Fortuna Silver to resume production at San Jose mine after blockade

Mining operations had been suspended since the beginning of March, when workers walked out over a dispute relating to the firm’s profit sharing.

The San Jose gold and silver mine will resume production after strikers blockaded the project. Credit: Dominik Vanyi/Unsplash.

Fortuna Silver has announced that miners have lifted the blockade of the company’s San Jose project in Mexico, and work has resumed.

Union workers, comprising around 15% of the workforce, established the blockade in March this year, and the mine had been inaccessible since.

The initial dispute arose between unionised workers and Compañía Minera Cuzcatlán, Fortuna’s 100%-owned Mexican subsidiary, over the share of profit distribution to the workforce carried out by the company. The workers had demanded that the company share a greater portion of its profits with them.

In an initial statement on the blockade, Fortuna said: “Profit sharing is a transparent calculation and is payable in accordance with Mexican legislation. The blockaders demand the company increases profit sharing participation beyond what is stipulated by law.”

Following the resumption, Fortuna then stated that it had “reached an agreement” with the workers to resume operations.

“In material compliance”

The San Jose mine, located in Oaxaca, employs about 1,000 people. In 2022 it produced 5.8 million ounces of silver and 34,124 ounces of gold. Despite the month-long hiatus from production, Fortuna expects to meet a similar level of production in 2023.

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In March, a federal court granted Fortuna a permanent legal injunction allowing it to continue production at the San Jose mine for another 12 years. The mine was at risk of closure after the expiry of its environmental impact authorisation (EIA) permit.

The Mexican ministry for the environment gave Fortuna a 12-year extension in 2021, however that same body later claimed it was issued in error and that only a two-year extension was to be issued. After a court battle, Mexico’s federal court sided with Fortuna and granted an injunction allowing them to operate the project for the next 12 years.

Fortuna CEO Jorge A. Ganoza stated: “We are extremely encouraged by the court’s decision, which is consistent with our view that the 12-year EIA is in material compliance with all applicable laws. The injunction allows the San Jose Mine to continue to operate under the terms of the 12-year EIA until this matter is finally resolved.”