Korea Resources’ Labor Dispute Intesifies

Workers at Korea Resources Corporation’s Boleo mine in Baja California continue to strike and block mining operations to protest low profit sharing payments. The striking employees have said they are open to establish a dialogue and find the best way to optimize operations, but only after an agreement is reached to end the strike.

On July 6, Boleo’s miners announced that they would start a strike due to the low payments, which they describe as a “mockery.” The National Union of Mining, Metallurgical, Steel and Similar Workers of the Mexican Republic (SNTMMSSRM), which represents the workers, explained that the company offered a salary increase of 6 percent in May and another 0.5 percent in October. However, the offer was not sufficient to meet the demand of the workers.

The union announced that after a meeting, its members agreed that during the strike no employee would enter the facilities at any time. Spokesman Rodríguez Gutiérrez said the union had denied officials from the Mexican tax authority (SAT), the Attorney General's Office and National Guard entry to the Boleo mine to officials. After this, the officials tried to intimidate the workers.

SNTMMSSRM announced that it was open to negotiations with company representatives. Together, they could implement new systems to optimize productivity, costs and processes. However, these advancements would only become possible once all 1,076 workers returned to do their jobs. Meanwhile, Rubén Rosas, Head of the Legal Department, local subsidiary Minera y Metalúrgica del Boleo (MMB), said the wstrike is jeopardizing the future of the operation.

Rosas explained that the Boleo mine has generated losses in the past five years and is expected to lose money until 2023 or 2024. In 2021, financial losses stood at US$149 million, which was less than the US$270 million lost in 2020 and the US$302 million lost in 2019. Moreover, the company stressed that Boleo needed additional financing of US$55 million from the South Korean government, which controls Korea Resources, in 2021.

In recent years, labor conflicts and strikes have become a more common problem for Mexican mining companies, since workers are requesting higher bonuses on the back of higher resource prices and reforms to profit-sharing regulation. Among the companies that have reported the biggest labor conflicts in 2022 are Grupo México, Excellon Resources and ArcelorMittal.