UPDATE 4-Grupo Mexico Retakes Control of Cananea Copper Mine-Shanghai Metals Market

Hot Keywords

  • Zinc
  • Inventory data
  • Rare earth
  • Copper scrap
  • Copper
  • Evening comments
  • Market commentary
  • SMM
  • Morning comments
  • Aluminium
  • MMi Iron Ore Port Index
  • Futures movement
  • Cobalt
  • price forecast
  • Environmental protection drive

UPDATE 4-Grupo Mexico Retakes Control of Cananea Copper Mine

Industry News 10:26:03AM Jun 08, 2010 Source:SMM

MEXICO CITY, June 7 (Reuters) - Grupo Mexico retook control of Mexico's biggest copper mine after hundreds of federal police dislodged protesting workers on strike for nearly three years, the government and the company said on Monday.

Hundreds of police backed by helicopters arrived Sunday evening, surprising miners guarding the entrance. A company source said the Cananea mine, which once produced 40 percent of Mexico's copper but has been closed since July 2007, could be running again as soon as the end of this year.

The copper pit has enough reserves to be mined for the next seven decades, Xavier Garcia de Quevedo, head of Grupo Mexico's mining arm, told a news conference.

He estimated that the strike caused the company to lose 530,000 tonnes of production worth $3.5 billion.

The raid enraged the national miners' union, which called on the government to withdraw the police. The union was deciding what steps it would take next, a spokesman said.

The government ordered the takeover after a court ruled in February that striking workers could be fired. There was no explanation as to why the government had not acted sooner.

After the police surrounded Cananea, the miners' families marched to the mine's gates where they were met by police firing tear gas, Manny Armenta, a visiting U.S. representative of the United Steelworkers union, said. The U.S. union has backed the miners.

"They caught everyone by surprise. They came in through the back side by the river...They shot tear gas at us," Armenta told Reuters. "Obviously tensions are very high. The miners are very, very upset."

A fire was started in an abandoned company building near the mine but no one was reported injured.

Armenta said the union wants to avoid more violent clashes.

Cananea, near the U.S.-Mexico border, is a potent symbol of the country's labor movement. It was where a clash helped spark the Mexican Revolution in 1910.

"The national mining union holds President Felipe Calderon's government responsible for any violence or bloodshed that may happen now and demands a reversal of this illegal, military invasion," the union said in a statement.

Grupo Mexico said it is beginning to evaluate damage to machines and equipment at the mine after years of disuse.

A Grupo Mexico executive, who asked not to be named, told Reuters the mine could be running by the end of the year, but would not give a precise target date.

"To bring the mine back up to the capacity where it was before will take months," said the source. "We would like to be producing close to capacity before the end of the year."

INVESTMENTS ON HOLD

The union said state police had also raided the Pasta de Conchos coal mine in the northern state of Coahuila, where a massive explosion in 2006 killed 65 workers.

Pasta de Conchos has been shut since then, but the accident remains a flashpoint between the union and Grupo Mexico.

At Cananea miners laid down their tools in July 2007, protesting health and safety standards. A dispute between authorities and the union's leader Napoleon Gomez complicated the strike.

Gomez, reelected by workers but not recognized by the government, is living in Canada to avoid arrest on embezzlement charges he says Mexico has fabricated because of his defense of workers rights.

The company has said it will cost $100 million to repair and replace damaged equipment before the mine can reopen.

Grupo Mexico is offering buyout packages to the striking workers.

The strike held up a $3.8 billion expansion project that would more than double Cananea's capacity to 460,000 tonnes a year from 190,000 tonnes now.

Another $2 billion investment at Grupo Mexico's El Arco project in Baja California has been stalled due to uncertainty caused by the strike, since Cananea has industrial facilities that process copper mined at other sites.

El Arco was expected to start production in 2012 with a capacity to produce 190,000 tonnes of copper.

The two projects, if built, would turn Mexico into the world's No. 2 copper producer, Grupo Mexico's Garcia de Quevedo told Reuters in April.

