California-based Chevron Mining has permanently closed its Questa molybdenum mine in northern New Mexico, resulting in the loss of around 300 jobs.

Closure of the mine came following a drop in demand, increasing operational costs and low market prices. In 2009, the company laid-off 227 workers due to the low prices of molybdenum.

According to the company, it has now issued a 60-day notice to 300 workers as per the federal law in the country, and will pay them wages during the notice period.

"We’re not in a position to be a cost-effective producer anymore…we’re the highest cost producer in the world."

Chevron spokeswoman Margaret Lejuste was quoted by Albuquerque Journal as saying that, out of the 300 workers, about 172 hourly workers are being released immediately with 60 days’ pay; about 118 salaried workers with the United Steel Workers will continue to work for the next two months at least.

"The decision was made after an intensive review of the economic viability of the mine. The price of molybdenum is just not getting high enough to cover the operation of the mine," Lejuste said.

Chevron Mining CEO and president David Partridge said the final decision to shutdown was made at the end of April, when officials started to plan the closure announcement.

"We’re not in a position to be a cost-effective producer anymore. In fact, we’re the highest cost producer in the world in terms of the global market," Partridge said.

Partridge also noted that there were no indications that the 100-year-old Questa mine would re-open in the near future.

"We’ve told [the employees] this is final closure of the mine and we’re going into full reclamation of the mine," Partridge added.

Meanwhile, the Chevron plans to hold job fairs in Questa to help laid-off workers find new jobs.