Mexican army brought in to guard Excellon’s La Platosa mine

About 300 Mexican army troops, federal and state police have surrounded and blocked the entrances to Excellon Resources‘ (EXN-T, EXLLF-Q) La Platosa underground silver-lead-zinc mine in Durango State, according to reports by the United Steelworkers and the National Union of Mine, Metal, Steel and Allied Workers of the Mexican Republic, otherwise known as Los Mineros.

Ben Davis, a spokesperson for the United Steelworkers, told The Northern Miner that about 130 workers at La Platosa who are part of the Los Mineros union showed up to work recently to find the gates barred and Mexican army troops guarding the mine site. The United Steelworkers and Los Mineros are largely separate unions that have an agreement in place to support one another when required.

Davis said this is the second major problem at the mine in as many months, after workers at La Platosa held a four-day strike in mid-August to demand recognition of Los Mineros as their official union. The strike ended after Excellon and the union signed a tentative agreement, with state government representatives as witnesses, which lifted the strike in exchange for the company’s agreement to recognize Los Mineros as the workers’ representative and to negotiate a new work contract. The agreement may have been contingent on government approval.

Excellon Resources did not immediately respond to The Northern Miner‘s request for comment, but released a public statement late on Sept. 30 that said an “illegal demonstration” had temporarily halted production on Sept. 28. Excellon noted its legal team and management had successfully resolved the matter with the assistance of Durango State government authorities, and that full production is expected to resume on Oct. 1.

Davis said Excellon appears to have brought some 15 members of a small company-supported union into the mine site on Sept. 29 and blocked the members of Los Mineros from coming in. “It certainly looks to me like they [Excellon] tried to reneg on it [the deal] and now they’re saying they’re going to try and talk again. I got a report a little while ago that they seemed to have reached an agreement for these guys from the company union to come out… so they may be going back to work now. I’m not entirely clear on whether or not they’re actually producing today or not, but it looks like they’re going to sit down and talk.”

According to a report from Los Mineros, Federal Labor Secretary Javier Lozano Alarcon is to blame for the supposed change in Excellon’s position. “We had a good faith agreement with the company, but they appear to have caved in to pressure from the Federal government,” Napoleon Gomez Urrutia, Los Mineros’ general secretary, said.  “We just want the soldiers and the non-union people to be withdrawn so our members can go back to work.”

Earlier this year, an affiliate union of Los Mineros accused Excellon of threatening and harassing workers at La Platosa who wanted to join the union. It claimed the general manager of La Platosa pressured 65 workers to sign a document stating their disinterest in unionizing, and offered increases in wages and benefits if they would sign. This could neither be confirmed nor denied by Excellon at presstime.

The problems at Excellon’s La Platosa mine come amidst much wider issues between Mexican labour unions and various levels of government in the country.

Excellon produced around 1.3 million oz. silver, 5.7 million lbs. lead and 8 million lbs. zinc from the high-grade La Platosa mine in 2010. Cash operating costs for the year after byproduct credits were US$7.18 per oz. silver. The mine produces about 150 to 200 tonnes of ore per day, which after crushing is sent to a wholly owned mill 200 km away. The company recorded a loss for 2010 of $3.9 million, including exploration expenditures of $9 million. Income from mine operations was $11.5 million.

Shares of Excellon closed up 2¢ to 67¢ following news that production will resume shortly. The company has a 52-week share price range of 55¢-$1.39.