Newmont's Mexico unit expects no profits this year due to strike

Newmont's Mexican subsidiary, Minera Peñasquito, will not post a profit this year due to the strike that began on June 7 at its gold-silver mine, the Zacatecas-based company reported.

In a statement, the operator of the Peñasquito mine said that as a consequence of the strike the company's financial results for the second and third quarters have been seriously affected.

"According to the data, our financial projections indicate that, due to the strike, at the end of 2023 the company will not show profits, and therefore there will be no profits to distribute to the workers for this fiscal year," the company said.

Some 2,000 members of the union of mining, metallurgical and steelworkers voted to go on strike after claiming breaches of the collective bargaining agreement and of payments under the profit-sharing scheme (PTU), and demanded that workers’ share of earning increase from 10% to 20%.

The nearly three-month strike is forcing Denver-based Newmont, to critically review its investments in Mexico, CEO Tom Palmer said earlier this month.

He insisted that the company has complied with the law and the collective bargaining agreement, so it will not make any additional payment under the PTU.

"We reiterate once again that our priority is to resume activities safely for the benefit of all parties, so we will continue working to reach an agreement that guarantees a viable future for Peñasquito," he said in the statement.

In 2022, Peñasquito produced 566,000oz of gold, 29.7Moz of silver, 171,000t of zinc and 66,000t of lead, according to Mexican mining chamber Camimex. The mine is Mexico’s largest producer of all four metals.

Newmont estimates the economic impact of the strike at approximately US$1mn a day in costs required to maintain the suspended operations in addition to US$2.7mn a day in lost revenue.