Grupo Mexico (GMEXICOB.MX) shares ended the day down 3.03 percent at 28.19 pesos per share, in line with a weaker Mexican stock index. ($1=12.91 pesos)
 

UPDATE 4-Grupo Mexico Retakes Control of Cananea Copper Mine

Industry News 10:26:03AM Jun 08, 2010 Source:SMM

MEXICO CITY, June 7 (Reuters) - Grupo Mexico retook control of Mexico's biggest copper mine after hundreds of federal police dislodged protesting workers on strike for nearly three years, the government and the company said on Monday.

Hundreds of police backed by helicopters arrived Sunday evening, surprising miners guarding the entrance. A company source said the Cananea mine, which once produced 40 percent of Mexico's copper but has been closed since July 2007, could be running again as soon as the end of this year.

The copper pit has enough reserves to be mined for the next seven decades, Xavier Garcia de Quevedo, head of Grupo Mexico's mining arm, told a news conference.

He estimated that the strike caused the company to lose 530,000 tonnes of production worth $3.5 billion.

The raid enraged the national miners' union, which called on the government to withdraw the police. The union was deciding what steps it would take next, a spokesman said.

The government ordered the takeover after a court ruled in February that striking workers could be fired. There was no explanation as to why the government had not acted sooner.

After the police surrounded Cananea, the miners' families marched to the mine's gates where they were met by police firing tear gas, Manny Armenta, a visiting U.S. representative of the United Steelworkers union, said. The U.S. union has backed the miners.

"They caught everyone by surprise. They came in through the back side by the river...They shot tear gas at us," Armenta told Reuters. "Obviously tensions are very high. The miners are very, very upset."

A fire was started in an abandoned company building near the mine but no one was reported injured.

Armenta said the union wants to avoid more violent clashes.

Cananea, near the U.S.-Mexico border, is a potent symbol of the country's labor movement. It was where a clash helped spark the Mexican Revolution in 1910.

"The national mining union holds President Felipe Calderon's government responsible for any violence or bloodshed that may happen now and demands a reversal of this illegal, military invasion," the union said in a statement.

Grupo Mexico said it is beginning to evaluate damage to machines and equipment at the mine after years of disuse.

A Grupo Mexico executive, who asked not to be named, told Reuters the mine could be running by the end of the year, but would not give a precise target date.

"To bring the mine back up to the capacity where it was before will take months," said the source. "We would like to be producing close to capacity before the end of the year."

INVESTMENTS ON HOLD

The union said state police had also raided the Pasta de Conchos coal mine in the northern state of Coahuila, where a massive explosion in 2006 killed 65 workers.

Pasta de Conchos has been shut since then, but the accident remains a flashpoint between the union and Grupo Mexico.

At Cananea miners laid down their tools in July 2007, protesting health and safety standards. A dispute between authorities and the union's leader Napoleon Gomez complicated the strike.

Gomez, reelected by workers but not recognized by the government, is living in Canada to avoid arrest on embezzlement charges he says Mexico has fabricated because of his defense of workers rights.

The company has said it will cost $100 million to repair and replace damaged equipment before the mine can reopen.

Grupo Mexico is offering buyout packages to the striking workers.

The strike held up a $3.8 billion expansion project that would more than double Cananea's capacity to 460,000 tonnes a year from 190,000 tonnes now.

Another $2 billion investment at Grupo Mexico's El Arco project in Baja California has been stalled due to uncertainty caused by the strike, since Cananea has industrial facilities that process copper mined at other sites.

El Arco was expected to start production in 2012 with a capacity to produce 190,000 tonnes of copper.

The two projects, if built, would turn Mexico into the world's No. 2 copper producer, Grupo Mexico's Garcia de Quevedo told Reuters in April.

Grupo Mexico (GMEXICOB.MX) shares ended the day down 3.03 percent at 28.19 pesos per share, in line with a weaker Mexican stock index. ($1=12.91 pesos)