Torex restarts operations in Mexico despite blockade

Canada’s Torex Gold Resources (TSX: TXG) announced this week that a team of unionized employees and management has been gradually restarting priority areas of its El Limón-Guajes mine, located in the state of Guerrero and one of the richest open-pit gold deposits in Mexico.

In an official statement, the Toronto-based miner said that more employees will be called back as additional sections of the mine and plant are brought on line.

According to the company, the resuming of operations has been possible thanks to the community of Nuevo Balsas and the Confederation of Mexican Workers (CTM in Spanish), the latter currently in charge of the mine's collective agreement. Both groups worked with management to re-establish plant access through a road used during construction.

"Unfortunately, a subset of the Real del Limón Ejido continues to actively support the blockade and the Los Mineros Union, which does not represent the ELG’s already-unionized workers," Torex explained in the press release.

The miner said that some people have been threatened with violence if they go back to work. However, management assured many are still committed to the restarting of operations, particularly because the Federal Gendarmerie is now on site. "Torex hopes the Gendarmerie will hold their ground if the blockaders attempt to deny others their right to work, or to deny owners their right to benefit from the productive assets they have built," the communique reads.

The other side in the conflict has made public similar allegations of threats against those who are rallying.

The blockade at ELG led by the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic, known as Los Mineros, began on November 3, 2017. The protesters, led by expat in Vancouver Napoleón Gómez Urrutia, say that the current union was not democratically chosen but imposed by the company and that workers want Los Mineros to take charge of their collective agreement.

The conflict has lasted long enough that Torex had to suspend employment contracts for its workforce in Mexico back on December 16, 2017. A few days prior to the decision, the Canadian firm organized a consultation process and reported that 274 of the 520 people eligible to participate agreed to abort the strike and go through a mediation process.

The process, overseen by the Federal Labour Board, has already started but has experienced some delays. The idea is to set up the foundations for a new consultation in which workers will decide which union ends up managing their contracts. However, Torex said the union in conflict has recently dismissed that objective. "In media interviews, Los Mineros has been reported as having dropped the pretense of wanting to ‘win’ the collective agreement through a vote by secret ballot of union eligible employees. Instead, it wants the collective agreement to be ‘given’ to them, regardless of the wishes of the majority of employees," this week's release reads. Different media outlets have reported the same information.

A first formal meeting between the parties involved took place on December 13, 2017, and participants were supposed to establish a date for the second secret ballot. Yet, Los Mineros asked for a delay of the decision to establish a vote date until January 30, 2018.

Despite all the conflict, ramping up of operations at El Limón-Guajes allowed the Canadian miner to pour 241,000 ounces of gold and sell 244,800 ounces of gold in 2017.