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Little progress in talks to end blockade at Newmont's Peñasquito gold mine

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Little progress in talks to end blockade at Newmont's Peñasquito gold mine

Negotiated attempts to end a blockade of Newmont Goldcorp Corp.'s Peñasquito gold mine in Mexico, now in its third week, appear to have made little progress even after a recent appeal for fresh discussions by Mexico's President Andrés Manuel López Obrador.

"We are asking everyone to help so there is an agreement," Obrador said in a Sept. 30 televised address. Obrador also noted Peñasquito workers appear to be among the better paid mine workers in Mexico and that demands by blockade leaders must be fair. Closing the mine was not an option, he said.

The blockade, one of several to hit Peñasquito in the past few years, began Sept. 14 and pits truck drivers and some local community members against Newmont, which acquired the mine through its recent acquisition of Goldcorp. Newmont suspended mine operations after the blockade began.

Newmont said it will not negotiate until the blockade ends, taking the position that it already agreed to many of the demands from blockade leaders, including investment in water and social infrastructure. In the wake of Obrador's comments, Newmont's strategy appears unchanged.

"We have indicated our readiness to resume negotiations as soon as the most recent blockade is lifted," Newmont spokesperson Omar Jabara said in an email.

Jabara reiterated that Newmont met demands made by truck drivers and other protesters after a blockade earlier this year.

"We had already agreed upon all water and social investments under negotiation — unfortunately, a small group of individuals continues its illegal blockade in an effort to secure millions of dollars in personal financial gain from the mine," Jabara said.

Newmont has called the blockade illegal as a violation of Mexico's mining laws and said in a Sept. 25 news release that it filed criminal complaints against some blockade protesters.

"We regret that these individuals abandoned the Ministry of the Interior dialogue table," Brian Berney, general manager of subsidiary Newmont Goldcorp Peñasquito, said in the Sept. 25 statement.

Peñasquito produced 272,000 ounces of gold in 2018.

Amid the blockade, officials with both regional and the federal government have sought to mediate a resolution. Newmont offered US$25 million in investments and land rental fees, according to reports, but the proposal did not satisfy blockade leaders.

One leader of the blockade told S&P Global Market Intelligence that Newmont's offer was insufficient.

Felipe Pinedo, a representative of a Zacatecas-based political organization, who has been involved in several blockades, raised concerns about open pit mining and its impact on the environment.

"We think the president is misinformed," Pinedo said Oct. 3. "Yes jobs are important. But people's lives are the most important. Water is the most important."

Francisco Quiroga, undersecretary of mines with the Ministry of Economy who has been involved in talks, remained optimistic negotiations would produce a lasting solution to blockades plaguing Peñasquito in recent years.

In an interview with Market Intelligence, Quiroga echoed Obrador's comments, saying protest leaders must not leverage demands for financial gain. "We do not want to end up with a transactional solution a short term solution but rather a long term one," the undersecretary said.

Quiroga said the blockade must respect the rule of law, but dismissed the use of force to clear protesters as an ineffective option. Dialogue, Quiroga said, was the solution, "Because if the blockade is solved by force, they can be back tomorrow."