The world’s leading gold company, Newmont, has suspended all mining operations at its Peñasquito gold mine in Mexico in response to a labour strike notice. This is due to unionised workers at the mine notifying Newmont of pending strike action by its workforce.
On 7th June, the National Union of Mine and Metal Workers of the Mexican Republic notified Newmont of strike action due to a dispute between itself and the mine company over profit sharing. The union is calling for an increase in the profit-sharing benefit provided for in the Collective Bargaining Agreement (CBA) from 10% to 20%.
Newmont hopes to resolve disputes in “good faith”
Peñasquito has previously encountered strike action in 2019, where a blockade was established at the mine after a dispute between the company and a trucking contractor, as well as members of the local community. This was a four-week long suspension of mining operations as protestors cited that the way that the mine was being used was negatively affecting the local community.
As reported by Mining Technology, the Peñasquito mine produced 129,000oz of gold in 2019. Based on an average closing price across 2019 of US$1,393.34, this meant the mine produced more than £179m (US$225.16m) of gold. However, the publication also raises questions over the extent of which the mine is affecting local communities.
Minera Peñasquito is the largest employer in Zacatecas, Mexico, with a direct workforce of more than 5,000 individuals. The mine supports an additional 28,000 people and their families in neighbouring communities and nationwide who are part of the mine’s local and national supply chain.
Last year in 2022, Peñasquito contributed US$1.9 billion in economic value to Mexico. This includes US$643m in employee wages and benefits, tax and royalty payments to federal, state and local governments, as well as investments in community infrastructure and water projects.
Newmont stated in its press release that it attempted in “good faith” to resolve disputes regarding the provisions in the CBA, negotiated and signed by both parties for the period of June 2022 through June 2024. On May 30, 2023, Minera Peñasquito paid all eligible employees the mutually agreed upon 10% sharing benefit for 2023 accurately and on time.
The company has recently been expanding across all its operations, which includes the acquisition of Newcrest in May 2023 to continue safe and sustainable gold mining.
Newmont has stated that it remains willing to participate in meetings to reach a resolution in accordance with the CBA.