Torex Gold today announced the withdrawal of a legal challenge by Los Mineros workers union to be the legally-constituted union for the El Limón Guajes (ELG) mine in Guerrero. This marks the end of a five-month blockade on the gold operator’s mine. On April 6, a Torex press release reported that negotiations between community leaders led to the official end of the blockade and resumed mining activities in the ELG pit.

Torex Gold’s El Limón-Guajes Mine, Guerrero

The blockade began on Nov. 3, 2017, when “a group of approximately 20 local unionized workers illegally blockaded the main gate to the ELG mine, demanding a change in labor union,” according to the company.

Stanford, speaking in a February interview with Mexico Mining Review, explained that over 50 percent of the mine workers chose to subscribe to the Confederation of Workers of Mexico Union (CTM) but this was challenged by the National Union of Mining, Metallurgical, Steelmaking and Similar Workers of the Mexican Republic (Los Mineros), led by controversial figure Napoleon Gómez.

“There is a perfectly legal process for sorting matters like that out – employees go through a government-sanctioned independent ballot,” explained Stanford. “(Los Mineros), instead of following the legal process, decided to blockade the mine and shut down operations, which is counter-intuitive. When taking into account the multiplier effect, it probably threw 7,000 people out of work, despite the fact that a union is supposed to look out for the best interests of the employees.”

Supported by the state government and the local community, in January 2018, Torex was able to reopen the mine by forging a new access route. “The other surrounding communities actually came in and helped us open up a new access route so we could re-start operations,” said Stanford. “It is because of the communities that we are back to work.”

Nevertheless, the blockade cost the company financially as earnings from mine operations plummeted to US$54.7 million for the year ending 2017, compared to US$119.9 million for the same period in 2016. Net loss was US$12.6 million in 2017 compared to a net income of US$3.2 million in 2016. The company’s production reached 240,873 ounces, missing guidance despite having been lowered to 300,000 ounces from an original guidance of 350-380,000 ounces.

The leader of Los Mineros – Napoleon Gómez – has hit the headlines in recent months. The mining union leader fled to Canada in 2006 after an explosion at the Pasta de Conchos mine in Coahuila left 65 workers dead. Now, reports have emerged that Presidential candidate Andres Manuel López Obrador wants to give Gómez a position in the Senate if he succeeds in entering Los Pinos.

 

The interview with Fred Stanford is an exclusive preview of the 2019 edition of Mexico Mining Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy of Mexico Mining Review 2019 or check out the digital edition.

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