia time. The figures should be available late Tuesday in the United States.

Rio Tinto Alcan President and CEO, Primary Metal, Jacynthe Cote speaks to reporters on Tuesday in Montreal. Rio Tinto Alcan is permanently closing its Beauharnois smelter in Quebec and curtailing production at the Vaudreuil alumina refinery.

Trees with leaves in the colors of fall stand near the snags of pine trees destroyed by pine beetles near the Keystone Ski Resort near Keystone, Colo. There are about 80 mills in North America that produce at least 1 million tons of wood pellets per year. Pellets are made of recycled wood waste such as sawdust or beetle-killed trees.

DENVER — A tiny middle school tucked in a snow-covered mountain valley ditched its decades-old coal-fired boilers for a wood pellet furnace, partly due to a beetle not much bigger than an eyelash.

Mountain pine beetles have ravaged wide swaths of trees in Colorado, leaving the surviving forest more susceptible to fire from decaying trees.

A handful of businesses are trying to capitalize on a bad situation, and may incidentally prevent it from getting worse.

Sorocco Middle School contacted one of the two wood-pellet plants in Colorado that have opened since the beetles began attacking trees a number of years ago, and now draws heat from pellets.

“It’s a disturbing situation to watch all of our trees die and we know this is going to dramatically impact our landscape,” said Mark Mathis, president and chief executive of Confluence Energy, a pellet producer about 100 miles northwest of Denver.

In Colorado, beetles had infected at least 1.5 million acres of forest as of 2007, creating vast tracts of dying red and gray forest.

The beetles that have scarred breathtaking vistas from Alaska and British Columbia to the Southwest have spread because warmer winters allow more to survive, according to the U.S. Forest Service.

Forest Service officials believe most lodgepole pine — the predominant pine tree at higher elevations — will be killed by 2013 and it could take decades before they return.

The predominant use for beetle-killed trees is still housing lumber, but the downturn in real estate has piqued interest in harvesting more dead trees for fuel, said John Swaan, executive director of the Wood Pellet Association of Canada.

Producers have relied on sawdust from mills that cut lumber for housing. If they are forced to collect dead trees and process them, the cost could be three to four times greater, Swaan said.

That could make the business less competitive when oil is cheap.

Crude has given up two thirds of its value since peaking near $150 over the summer, which led to sharp increase in sales for wood pellet producers, particularly in the Northeast where heating oil is used widely.

Despite its cyclical nature, investors believe the business model is workable.

At Grand Lake on the outskirts of Rocky Mountain National Park, Joe Kostelac and his neighbors began talking about dealing with the dead trees and created the Rocky Mountain Pellet Co. in nearby Walden. The 20,000-square-foot mill began producing pellets last fall and has sold as much product as could be manufactured through April.

“We really believe the growth is in the industrial side and commercial application of this product because of gas and oil and all the other energy products,” said Kostelac, who came out of retirement to run the company.

In the Yampa Valley, the South Routt School District installed Sorocco’s wood pellet heating system as part of a $4.1 million renewable energy project that also includes a geothermal heat pipes. It was financed by state grants and a bond issue.

“I think it’s definitely a conscious effort to make a green impact on the community. By using products that are close to home, it multiplies that effect drastically,” Sorocco Principal Dennis Alt says.

DENVER – Freeport-McMoRan Copper & Gold Inc. said Wednesday it would suspend operations and lay off the bulk of its workers at a New Mexico mine, cut production estimates through 2010 and curb other costs as it struggles to cope with plummeting copper prices.

The layoffs come on top of about 800 jobs cut last month at its Western copper and molybdenum mines. Freeport-McMoRan, one of the world’s largest copper producers, said Wednesday more steps may be taken if global economic conditions don’t improve. Its shares fell 21 percent to a record low.

“We are responding aggressively to the current market conditions, which have weakened dramatically in recent weeks,” the company’s executives said in a statement.

“These revisions to our plans will allow us to reduce operating costs and capital spending, adjust our production profile to better match market requirements and preserve our valuable resources for anticipated improved market conditions.”

It is the latest round of job cuts for the mining industry that are now wrestling with plummeting commodity prices amid a recession.

“I think you’re going to see a lot more miners take this approach,” said Argus Research analyst Bill Selesky. “They basically don’t know, at this point, where commodity prices are heading.”

Copper prices have fallen from about $3.61 per ton at the end of September to an average of $1.69 last month. The price hit $1.63 a ton on Monday.

