Southern Copper Awaits Mexico Government Action On Cananea Mine

LIMA, May 03, 2010 (Dow Jones Commodities News Select via Comtex) -- Southern Copper Corp. (SCCO) said Monday that it is waiting for the Mexican government to apply a court decision that has annuled labor contracts at its Cananea mine.

Workers there went on strike in mid-2007, leading to the shutting down of the mine. Workers are still blocking entrance to the mine.

"We are waiting for an application of the law," a company official said in a conference call with analysts.

"The mine is being blocked illegally," the official said, adding that the company has been in contact with the government.

The company said late last week that it is ready to resume operations at Cananea with a new labor contract. Southern Copper also said it's ready to make an investment of $3.8 billion to expand Cananea's production from 180,000 tons to 460,000 tons of copper and 5,400 tons of molybdenum a year.

Union officials said recently that they could set off explosives at the mine rather than turn it over to the company.

A Southern Copper official said that there are no indications of any explosives in the mine and that there are no pending legal issues left outstanding.

The company said that on Feb. 11, a Mexican Federal Court ruled in its favor, while an appeal by workers was dismissed April 21 by the Mexican Supreme Court.

Southern Copper, which has operations in Peru and Mexico, is 80% owned by Grupo Mexico.