19 | ENE | 2020
Mexican community fights the biggest gold producer in the world
The Cedros community wants the mining company to ensure and guarantee water supply – Photo: Ben Nelms /REUTERS

Mexican community fights the biggest gold producer in the world

30/04/2019
16:31
Reuters
Mexico City
Nichola Saminather
-A +A
Newmont Goldcorp Chief Operating Officer, Tom Palmer, said the blockade stemmed from concerns in the local community about water supply and issues with a trucking contractor

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On Monday, Newmont Goldcorp Corp announced it plans to suspend operations at its Peñasquito mine in Mexico, due to a blockade by a trucking contractor and some members of the Cedros community.

The open-pit mine, in the state of Zacatecas, produced 272,000 ounces of gold in 2018, company figures show. It accounts for about 17% of Newmont Goldcorp’s net asset value, according to Scotiabank.

In a statement, the company said the blockade began on March 27, adding that it was working with Mexican authorities to solve the issue.

Newmont Goldcorp shares were down 2.7% to $30.61 by mid-afternoon in New York trading.

“This increases uncertainty surrounding 2019 operating outlook, and the company has not provided guidance on potential timing for a restart of normal operations or expected impact on 2019 production,” Stephen Walker, head of global mining research at RBC Dominion Securities, said.

Peñasquito also accounts for 13% of the asset value of streaming company Wheaton Precious Metals, according to Scotiabank.

The mine is part of the portfolio of Goldcorp, whose acquisition of Newmont was completed this month, becoming the world’s biggest gold producer.

On the company’s first-quarter results call last week, Newmont Goldcorp Chief Operating Officer, Tom Palmer said the blockade stemmed from concerns in the local community about water supply and “some issues around a trucking contractor.”

Felipe Pinedo, a leader of the blockade, told Reuters residents were determined that the mine “should go” if the local water supply was not restored and guaranteed.

Around 1,000 people and 200 trucks were taking turns to enforce the blockade, Pinedo said.

“We expect this to grow,” he added.

Last June, Goldcorp faced a protest led by local truck drivers who blocked the entrance to the Peñasquito mine. They said Goldcorp had reneged on promises to hire locally, but lifted the blockade two weeks later, saying they would negotiate with the company.

In 2017, a group of local residents blocked access to the mine for over a week, demanding the company make good on a commitment to supply nearby communities with water. Goldcorp later said it was able to resume operations without a hit to production.

Peñasquito is the second of Newmont Goldcorp’s mines to have its operations suspended, with the Musselwhite mine in Ontario, which accounts for 7% of production, shut after a fire in March.

Zoé Robledo, the Undersecretary of the Interior and a Morena lawmaker, José Narro Céspedes, will meet with the affected community to solve the issue.

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