Strike at Newmont’s Peñaquito mine ends with 8% pay raise

Workers at Peñaquito, 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 a 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 pesos ($8.3 million) bonus given by Newmont.

The union had also demanded a larger share of the mine’s profit, from the 10% agreed on in 2022 to 20%. 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 a day in lost revenue.

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

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