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Goldcorp shuts biggest gold mine after week-long blockade
[VANCOUVER] Goldcorp Inc said on Monday it was temporarily shutting down its Peñasquito gold mine in Mexico as it was unable to safely continue operations due to a week-long blockade by a trucking contractor, sending its shares down nearly 5 per cent.
The world's No 3 gold miner by market value said it was unable to bring in food, water and fuel for the 750 people on the site, which has been blockaded by a contractor concerned about losing business due to efficiency improvements at the mine.
A contingency plan was in place that would allow mining and processing to be restarted immediately once the dispute was resolved, Vancouver-based Goldcorp said. It did not expect the shutdown to impact 2016 production or cost estimates.
A restart of the mine earlier this year after Goldcorp performed its first site-wide shutdown, proved to be "somewhat challenging", Desjardins analyst Michael Parkin said in a note to clients. "We thus view this as a potential risk" for Goldcorp's fourth quarter results, Mr Parkin said.
Goldcorp expects the Peñasquito mine in northern Mexico to produce between 520,000 and 580,000 ounces of gold this year, equal to around 19 per cent of the company's total forecast output of 2.8 million to 3.1 million ounces.
The blockade is the latest setback for Goldcorp, which has experienced a number of operating problems at its mines in the past year, causing its stock to trail peers.
Goldcorp said it had taken legal steps, including filing criminal charges against the protesters but that it also was ready to talk with the contractor's representatives.
Protest leaders "have refused numerous efforts to meet with Goldcorp representatives and government officials to resolve the dispute", Goldcorp spokeswoman Christine Marks said in an email.
One of the protest leaders, Felipe Pinedo said last week, protestors wanted to speak to senior Goldcorp officials, not those at the mine.
He said landowners were also part of the blockade, which began on Sept 26. Protesters' demands include payment for environmental damages, jobs, and water for their communities.
In late August, Reuters reported on a long-running leak of contaminated water, which had not been disclosed to the public, at the mine, Mexico's biggest gold deposit.
Goldcorp's shares were down 4.9 per cent at C$20.60 on the Toronto Stock Exchange.
That was more than the 3 per cent fall in the S&P/TSX Global Gold index, which was hit by a weaker gold price.