Newmont Corporation (NYSE: NEM) (TSX: NGT) has suspended activity at Mexico’s Peñasquito mine after the country’s Union of Mine and Metal Workers initiated a strike and demanded more profit from the operation.
The union notified the company of the strike action on Wednesday and demanded 10 per cent more profit-sharing revenue from the mine prior to Newmont temporarily shutting down Peñasquito on Thursday in refusal of its demands.
Pursuant to a collective bargaining agreement (CBA) negotiated last year the union was receiving a 10 per cent cut from the operation and now wants 20 per cent. The organization is claiming that Newmont has been violating labour agreements and legal regulations as justification for the move.
Newmont says it is urging the union to abide by the CBA agreed upon last June and that it attempted to negotiate the issues with the organization regarding the agreement prior to the strike action.
The company says it is ready and willing to engage in conciliation meetings with the union to help resolve the dispute.
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Peñasquito is the world’s second-largest silver mine and also produces gold, zinc and lead. Last year the mine produced 29.7 million ounces of silver, and in 2021, it generated 686,000 ounces of gold.
It is the largest employer in the state of Zacatecas with over 5,000 employees and contributed US$1.9 billion to Mexico’s economy last year.
Newmont also recently announced that it would be investing an additional US$540 million into Argentina’s Cerro Negro mine which will extend its life until 2034.
The company published its second annual ESG report on climate change initiatives at the end of May and acquired the Australian gold producer Newcrest Mining (ASX: NCM) for US$19.2 billion last month as well.
As of last year, there were 138 Canadian mining companies in Mexico with operations there generating $8.9 billion for Canada’s economy.
Newmont’s shares are currently trading for $56.09 on the Toronto Stock Exchange and US$42.04 on the New York Stock Exchange.
rowan@mugglehead.com
