Striking workers at Mexico’s biggest gold mine have plenty of funds available to extend a stoppage as a dispute with owner Newmont Corp. enters a second week, a union official said Tuesday.
About 2,000 unionized workers at the Penasquito mine downed tools to push for clarification over profit-sharing terms and alleged contractual breaches related to overtime payments and safety, said Jorge Ramon Monsivais, labor secretary of the Sindicato Minero union.
Newmont said the Penasquito mine complies with the collective bargaining agreement signed by both parties in June last year. “The company reiterates its interest in finding a solution that allows for the end of the strike, benefiting all parties involved,” it said in a statement late Tuesday.
Striking workers at Penasquito have a so-called “resistance fund” to prolong the strike and would receive the support of associated members if those funds were to run out, Monsivais said. “They’re willing to continue the movement until this is cleared up,” he said in an interview.
Read More: Newmont Suspends Mexico Mine Over Labor Dispute
The strike marks the third labor dispute since Newmont bought Penasquito from Goldcorp Inc in 2019. The mine, located about 480 miles northwest of Mexico City, is a major producer of silver and also churns out lead and zinc in addition to gold. In an analyst note, UBS estimated that Newmont’s earnings before interest, taxes, depreciation and amortization would decrease 3.6% in the second quarter if the suspension lasts for one month.
Even though the mine employs directly and indirectly another 3,000 people, production has been suspended with a skeleton crew performing only basic tasks, Monsivais said.
While Newmont said workers are pushing for an increase in profit-sharing from an agreed 10% to 20%, Monsivais said demands are centered around a clarification on how the plan is calculated rather than a percentage increase.
Newmont said in the statement that on May 30 the Penasquito mine paid to all eligible employees the profit sharing, equivalent to 10% of the taxable profit, and added that the union request to increase it to 20% represents twice the amount stipulated by law. “The company invites the union to engage in constructive dialogue and provides authorities with all requested information.”
Penasquito is Newmont’s third-largest mine by sales. It brought in $2.8 billion in sales in 2022, although that was down 17% from the year before as production lagged. Output fell 38% in the first quarter, according to Newmont’s latest quarterly report.
--With assistance from Alex Vasquez.
(Updates with Newmont statement in third and eight paragraphs. Changes headline.)