Gold industry giant Goldcorp suspended operations at its Los Filos mine Wednesday after saying it was unable to negotiate the renewal of an occupancy agreement with the Carrizalillo Ejido, a local landowners group.
All work at the mine in Guerrero, Mexico, stopped the day before, when the landowners group announced an indefinite strike outside the mine until the company seriously addresses their concerns. In the statement, Carrizalillo Ejido demanded the closure of the mine according to Mexican law to reduce the environmental and health damages that have occurred, and to compensate for long-term costs they will have to bear after the company is gone.
The company, based in Vancouver, said certain activities related to environmental safeguards and site security will continue during the suspension. Goldcorp is the world's second-most valuable gold miner and one of the fastest-growing senior gold producers, with operations throughout the Americas.
The Los Filos operation consists of two open-pit mines - Los Filos and El Bermejal - and one underground mine. The open-pit began commerciall production in 2008.
Representatives of Ejido stressed concerns about water supplies contaminated with arsenic, water shortages, loss of agricultural land and premature births and malformations in newborns. Goldcorp's response that negotiations are tough due to the slump in the gold market may be what the company's investors want to hear, but it likely won't get them any closer to a new contract.
In any case, it's important for companies to eliminate risks for water contamination and other harmful side effects concerning the environment or human health by providing top-tier equipment safety. Crack detection can help diagnose leaks and fix them before they become a major problem. Other measures like equipment maintenance software and condition monitoring ensure that equipment is in top shape, further removing the possibility of damaging breaks that can lead to downtime and publicity problems.