Prices for molybdenum, which is used to strengthen steel, have fallen from an average of about $33 per pound during the nine months ended in September to $9 per pound on Monday, the company said.

In its announcement, Freeport-McMoRan cut its 2009 copper production forecast by 4.1 billion pounds from 4.3 billion pounds, and its 2010 forecast to 4.1 billion pounds from 4.6 billion pounds.

Molybdenum production in 2009 was cut to 70 million pounds from 80 million pounds and 2010 production was cut to 70 million pounds from 100 million pounds.

Besides cutting operating and administrative costs, the company also is suspending its $2 common stock dividend, which has totaled about $755 million per year.

“The suspension of our dividend reflects the sharp and rapid decline in copper and molybdenum prices, the dislocation of capital markets and the uncertain economic outlook.”

Selesky said he expects most mining companies to cut jobs, in a rough range of about 10 percent industrywide.

“I think you could lump all miners regardless of what type of mineral they produce and say yes, they’re all going to feel it, maybe not so much the gold miners because that seems to be the only commodity price that’s held up very well under the circumstances,” he said.

The layoffs announced Wednesday will occur at Freeport McMoRan’s Chino mine near Hurley, N.M., where operations will be suspended. A company spokesman said 600 of the 830 jobs will be cut.

Freeport-McMoRan also will offer voluntary early retirement and a voluntary resignation incentive program to some employees. “Once these voluntary actions are completed, we will determine whether any further employment actions are appropriate,” it stated.

Previously, it announced more than 800 job cuts at copper mines in Miami, Morenci, Bagdad and Sierrita in Arizona and a molybdenum mine in Henderson, Colo.

Shares of Freeport-McMoRan plunged 21 percent, or $4.61, to $17.21 in midday trading.

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DENVER – Freeport-McMoran Copper & Gold Inc. said Monday it would cut molybdenum production and lay off 14 percent of its work force at a Colorado mine, citing a 60 percent drop in price and slowing global economic conditions.

The world’s largest publicly traded copper producer also said it would delay the long-planned restart of a molybdenum mine near Leadville, Colo., and re-evaluate molybdenum produced as a byproduct at its other mines.

About 100 full-time workers at the Henderson mine west of Denver will be laid off as a result of the changes but no information was available about when that would occur, company spokesman Eric Kinneberg said. The mine had 700 employees, all non-union, at the start of the month.

Contractors also will be affected although Kinneberg had no details about how that would take effect.

Molybdenum, a metal used in strengthening steel and some chemical businesses, has enjoyed a strong market recently but the price has fallen significantly due to slowing global demand, the credit crisis and tumultuous financial markets, Phoenix-based Freeport-McMoRan said.

The price averaged $30 a pound last year and about $33 a pound in the first nine months of the year. However, since mid-October, the price has fallen from $30 a pound to $12 a pound as of Monday, the company said, citing the Metals Week Molybdenum Dealer Oxide price.

Argus Research analyst Bill Selesky said the announcement is a ripple effect of slowdowns in the steel industry. “All of it is in response to the global economic slowdown based off steel demand,” he said.

The company likely will see an impact on earnings from the announcement, Selesky said.

The 25 percent production cut will equal about 10 million pounds at the Henderson underground mine near Empire, about 40 miles west of Denver. The Climax mine, which had been expected to begin operations in 2010, will be put on hold.

In a statement, the company said it expects to restart the mine at some point. “Once a decision is made to resume construction activities, the project would be capable of starting up within a 12-18 month timeframe.”

Shares of Freeport-McMoRan rose $1.28, or 4.7 percent, to $28.38 in midday trading.

DENVER (AP) — Freeport-McMoRan Copper and Gold Inc. on Tuesday reported its profit fell one-third amid a wobbly economy that kept commodity prices lower for much of the third quarter.

The results, which missed Wall Street estimates, sent stocks tumbling in afternoon trading.

The Phoenix-based company, the world’s largest publicly traded copper producer, said it is looking at cost-cutting measures, deferring or eliminating some projects and exploration.

At the beginning of the quarter, Freeport-McMoRan was selling copper at $4 a pound, generating cash flow, and investing in equipment and resources, President and Chief Executive Officer Richard Adkerson told analysts during a conference call.

Now, copper prices are hovering around $2 a pound while the costs of energy, diesel, steel and acid used in operations are dropping. “It’s pretty striking just how quickly this has changed,” Adkerson said. “Now we’ve had to change.”

Executives are limiting investments in some projects and operations, and reducing capital expenditures. “Fortunately, we don’t have to face refinancing any of our obligations, and we will earn enough cash to continue to invest in our business to maintain our resource, and to go forward,” he said.

