Newmont, the world’s largest bullion producer, incurs a $3.7 million loss every day at its Peñasquito gold mine in Mexico, said the mine's representative on social media.
Peñasquito, a gold mine in the center-north region of Mexico, is a major supplier of gold, silver, zinc and lead. On June 7, some 2,000 members of the union of mining, metallurgical and steelworkers voted to go on strike after claiming the company had not complied with the collective bargaining agreement and PTU payments, and demanded an increase in the profit-share payments from 10% to 20%.
The action costs Newmont $1 million a day in maintenance costs and $2.7 million a day in lost revenue. The financial impact of the strike will likely lead to mine not turning a profit this year, the company said. During the second quarter of 2023 when the strike began, Peñasquito incurred $23 million of operating costs and $15 million of depreciation and amortization due to the suspension of operations.
The more than two month-long strike at the gold-silver mine "is forcing us to critically review our investments in Mexico," Newmont's CEO Tom Palmer said, adding that the company is “not willing to solve this at any cost.”
Palmer urged the workforce to end the strike and return to their jobs, while the company continues to negotiate with union leaders to find "a fair and sustainable solution to this very disappointing dispute."
Peñasquito produced 566,000 ounces of gold and 29.7 million ounces of silver last year.
Theodor Lisovoy, Editor in Chief of the European bureau, Rough&Polished
