Goldcorp restarts operations at Los Filos mine in Mexico following land settlement

6 May 2014 (Last Updated May 6th, 2014 18:30)

Canada-based gold producer Goldcorp has signed a five year land occupancy agreement with the land-owner group of Mexico, Carrizalillo Ejido (Ejido), and has resumed all operations at its Los Filos mine in Guerrero state.

Canada-based gold producer Goldcorp has signed a five year land occupancy agreement with the land-owner group of Mexico, Carrizalillo Ejido (Ejido), and has resumed all operations at its Los Filos mine in Guerrero state.

Ejido had suspended Goldcorp's Los Filos mine operations on 1 April when talks failed over the renewal of the company's land-use contract, which expired on 31 March.

Ejido submitted a proposal for Goldcorp to increase the rental price per hectare by 1.5oz in addition to the existing 2.5oz rate, and to add a productivity bonus of 1.8oz for each 100,000oz produced per year.

The land-owner group also reported increasing incidences of health and environmental problems due to mining activities at Los Filos mine and urged the company to take remedial action.

"The new agreement will create transport concessions and increase the land rate, employment opportunities and income for communities around Ejido."

Ejido's negotiating team consisted of individuals, organisations, mining workers and members of the Mexican Network of People Affected by Mining (REMA), and the Mesoamerican Movement against the Extractive Mining Model (M4), which claimed that Goldcorp had cancelled their proposal despite reaping huge profits from Ejido's lands.

The team alleged that: "We have given our lands and even our lives to your company, for which we deserve dignified and respectful treatment."

After 33 days of continuous negotiations Goldcorp decided to renew the occupancy agreement, which would allow Ejido to monitor and prevent environmental consequences and health contingencies associated with mining activities, and to improve the social, educational, economic and health benefits of its communities.

Additionally, the new agreement will create transport concessions and increase the land rate, employment opportunities and income for communities around Ejido.

The break from operations at the Los Filos mine is expected to reduce Goldcorp's estimated gold production for the year, which is between 330,000oz and 345,000oz.

The company has also reconfirmed its overall guidance of between 2.95m ounces and 3.10m ounces of gold for the year.

Los Filos mine in Guerrero State, Mexico, employs more than 2,600 people from the surrounding communities with an estimated 10,000 additional jobs created as a result of the mine's presence in the region.

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