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.
A blockade of the Peñasquito mine owned by Goldcorp (TSX:G) (NYSE:GG) could end today following mediation by government officials.
Earlier this week the Vancouver-based bullion producer announced a controlled shutdown of operations at flagship Mexico mine, following an illegal blockade by a trucking contractor which was later joined by farmers in the area that began last week.
Goldcorp said the mine could re-open immediately should the dispute be resolved and wouldn’t impact production or cost guidance for the year
Reuters reports negotiations began Tuesday night and continued Wednesday according to Julio Cesar Chavez, a Zacatecas government official and mediator:
There are 420 police officers at the site and they have cleared three entrances to the mine, Chavez said. One truck brought food into the mine yesterday, and protesters are now being asked to allow another truck to enter with water, he said.
Goldcorp, the world’s-fourth gold producer by output, expected its largest operation to produce 520,000 to 580,000 ounces this year (compared to more than 860,000 ounces last year), nearly a fifth of its total output.
Goldcorp said the mine could re-open immediately should the dispute be resolved and should not impact production or cost guidance for the year.
The mine has been a source of headaches for the company this year. A 10-day mill shut down 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 of Goldcorp trading in New York where the company is worth $11.3 billion, are down more than 13% since the blockade and following the slump in the gold price.
