Strike at Newmont’s Peñasquito ends with 8% raise

Workers at Peñasquito, Mexico’s largest gold mine, accepted a proposal from operator Newmont (NYSE: NEM; TSX: NGT) late on Thursday, ending a four-month-long strike that cost the miner millions of dollars a day.

Peñasquito workers will receive an 8% pay increase for each shift, effective retroactively to Aug. 1, the union said in a statement. Each of the nearly 2,000 unionized workers will also get an equal share of the 152-million Mexican peso ($11.3 million) bonus given by Newmont.

The union had also demanded a 20% share of the mine’s profit, larger than the 10% agreed in 2022. This dispute, the union said, will be decided by Mexico’s tax agency, while workers get 10% of profits for 2023 as long as the company sees a net income gain.

Newmont, the world’s largest gold producer, declared force majeure in June on the mine deliveries. It said in September the dispute was costing it nearly $1 million a day in maintenance costs and $2.7 million per day in lost revenue.

The mine, located in the central-north state of Zacatecas, is a major supplier of gold and silver and also produces zinc and lead. 

The four-month strike was the third labour dispute at Peñasquito since Newmont acquired it through its merger with Goldcorp Inc. in 2019. 

Newmont shares rose more than 1% to $50.39 apiece on Friday morning in Toronto, valuing the company at $40.1 billion. Its shares traded in a 52-week range of $47.93 and $76.08.