Labor Action at La Platosa Resolved
Excellon Resources reported that the labor conflict at the Platosa mine in Durango has been resolved with operations resuming on April 1, 2022. Despite this setback, the company still expects strong results for 2Q22.
In March, the National Metallurgical Mining Union (FRENTE), also referred to as the Platosa Union, initiated labor action at Excellon Resources' La Platosa mine in Durango after the company refused to increase workers' wages. FRENTE argued that there was a violation to the Collective Work Contract because salary increments corresponding to 2022 were not given. Excellon explained it was facing serious problems at its mine, such as drainage issues, price increases and legislative changes.
Last week, Carlos Pavón Campos, Leader of the Platosa Union, denounced that after the start of the strike, miners from the union had been harassed and sabotaged by Servicios San Pedro, a company part of Excellon. The latter highlighted that its mines in Mexico operate under the principles of inclusion, respect, dialogue and equality among all stakeholders.
At the beginning of March, Excellon said that the company and the union had agreed in principle on the terms for the 2022 collective bargaining arrangement following numerous concessions, announced Brendan Cahill, President and CEO. Unfortunately, the agreement fell through, leading to union action. Nonetheless, today the enterprise announced the resolution of the action.
“We are looking forward to the immediate resumption of normal mining operations at Platosa,” mentioned Cahill. “Our 1Q22 production and financial results will be impacted by this labor action but we intend to continue the solid production we reached in January and February into 2Q22. We thank our staff and workers for their patience and perseverance in moving this issue through to a resolution. We hope to resume our longstanding positive relationship with the National Metallurgical Mining Union through the remainder of the mining operation.”
During the process of negotiation, Durango’s government intervened as mediator between the two parties to prevent a cease of activities at the mine. The negotiation revolved around silver, zinc and iron operations. Israel Soto Peña, Durango’s Minister of Work, constantly approached the involved parties trying for an environment of cordiality to prevail by respecting negotiation liberties and the autonomy of the union to make a decision. The case was handed over to the Federal Center of Conciliation and Labor Record, as it is the entity responsible for these matters. The Ministry of Labor and the Ministry of Economic Development of Durango contributed as intermediaries to resolve the situation.
At the beginning of the year, Excellon Resources announced that the company would evaluate the economic viability of operating its Platosa project beyond 2H22. Over the last two years, the company has faced the impact of dewatering rates, an increase in consumables prices, legislative changes and labor actions from the mine’s union. The company said it would provide an update on its decision as its mining plans for 2022 are being carried out, which include advanced exploration work and strategic alternatives to unlock the value of its main assets.