Newmont asks court to decide if Peñasquito strike is justified

After 60 days of being halted due to a strike, the future of Mexican precious metals mine Peñasquito depends on the decision of a judge since the company presented legal measures before the federal labor court for collective affairs asking it to decide on the merits of the union’s claims.

On June 7, some 2,000 members of the mining, metallurgical and steelworkers’ union led by Napoleón Gómez Urrutia, who is also a pro-government senator, voted to go on strike, alleging non-compliance with payments and the collective agreement signed in June 2022.

Operator Minera Peñasquito, the local unit of US company Newmont, said in a statement on Tuesday that "it has proven that it complied with the calculations and payments of the PTU [profit-sharing scheme] in accordance with the law and the collective bargaining agreement, and based on the audited results of the fiscal year 2022.”

“This imputability phase [asking the court to decide if the strike is justified] that the statement cites is the moment when the authority is going to get into the substance of the dispute,” Carlos Ferran, coordinator of the labor commission of the Mexican Bar Association, told BNamericas.

“What the company is doing is triggering the process because 60 days have already passed, and the law says very clearly that for the company to be to challenge the strike, 60 days must pass,” said Ferran.

The Peñasquito mine (pictured), in Zacatecas state, was Mexico's top gold producer in 2022 with output of 566,000oz, according to mining chamber Camimex. Denver-based Newmont is the world's largest gold producer.

In the statement, the Newmont subsidiary reiterated that the strike impacts: (i) the income of more than 5,000 families of employees and contractors; (ii) more than 28,000 indirect jobs that depend on the Peñasquito value chain; (iii) the profits and consequently the PTU of the following year; (iv) the economy of 25 communities in the area of influence of the mine; and (v) additionally, it compromises sustainability and future investments, necessary to maintain Peñasquito's level of operations.

“The company's priority is to reach a reasonable solution that allows the safe restart of mining activities as soon as possible, but at the same time guarantees a viable future for all and sustains the necessary investments to maintain Peñasquito's operations,” it said. 

The labor lawyer stressed that before a 2019 legal reform, only the union had the right to activate the imputability clause during a strike, at any time, but not the company. “60 days is still an eternity, but it's better than never. It is one of the advances,” he said.

"This is entering a judicial phase, where the court is already involved and is going to decide if the union was right or not... From what I see, they [Minera Peñasquito] are confident that they did everything right, so they are going to wait," Ferran added.

The company indicated in the statement that although the federal court is not subject to a specific term to resolve the issue, it trusts "that Mexican justice will act with the greatest responsibility and in a timely manner."

In June, however, a Mexico City labor court declared that the strike at Peñasquito was legal, after the judge confirmed after recounting the votes that, of 1,962 workers entitled to vote, 1,949 decided to stage the strike and nine voted against.

"We are convinced that Peñasquito has the potential for a bright future, so generating confidence for the markets, legal and labor certainty, is essential for Mexico to remain competitive and have the ability to attract and retain greater investment that continues to generate jobs for thousands of Mexican families”, added the Newmont subsidiary.