Capstone Copper (TSX: CS; ASX: CSC; US-OTC: CSFFF) resumed operations at its Mantoverde mine in Chile this weekend despite failing to resolve a month-old strike that will cap output.
Mantoverde should run at 50% to 75% of normal rates while the strike continues, Capstone said on Sunday. Union #2, which represents about 22% of the total workforce, walked out on Jan. 2. The Vancouver-based miner, which relies on the mine for 42% of its output, gained access to operate a desalination plant over the weekend, but the sides are still apart on some issues.
Mantoverde, 30% owned by Mitsubishi Materials, is one of Capstone’s core copper operations in Chile. It might produce 101,000 tonnes of copper this year, still within a company forecast of 97,000–112,000 tonnes, Canaccord Genuity mining analyst Dalton Baretto said in a note on Friday.
Capstone’s Toronto-listed shares gained about 5% in afternoon trades Monday to $15.84 after opening at $15.01. It has a market capitalization of $12 billion (US$8.8 billion).
Production impact
Capstone had warned in early January it would scale back activities during the strike and keep output at up to about one-third of normal.
The company has also said the dispute escalated after a Jan. 18 incident at the desalination plant, about 40 km from the mine, when individuals entered the facility and interfered with its electrical system, cutting water supply to the mine.
Capstone said it remains willing to engage in discussions to seek a resolution with Union #2.
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