Strike Suspended at Barrick's Veladero Mine in Argentina

2017-05-29 15:45:49

By Danielle Bochove, Bloomberg News

Striking miners at Barrick Gold Corp.’s Veladero operation in Argentina will return to work as the two sides negotiate, alleviating the latest challenge facing the world’s largest gold producer.

The Toronto-based company has initiated “a formal dialogue process with the union leadership to address issues of concern,” it said Monday in a statement.

AOMA, one of nine unions at Veladero that’s focused on mine operations, downed tools on Sunday. Under local labor rules, striking employees are required to return to work once formal talks begin, Barrick said.

The labor dispute is the latest in a string of problems for Barrick at Veladero. In March, a pipe carrying cyanide solution to the leach pad ruptured, leading to a suspension of leaching activities on March 29. The third incident involving cyanide solution at Veladero in two years triggered threats from authorities to rescind its license and prompted company officials, including Executive Chairman John Thornton, to travel to Argentina to oversee the response.

The setbacks at Veladero threaten to undermine efforts to cast mining in a more positive light in other Argentine provinces where the use of cyanide and open-pit operations are banned or face community opposition. President Mauricio Macri’s government is working with the provinces to introduce a common set of rules to attract more investment.

In April, Barrick announced it was selling half of Veladero to China’s Shandong Gold Mining Co. for $960 million. Since then, Barrick’s quarterly earnings report have showed 2017 costs will be higher than previously expected at Veladero, while production will be lower. On May 16, Shandong scrapped plans for a share sale to fund Veladero’s purchase but said it still plans to go ahead with the deal.

Meanwhile, Barrick is in the midst of making improvements to the leach-pad area in order to resume full operations. That work was not been affected by the strike, and the company still expects to resume normal leaching activities in the second half of June, subject to regulatory and judicial approval, it said in the statement.

Barrick rose 0.1 percent to C$22.09 at 3:09 p.m. in Toronto. The shares have gained 2.8 percent this year.

LATEST STORIES

Industries & Politics

Trends