Dia Bras settles strike action in Peru

Vancouver – The road to Dia Bras Exploration‘s (DIB-V) Yauricocha mine in Peru’s Yauyos Province is now open after a blockade was cleared.

The news came five days after the company announced that illegal demonstrators had blocked the road and caused minor damage on Dia Bras’ property.

At the time of the protest the company stated that it “expects that appropriate legal measures will be taken to ensure order is re-established” while also noting that “the company continues to foster a dialogue with representatives of the communities from the area, with constant mediation from the corresponding government authorities.”

In announced that the blockade had been lifted, Dia Bras stated that it had met with local authorities and neighbouring communities and “reached agreements which are in line with the company’s policies on social and environmental responsibility.” The company did not respond to a request for further details.

From January to June the Yauricocha underground mine produced 1.16 million oz. silver, 9.26 million lbs. copper, 16.67 million lbs. lead and 23.6 million lbs. zinc. Dia Bras acquired the mine as part of its $275.6 million acquisition of Peruvian company Sociedad Minera Corona in May.

The company’s share price recently closed at $2.05, while it hit a 52-week low of $1.85 the day it announced the blockade had been cleared.

Dia Bras’ resolution of the blockade comes as mining companies struggle with their own unrest in Peru. Already this year Peru has suspended development on Bear Creek Mining‘s (BCM-V) Santa Ana silver project in June and Southern Copper‘s (SCCO-N) Tia Maria copper project in April after violent demonstrations at both projects left several protestors dead. Opposition to both projects centred around water and environmental contamination.

Meanwhile Newmont Mining (NEM-N) and Peruvian partner Buenaventura were recently forced to suspend work at the Yanacocha gold mine after protesters blocked road access, with some protestors going so far as to torch contract mining vehicles causing some $2 milllion in damages.

The protest ended four days later so that all parties could engage in government-backed talks, but flared up again days later. The protests centre around expansion plans for the Yanacocha mine, which is already the largest gold mine in Latin America.

At US$4.8 billion, the La Conga expansion project at Yanacocha is set to be the largest mining investment ever in Peru and the largest made by Newmont worldwide. But protestors have demanded the project be shut down because of concerns over potential water contamination.

For Freeport-McMoRan Copper & Gold (FCX-N), the problem is workers asking for higher pay, rather than locals opposing its projects.

Workers at the company’s Cerro Verde copper mine in Peru went on strike on September 29 asking for better pay, with the strike ongoing. Freeport-McMoRan has kept the mine operating with reduced staff but it is unclear how long it can sustain scheduled production.  The company recently declared force majeure on shipments from its Grasberg mine in Indonesia as workers there continue with strike action and wage demands.