For the July-to-September quarter, Freeport-McMoRan reported net income available to common shareholders of $523 million, or $1.31 per share, down 33 percent from a profit of $775 million, or $1.87 per share, in the year-ago quarter.

The most recent quarter reflected $61 million in charges for unrealized losses on copper futures contracts; a $16 million charge for lower cost or market inventory adjustments. The year-ago quarter reflected a $44 million non-cash accounting adjustment.

Revenue dipped to $4.62 billion from $5.07 billion.

Analysts polled by Thomson Reuters had forecast on average earnings of $1.43 per share on revenue of $4.81 billion.

Freeport-McMoRan sold 1 billion pounds of copper at an average price of $3.14 per pound, which is 11 percent lower than $3.53 it commanded in the year-earlier period. Meanwhile, the company sold 307,000 ounces of gold at an average price of $869 — up 25 percent from the year-ago price.

The company sold more molybdenum in the latest quarter, for a higher selling price. Freeport-McMoRan sold 19 million pounds of molybdenum at an average price of $32.11, up from 16 million pounds for an average price of $27.89, in the 2007 quarter.

For the year, Freeport-McMoRan said it expects to sell 4 billion pounds of copper, 1.2 million ounces of gold and 74 million pounds of molybdenum.

Adkerson said they have decided to delay expansion projects at Sierrita and Bagdad mines and the restart of the Miami mine in Arizona. They are assessing the timing of developments at two South American mines but plans are still on track to reopen the Climax molybdenum mine at Leadville, Colo., in 2010.

The company also issued revised projected copper sales of 4.3 million pounds for 2009 and 4.6 million pounds 2010, cutting each year by 200 million pounds.

Shares tumbled $3.98, or 10.8 percent, to $32.74. Over the past year, the stock has ranged between $30.03 and $127.24, and is off 68 percent since January.

DENVER – Frontier Airlines Holdings Inc. took one of its first significant steps to restructure operations Wednesday, ending a regional jet pact with Republic Airways and announcing plans to eliminate service to five cities.

The announcement, which was made by both airlines, comes as Denver-based Frontier reorganizes under a Chapter 11 petition in U.S. Bankruptcy Court.

It represents a shift away from a business strategy to move into small and midsized markets that were underserved by larger carriers. Frontier put it into place in January 2007 when it signed the 11-year agreement with Republic Airways Holdings Inc.

Republic’s stock fell as much as 9 percent in early trading.

“Unfortunately, with current economic conditions and other business changes, we have been forced to drastically rethink the use of regional aircraft in our flight mix,” Frontier Chief Executive Officer Sean Menke said in a statement.

Frontier will eliminate 12 Republic-owned 76-seat jets from daily operations by mid-June. Service will end by June 1 to Sioux City, Iowa, Jacksonville, Fla., Little Rock, Ark., Memphis, Tenn., and Tulsa, Okla. It will not start service, as planned, to Missoula, Mont.

Passengers who may be affected by the schedule changes will receive refunds or the option for an alternate flight, Frontier said.

Indianapolis-based Republic, which operated the jets under Frontier’s brand, said the agreement generated about $6 million a month in revenue. Frontier paid some operational costs such as landing fees and fuel.

Republic’s initial contract was for 11 years with a Frontier option to extend it for an additional six years. Financial terms were not disclosed.

Frontier had planned to take on an additional five regional jets during the second half of this year. Republic said it will try to place the jets with other partners or sell them.

Republic also will file a $260 million damage claim because of the early termination of the agreement, although it said the bankruptcy court will decide how much it will be able to recover.

“It’s unfortunate that despite their many efforts to reorganize their business outside of Chapter 11, factors beyond their control conspired to force a deeper reorganization,” Republic CEO Bryan Bedford stated.

Although Frontier has struggled amid stiff competition and high fuel costs, Menke has said the airline was forced into bankruptcy reorganization because its credit card processing company sought to hold up to 100 percent of proceeds from ticket sales in reserve until the passengers’ flights were completed.

The filing prevents Greenwood Village, Colo.-based First Data Corp. from implementing the change until Frontier emerges from bankruptcy or First Data receives a judge’s approval to proceed.

In addition to the Republic contract, Frontier late last year launched Lynx Aviation, a turboprop operation with the goal of serving small and mid-sized markets to attract customers who would boost traffic at its Denver International Airport hub.

