Workers block access to First Majestic’s La Encantada mine in Mexico
Shares in Mexico-focused First Majestic Silver Corp. (TSX:FR) (NYSE:AG) were slightly down Wednesday morning after the company revealed a group of unionized workers halted activities and blocked accesses at La Encantada silver mine.
The Canadian miner said the illegal labour action was in response to the company’s recently announced bonus offer in lieu of profit sharing, which is backed by the country’s national union of miners, metallurgists and steelworkers.
First Majestic’s stock fell 1.53% to Cdn$11.59 in Toronto on the news at noon and it was trading just 0.57% down in New York at the time.
The Vancouver-based silver producer said that it was not clear how long the blockade would last, though it noted it was working with the leadership of the National Union in order to resume operations and bring miners back to work.
“This is a minor setback in our plans for renewed investment at La Encantada focusing on underground development and brownfields exploration, which will over time result in increased throughput rates and higher head grades,” Keith Neumeyer, the company’s president and CEO said in the statement.
La Encantada, located in the northern Mexican state of Coahuila, is Silver Majestic’s largest mine and the one where the firm is currently investing the most.
It warned that these types of actions, which are increasingly occurring in many other Mexican mining operations, could soon scare investors away, as metal prices are low, but taxes and fuel costs continue to climb.