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.
Newmont (NYSE: NEM) (TSX: NGT) issued a communiqué asking the Mining Union of its Peñasquito gold-silver operation in north-central Mexico to end the strike the group launched almost 40 days ago.
In the statement, which was made public over social media, Newmont said that the protest action will have an impact not only on next year’s profits but also on the income of more than five thousand families, including people that collaborate in one way or another with the work at Peñasquito, as well as contractors.
According to the US miner, 25 communities in the area of influence of the mine, and some 28,000 indirect jobs are also being affected by the strike.
Newmont has had operations suspended since June 8, a day after nearly 2,000 unionized workers downed tools over a dispute regarding profit-sharing and alleged contract breaches. The Denver-based firm has said that workers are demanding a larger share of the mine’s profit, from the 10% agreed on in 2022 to 20%.
“In compliance with the collective agreement signed in 2022, on May 30, 2023, Minera Peñasquito paid all eligible employees the benefit of worker participation in the company’s profits, estimated at 10% without a cap. This payment was equivalent to 13 months of base salary for each unionized person,” the communiqué reads.
The Mining Union’s secretary Jorge Ramon Monsivais, however, told MINING.COM via email that part of their demands are centred around a clarification on how the plan is calculated rather than a percentage increase.
But in this weekend’s release, the company stressed that, contrary to the union’s claims, the distribution of profits done last May to Peñasquito’s unionized workers was done following what was established in the collective agreement and the applicable laws and regulations.
Newmont also noted that if the union doesn’t agree with the way workers’ participation in the profits has been calculated, there are negotiation pathways through Mexico’s Tax Administration Service that can be taken without having to resort to a stoppage.
The temporary halt at Mexico’s biggest gold mine in Zacatecas state forced Newmont to declare force majeure on deliveries of some metal products from the mine.
