Mexican gold production plummets as Peñasquito strike drags on
Mexico’s gold output plummeted 26% year-on-year in June, hit by the strike at Newmont-owned Minera Peñasquito, the country's main producer of precious metals.
The drop is the steepest since the 37.6% decline in May 2020, when mining was restricted amid the COVID-19 pandemic.
Compared to May, gold production fell 20% to 5,235kg (168,000oz). In the first half, the fall was 2.8%, according to statistics agency Inegi.
On June 7, some 2,000 members of the union of mining, metallurgical and steelworkers at Peñasquito voted to go on strike after claiming breaches of the collective bargaining agreement and the profit-sharing scheme PTU, and demanded that workers’ allocation of earnings be increased from 10% to 20%.
On August 8, the subsidiary of the US company asked a federal labor court to analyze the merits of the union's claims. The strike at the Peñasquito mine in Zacatecas state is costing the company some US$3.7mn a day, it says.
The suspension of operations also affected production of other metals in June, with silver output down 12%, while that of zinc and lead each fell 21% year-on-year.
In 2022, Peñasquito produced 566,000oz of gold, 29.7Moz of silver, 171,004t of zinc and 67,585t of lead, according to mining chamber Camimex.
“Peñasquito is the second largest mine in the country in size, and it is a very, very important producer of zinc, lead, gold and silver. Therefore, there are also repercussions of the strike on the production of the first two [metals],” geological engineer Armando Alatorre (in photo) told BNamericas.
"I cannot guarantee that it is the only factor, but it is a significant one," he added.
The fall in Mexico’s year-on-year silver production in June to 304,130kg was the steepest drop since July last year, and was down 10.4% compared to the previous month, according to Inegi. In the first six months, the decline was 4.1% compared to the same period 2022.
Zinc production was 20,220t compared to June last year, while lead output was 9,232t, according to the agency. In the first half, however, zinc production rose 2.2% while that of lead fell 3%.
Alatorre said shortly after Peñasquito began operations in 2010, the mine became the country’s main producer of the four metals.
Overall mining and metallurgical production – including extraction, smelting and refining – fell 8.7% in June, according to Inegi. Production of coke, iron pellets, gypsum and non-coking coal also fell, while that of fluorite, sulfur and copper rose.
“To the extent that the strike [at Peñasquito] persists, one would have to assume that the outlook for 2023 will be negative. How much? Time will tell,” said Alatorre.
Source: https://www.bnamericas.com