Summary
Southern Copper Corporation (SCCO) reported on June 9, 2006, that its Mexican subsidiary, Mexicana de Cobre, S.A. de C.V. (Mexcobre), has been compelled to cease operations at its La Caridad copper mine and the Agua Prieta lime plant in Sonora, Mexico. This drastic measure follows an ongoing strike and illegal blockade initiated by a group of workers on March 24, 2006, which has resulted in 78 days of restricted access, vandalism, and theft. Despite attempts to resolve the situation through official channels and assurances from the Mexican Federal Government, the lack of secure conditions forced the company's hand. SCCO anticipates that the dispute will not be resolved in the near term and has decided to suspend operations to prevent further financial losses and potential new conflicts. The company also stated its intention to terminate labor agreements in accordance with Mexican federal labor law.
Key Highlights
- 1Suspension of operations at the La Caridad copper mine and Agua Prieta lime plant due to a prolonged strike and illegal blockade.
- 2The strike and blockade by a group of workers commenced on March 24, 2006, and lasted for 78 days.
- 3The company cited continued vandalism and theft, along with lack of secure conditions, as reasons for the closure.
- 4Southern Copper Corporation does not expect a near-term resolution to the dispute.
- 5Operations are being suspended to avoid further financial losses and potential new conflicts.
- 6The company's subsidiary, Mexicana de Cananea, S.A. de C.V., declared force majeure on June and July delivery contracts from the Cananea copper mine.
- 7Southern Copper Corporation intends to terminate individual labor and collective bargaining agreements under Mexican federal labor law.