Frontier spokesman Joe Hodas said Wednesday that the turboprop operation may benefit because it would be more cost effective on some of the routes that Republic had served.

Republic’s stock fell $1.32 a share, or 7.6 percent, to $16.64 a share in midday trading.

Greg Brenneman, right, CEO of Quiznos, holds up a tray of the restaurant's new offerings as franchisee Brian Wise, left, of Lawrence, Ks. looks on during an annual companywide meeting in Denver, Colo., last month. The meeting was attended by 640 corporate employees, area directors and selected franchise owners.

DENVER – Is it a sandwich or a taco? A snack or a meal?

The Sammie, the newest product from Quiznos, can fit just about any category, a 200- to 300-calorie concoction of meats and greens folded into flatbread that sells for $2.

It’s a key ingredient in Greg Brenneman’s recipe to reshape the 5,200-restaurant sandwich chain, along with delivery, online ordering, new venues like kiosks in airports, colleges and likely even a big box retailer.

Brenneman’s agenda is ambitious, designed to better position Quiznos in the fast-food industry where restaurants aim to please consumers who want convenient food while keeping one eye on the pocketbook and another on the sagging economy.

The Sammie is one of the more innovative products in the value-priced snack or sandwich category, said Darren Tristano, executive vice president of Technomic Inc., a restaurant consulting company.

McDonald’s Corp. offers a wrap, KFC has a snacker sandwich and Subway has specials featuring a 6-inch sub for $2.49. “Everybody in some way is addressing it,” he said.

Brenneman’s other ideas are intriguing, particularly delivery service and online ordering, Tristano said. “Very few chains are doing online ordering,” he said. “The next generation really wants that.”

The Denver-based, privately held chain is the latest turnaround project for Brenneman, a hard-driving executive with a “get-it-done” mantra who rarely takes a day off and confesses to texting business messages while riding a chairlift at Beaver Creek’s ski resort.

Brenneman has borrowed from two previous turnaround projects — Continental Airlines Inc. and Burger King — for his revitalization of Quiznos, which he joined in January 2007 as chief executive officer. Quiznos was plagued by franchisee complaints about high food costs, low profits and company restrictions on how they could do business.

Brenneman and his team found the chain had a strong brand but weak profits created by a number of corporate decisions made over the years. The complex menu featured 29 sandwiches, including specialty sandwiches, each available at three different sizes and three different prices. Quiznos used coupons to attract patrons.

Brenneman assembled a team of fast-food industry veterans and began a “detoxing” process. They retooled the menu, eliminating about 15 percent of the items. They reduced their use of coupon offers to draw traffic; the company plans to issue only four to five coupons this year.

“This year, as we detoxed everything, we expected sales to come down fairly dramatically. They didn’t actually,” Brenneman said.

With the changes, food costs for franchisees fell about 4 percent across the board but transactions per store slowed before beginning to pick up in the fourth quarter, said Steve Provost, chief marketing officer.

“We had that stretch of time where we had to sort of say we’ve got to do this stuff because we’ve got to fix your profitability,” he said.

Average sales for 2007 are estimated at $415,000 per store, about the same as a year ago, the company said. Quiznos is privately held and does not release most financial data.

Franchisees have reported mixed results from the changes; some are elated while others continue to see problems.

Danny Kessels, who runs a Quiznos store in Boulder, said food costs are high and some franchisees still have concerns over the placement of new stores. He said his 2007 profits were down 3 percent to 5 percent. Kessels is president of the Toasted Sub Franchisee Association, a support group that he said represents more than 20 percent of the owners.

In Shawnee, Okla., franchisee Gary Smoot said his profit increased about 8 percent from June to December, compared with the same six-month period in 2006. “The operators in this area are by and large much happier with what’s going on,” he said.

This month, Quiznos is unveiling a new advertising campaign featuring the baritone voice of actor Michael Clarke Duncan and a new slogan, “Mmmm, Quiznos love what you eat.”

Other new products in the offing include a lobster salad sandwich and even a pizza.

Brenneman has high expectations for the delivery program aimed at consumers who stay in the office for lunch. Franchisee owners can add delivery for a $6,250 fee and can decide how and when to offer the service.

Although pizza chains have long offered delivery service, few sandwich chains have gone that route because of the cost, Tristano said. He believes Quiznos has a chance to succeed and pointed to Jimmy John’s Gourmet Sandwich Shops of Champaign, Ill., as a chain that does a good job with delivery.

For Brenneman, the work ahead has turned to implementation: “This is really a year of execution. It’s just a matter of continuously improving what we’re doing.”