By Alex Létourneau
Of Kitco News
(Kitco News) -Canadian-based Excellon Resources Inc. (TSX: EXN) and the USW union along with their a Mexican-based non-governmental organization have been battling it out regarding Excellons wholly owned La Platosa mine in Durango, Mexico and it has been far from amicable.
The USW union sought to become the only union at the La Platosa mine, with the backing of Mexican NGO Proyecto de Derechos Económicos, Sociales y Culturales, A.C, known as ProDESC. The union failed to secure the votes necessary in a July 5 workers election, but now the spat between the union and the NGO is escalating in the media.
What followed was a near two-month blockade of La Platosa by the Ejido union, beginning July 8 and ending Sept. 10. The mine was briefly accessed by 30 to 40 state and federal officers Aug. 29 through an alternate access but was quickly blockaded again by 40 Ejido blockaders, the company said.
The blockade ended Sept. 10 when 80 members of the Concerned Women of Bermejillo, known as CWB, and members of the Sada union approached the blockaders and peacefully managed to reopen the mine. Excellon said it has had 100% access to the mine since.
La Platosa produced 1.3 million ounces of silver concentrate in 2011 and has produced 810,555 ounces of silver concentrate in the first half of 2012. La Platosa produces the highest-grade of silver in Mexico, according to their website.
On Oct. 4, ProDESC issued a press release on their website stating that protesters were blocking off the La Platosa mine for a second time in two weeks. The press release has since been removed from their website.
Some media outlets published a story based on the press release, but Excellon executive management said the NGOs press release was erroneous.
To say that there was a second blockade in two weeks is wrong, the first one was also a demonstration, said Joanne Jobin, vice president of investor relations at Excellon. There was no blockade whatsoever (on Oct. 4); we had 100% access to our mine.
A ProDESC representative clarified that it was not a blockade during an interview with Kitco News.
It was the community that has continued to maintain a demonstration camp outside the mine which is continual and right at the entrance of the mine on private property that is not property of Excellons, said ProDESC representative Christopher Benoit.
The second demonstration took place Oct. 4, but was far from a blockade, said Brendan Cahill, executive vice president of Excellon.
We got to the mine in the morning, the protesters were visited by AFL-CIO, a US umbrella labor organization, and in a demonstration of solidarity they claimed that they were not going to let any contractors or suppliers into the mine, Cahill said. We had no problem getting any of our workers in, the first shift was fine, the second shift was fine, theres just no truth to say that there was a second blockade within two weeks.
Benoit said that workers have been taking part in work stoppages.
My understanding is that the community has conducted several work stoppages at this point after the two-month work stoppage that had occurred between July and the end of August, Benoit said. Since then theyve been conducting six to eight hour work stoppages off and on over the last several weeks to get the company to sit down at the negotiation table.
Excellon maintains that they have addressed the issues brought up by ProDESC and the Ejido, among the issues being an increase to the current land package deal.
What is never raised is the fact that the Ejido, with the help of ProDESC, have demanded surface rent payments that would total about $1.5 million. We currently pay them almost $600,000 a year, Cahill said. Since 2008, weve paid them $2.7 million. Its one of the richest surface rights for exploration rental agreements in Mexico.
Other issues the Ejido have focus on environmental damage, trucking concessions and the workers cafeteria.
In a press release on ProDESCs website Oct. 9, the Ejido stated that Excellon is refusing to construct a water treatment plant and irresponsible water management has damaged native vegetation and animal habitats. The press release stated that the Ejido filed a complaint to Mexicos Federal Prosecutor of Environmental Protection.
Cahill defended Excellons environmental record, stating that the company has adhered to government protocol.
The water is discharged from the mine through a series of irrigation channels and settling ponds where any suspended solids are settled before discharging it back into the environment to the natural water table, Cahill said. The water is consistently confirmed and tested and it is of agricultural quality and is in accordance with the environmental guidelines.
Theres no issue there yet its continually raised, Cahill added.
Theyre required by law to have a water treatment plant to treat any water thats coming out of the mine, Benoit said. We understand that theyre pumping it out but theyre pumping it out with high mineral content thats affecting the agricultural viability of the land.
The water treatment plant is required by both mining and water laws to be implemented for the water that theyre expelling from the mine at this point which theyre expelling at a rate of about, at least before July, 9,000 gallons per minute, Benoit added.
Cahill also said that the Durango state is currently going through a drought and that Mexican federal governmental authority on water rights, CONAGUA is not handing out any permits in order to conserve the water table in the area.
Cahill believes that the acrimony from the unions began after the July 1 Mexican presidential elections which saw a change in leadership.
Felipe Caldéron and his Partido Accion Nacional lost his six-year position as president of Mexico to Enrique Peña Nietos Institutional Revolutionary Party. Peña Nieto will assume control as Mexicos acting president on Dec. 1.
This five-month lull between Caldérons stepping down and Peña Nietos stepping in is seen as a small open window for unions to try and muscle in on mines, according to Cahill.
I think everybody had a sense it was coming, theres always this lag before the new government takes over, said Cahill.
Excellon executive management said they followed the rules when it came to allowing the USW union the opportunity to become the mines major workers union by putting it to a vote. Roughly 60% of Excellon workers did not select the USW union to represent them.
From there, Excellon alleges that ProDESC is using the Ejido as a means to continue causing strife and unrest at La Platosa.
Excellon has been targeted in media releases by the USW Union as well with a Sept. 27 press release aimed at the companys shareholders. The press release began with just like poor landowners and miners in Mexico, Canadian shareholders deserve much better from mining company Excellon Resources.
Ken Neumann, USW National Director for Canada, said in the release that, we are communicating directly with Excellon shareholders to document a litany of management problems that have led to festering conflicts in Mexico and a depressed share price for shareholders. The release said Neumann sent a letter to major shareholders.
Weve spoken with absolutely every single level of Mexican government and they all know its an issue, they know the source of the issue, Cahill said. Mexico will hopefully be undergoing some positive changes in the next two to three months and when the new government gets into power, everyone expects things to improve significantly.
The union leaders know this is the last hurrah and theyve got a window thats closing quickly, Cahill added.
By Alex Létourneau of Kitco News [email protected]
