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.
Ongoing stoppages at Newmont Goldcorp Corp’s Penasquito gold mine in Mexico are costing “millions” every day to both public coffers and the company, a senior Mexican official said on Thursday, urging a solution that will restart operations.
Speaking to reporters in Mexico City, Francisco Quiroga, the deputy economy minister responsible for mining, said he wanted operations at the country’s largest gold mine to continue.
The open-pit mine in northern Zacatecas state produced 272,000 ounces of gold in 2018
“Every day that it’s shut, there are millions lost for the company and for public coffers,” Quiroga told reporters. “We want a solution that allows mining activities to continue.”
He did not give more details of the losses to the nation or the company, which is the world’s biggest gold producer. However he said Penasquito last year contributed 700 million pesos ($37 million) to a social fund paid from a mining tax.
The open-pit mine, in northern Zacatecas state, produced 272,000 ounces of gold in 2018, company figures show. It accounts for about 17% of Newmont Goldcorp’s net asset value, according to Scotiabank.
Truck drivers have blocked access to the mine since March 27 and the protesters say its operations caused a water supply to dry up. At the end of April the company suspended production, then payments and benefits to villages surrounding the site.
Quiroga said it was not clear whether the water supply dried up as a result of the mine, but that the company had to be involved in resolving “legitimate demands” about water.
“The loss of water is paid with water,” Quiroga said, adding that any solution should be transparent and public.
The miner says a local trucking company and a group of people from San Juan de Cedros, one of the villages near the mine, demanded the company pay $442 million for the “presumed effects on a body of water in the said community.”
“We want to help solve any water issues in the community but are not willing to give into extortion disguised as a social issue,” said Michael Harvey, Director, Corporate Affairs, Newmont Goldcorp Mexico.
(By Sharay Angulo, Noe Torres and Frank Jack Daniel; Editing by Dave Graham and Susan Thomas)
