Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Goldcorp (TSX:G) (NYSE:GG) shares were down Monday almost 3% after the Canadian bullion producer announced a controlled shutdown of operations at its Peñasquito mine in Mexico, following an illegal blockade by a trucking contractor that began last week.
The Vancouver-based miner, which is the world’s-fourth gold producer by output, said the contractor was concerned about losing business after recent efforts to diversify its local transportation supply chain.
Peñasquito is Mexico’s top gold mine and Goldcorp’s largest operation.
Goldcorp noted it had taken legal steps, including filing criminal charges against the protesters. It also said it was ready to negotiate with the contractor’s representatives.
Peñasquito, Mexico’s top gold mine, produced 860,300 ounces of gold last year, or 25% of Goldcorp’s total output.
The mine, Goldcorp’s largest operation, has been a source of headaches for the company this year. A 10-day mill shut down at Peñasquito earlier this year hit second quarter output and the miner’s financial results. In August, Mexican authorities launched an investigation over whether the company had broken any environmental regulations concerning its handling of a long-running leak of contaminated water at the operation.
Shares in Goldcorp were down 2.81% in New York to $16.06 at 11:13 am ET, while they were trading hands at Cdn$21.05 in Toronto, or 2.77% lower than its closing price on Friday.
