| | |  News Around the Republic of Mexico 
Union Blames Canadian Firm for Conflict at Shuttered Mexican Mine
 Latin American Herald Tribune
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June 20, 2010
 |  | The union, which accuses the Mexican government of siding with the company, is demanding a bonus of 50,000 pesos per worker in the absence of a profit-sharing arrangement. |  | | |
Mexico City – Canada’s Gammon Gold announced the indefinite suspension of operations at its El Cubo mine in central Mexico over “continued illegal labor disruptions” and “untenable financial demands” by employees, although the mine workers’ union said those allegations are false and that the company is to blame for the conflict.
The Halifax-based firm said in a statement that it has dismissed 397 union workers and is in the process of filing criminal charges against seven union executives.
El Cubo is located 10 kilometers (6.2 miles) east of Guanajuato, capital of the like-named state, and covers an area of some 14,000 hectares (34,570 acres).
For its part, the SNTMM miners and metalworkers union – headed by Napoleon Gomez Urrutia, a fugitive from justice who is currently living in Canada – said in a statement that the company’s assertions are “false.”
According to Jose Barajas, SNTMM’s secretary-treasurer, the miners’ only demand is that “they be given their legally entitled share of the (company’s) profits,” adding that Gammon agreed to that condition when it “requested the change in the work day from eight to 10 hours daily.”
The union, which accuses the Mexican government of siding with the company, is demanding a bonus of 50,000 pesos ($3,968) per worker in the absence of a profit-sharing arrangement.
Gammon Gold said in a statement that, since it acquired the mine, it “has believed that El Cubo is a modest-sized operation with the potential to be reasonably economic; however its economic viability has been wholly undermined by a legacy of unacceptably low union productivity.”
“This low productivity arises from an outdated collective agreement and an interfering union executive office that appears to have put its own interest ahead of the livelihood of its workers, their families and local communities,” the statement continued.
El Cubo will be placed on “care and maintenance” until the Canadian company determines its next course of action, Gammon said.
The firm said that since 2008 it has invested in new equipment at El Cubo, introduced more efficient mining techniques, launched a more effective work schedule, significantly improved safety at the mine, established a production bonus program for employees and “launched an aggressive and strategic exploration program.”
“Nonetheless,” Gammon said, “this investment has not delivered the anticipated productivity improvements due to the continued resistance of union workers to fully leverage these strategic initiatives.”
Gammon Gold said that in the judgment of management and the board of directors, the company must “take a firm and decisive stance with the union,” adding that it is confident that the decision to halt operations at the mine is “in the best interests of the company’s shareholders.”
“Management and the board are frustrated that the decision to close this mine was required and regrets the unwillingness of the union to work collaboratively with management,” the statement quoted Gammon Gold President Rene Marion as saying.
Gammon Gold, which posted $207 million in revenue from gold and silver mining operations in 2009, operates exclusively in Mexico; in addition to El Cubo, the company also operates a larger gold-silver complex, known as Ocampo, in the northern state of Chihuahua.
Gammon also is carrying out exploration work at the Guadalupe y Calvo gold-silver mine in Chihuahua and recently acquired the El Mezquite and Venus projects in the states of Zacatecas and Chihuahua, respectively.
The SNTMM is known for staging periodic job actions at Mexican mines, including an almost three-year-long seizure of Cananea, Mexico’s largest copper mine, that ended earlier this month when police removed protesters and secured the facility.
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