A four-month strike has ended at Mexico’s Peñasquito mine owned by Newmont Corporation (NYSE: NEM) (TSX: NGT) after a preliminary agreement was reached between the workers and the company following intense negotiations.
On Thursday evening, the company and the country’s mining union issued statements on social media regarding the matter. Workers at the mine, the largest gold-producing asset in Mexico and top employer in the state of Zacatecas, will receive an 8 per cent daily pay raise — including retroactive payments commencing from August 1 this year.
“Mark Rodgers, South America Regional Director of Newmont Corporation, the most of two thousand colleagues and fellow workers of Minera Peñasquito S. A. C.V., decided in an extraordinary assembly, to make the unanimous agreement to return to their work,” reads a statement from Mexico’s National Union of Mining, Metallurgical and Steel Workers.
The workers will also be receiving a 152 million peso bonus payment ($11.4 million) divided equally amongst approximately 2,000 of them through the deal. Newmont says the preliminary agreement still needs to be formalized into a definitive agreement, a process that will be concluded in the days to come.
The company was losing about $3.7 million in revenue per day from ceased operations at the mine since June 7 and $1.4 million from maintenance costs daily. In 2022, the mine contributed $2.6 billion to Mexico’s economy; it is also the second-largest silver mine in the world.
El acuerdo de los trabajadores con Newmont incluye un aumento salarial del 8% y un bono equivalente a 152 millones de pesos.https://t.co/G5BBmBLBk3
— Excélsior (@Excelsior) October 6, 2023
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The union originally demanded a 10 per cent pay raise when the strike began.
In 2022, the mine generated 566,000 ounces of gold and 29.7 million ounces of silver. The operation also produces significant quantities of zinc and lead.
Newmont acquired Peñasquito in 2019 when it merged with Goldcorp Inc.
Newmont shares rose by 3.5 per cent Friday to $51.61 on the Toronto Stock Exchange. They have been on a steady decline since January 1, dropping by almost 24 per cent.
rowan@mugglehead.com
