The Zacatecas Congress unanimously approved the intervention of the Federal Ministry of the Interior and the Zacatecas General Ministry to resolve the conflict between Newmont Peñasquito and the Mining Union as soon as possible.
PRI Congresswoman María Ávalos proposed the measure, considering the blockade’s serious impact on the economy of Zacatecas, employees, families and all those involved in the mining production chain. In addition, Ávalos criticized that state and federal authorities have not taken this blockade seriously, making the situation even worse.
Currently, Peñasquito is the second largest employer in Zacatecas, employing over 5,000 people directly. Furthermore, the company said that the mine's impact on production and promotion of other sectors through local suppliers is equivalent to 13% of the state’s GDP. Newmont added that the accumulated losses caused by the strike amount to over US$562 million, adding that this strike will impact future profit sharing as the strike will impede the company from generating profits. Ávalos stressed that in 2022, the mining company contributed US$1.9 billion to the country, of which US$643 million were allocated to salaries, benefits and royalty payments to the government.
Acknowledging the importance of Peñasquito for Zacatecas and the country, CAMIMEX, CIMMGM and AIMMGM have also urged the federal government to mediate the issue before a court intervenes. The main mining associations in Mexico said it is crucial to terminate the strike as its repercussions impact the whole sector.
What Happened at Peñasquito?
On June 7, 2023, 2,800 Newmont workers demanded higher profit payments from the company and went on strike. Miners from SNTMMSSRM accused Newmont of violating their 2022-2024 collective labor agreement, arguing that profit payments should increase from 10% to 20%. Newmont argues that Minera Peñasquito paid in time and urged the union to abide by the mutually agreed Collective Bargaining Agreement (CBA) negotiated and signed by both parties in June of 2022, as reported by MBN.
The strike has had national repercussions regarding mineral production. According to INEGI, mining contracted 2.9% year-on-year in July 2023 as the strike reached its second month. There has been a general downward trend in production over the past five months, but Peñasquito represents the largest drop, so far. Overall, the mining sector saw a 1.4% production decline from June to July 2023, BNamericas noted.