The Strike Ends at Peñasquito Mine in Mexico
The strike was initiated by the union demanding the company pay additional profit sharing, equivalent to double the amount agreed upon one year ago, along with other alleged violations of the collective bargaining agreement. “This unnecessary strike has caused significant hardship for all of our employees, contractors, host communities, suppliers and customers,” said Tom Palmer, president and CEO, Newmont. “We will continue to honor our commitments, comply with the law and the collective bargaining agreement, and work to protect the long-term value of Peñasquito.”
Newmont highlighted the key terms of
the agreement, which include:
• Newmont will not pay any additional incremental profit sharing for 2022. This was the basis for the strike, and Newmont said the profit sharing it paid this year fully complied with Mexican law and the collective bargaining agreement.
• If, as a consequence of the strike, the Peñasquito mine reports no profit in 2023, then Newmont agrees to pay an additional bonus in Q2 next year, equivalent to two months’ wages as the company recognizes the hardship employees have experienced given the duration of the strike.
• Newmont will pay employees a fixed amount, roughly equivalent to 60% of wages lost, since the strike began on June 7, 2023. The company explained that this payment is intended to mitigate the financial impact that the strike, initiated by the union, has had on the company’s workforce.
In addition, as part of the separate, annual wage negotiations under the collective bargaining agreement, Newmont and the union have agreed to an 8% wage increase, in line with Mexican mining industry wage increases for 2023. These wage negotiations were not part of the union’s claims as grounds for taking the strike action.
Newmont said its priority is to safely return the workforce to this Tier 1 operation while ensuring an orderly rampup in production. It is expected to take several weeks to achieve stable production levels.
In 2022, Peñasquito contributed $1.9 billion in economic value to Mexico, including $643 million in employee wages and benefits, taxes, and royalty payments to federal, state, and local governments, and investments in community infrastructure and water projects. Minera Peñasquito is the second largest employer in Zacatecas, Mexico, with a workforce of more than 5,000 individuals. The mine supports another 28,000 people and their families, in neighboring communities and across the country, who are part of the mine’s local and national supply chain.