Canadian Mining and the Costs to Workers: Notes on the El Cubo/Local 142 Strike, 2010-2011

Jamie Kneen Communications and Outreach Coordinator responsible for: strategic research, social media, and public engagement; our Africa program, environmental assessment, and uranium mining.

By Elizabeth Ferry

From mid-2010 until early 2011, the workers of Local 142 of the National Union of Miners, Metalworkers and Related Industries of Mexico went on strike against the Canadian company Gammon Gold (now called AuRico Gold), which owns the El Cubo mine, near the city of Guanajuato in central Mexico. While the strike has now been resolved and most of the workers are back at work, the strike raised important issues about labour relations between Canadian mining companies and workers and surrounding communities.

The strike began in June 2010, in response to Gammon Gold's announcement that for the eighth year running the company had not earned a profit and would therefore not pay the 10% of shares on profits as stipulated in Mexican labour law.  An additional motive for the strike was the company’s insistence on two 10-hour shifts per day, instead of three 8-hour shifts stated in the collective bargaining agreement and by law. The strike followed an earlier strike in 2009 that lasted for 48 days. The company blamed the 2009 strike and absenteeism among unionized workers as partially responsible for the supposed lack of profits.

Shortly after the June 2010 strike began, the company fired the 397 unionized workers, but the strikers established guards at the mine to protect equipment and to prevent contract workers from entering. The Junta de Conciliación y Arbitraje (Labour Relations Board) declared the strike “legally non-existent.” Despite this, the union received an injunction halting the Labour Board’s decision and stating Gammon Gold could not legally fire the striking workers.

On February 25, 2011, after nearly nine months on strike, the company and the union reached an agreement. From the point of view of the workers, the strike’s success was mixed. The company paid 100% percent of salaries for the time on strike as well as 90 days extra pay, and then rehired the remaining workers. The miners, however, returned to ten-hour shifts and without guarantee of future profit sharing.

Nor did the company emerge unscathed, at least from a public relations perspective.  In May, Gammon Gold changed its name to AuRico Gold, possibly in an attempt to avoid the negative associations of the strike. The company chose a name that drew on both the chemical sign for gold (Au) and the Spanish word for “rich.” AuRico lost 8 months of production during a mining bonanza, but as of July 2011, production was returning to normal.

The city of Guanajuato, where El Cubo is located, differs from some other mining districts in Mexico where mining companies face substantial resistance to their presence and operations.  Guanajuato was founded on mining, and the city's mining operations have lived through Spanish, English, US and now Canadian foreign corporate ownership, as well as periods of national ownership in the late 19th and again in the late 20th centuries. It is difficult to find people in the city who would identify as “anti-mining” or who wish for mining companies to pick up and leave. But that does not mean that workers, their families and other citizens don’t want to be treated and paid fairly and to have safe working conditions, healthy communities and opportunities for their families. The city has a strong tradition of labour activism of which this strike is only the most recent example. In national debates over the 1917 constitution, Guanajuato’s miners were held up as examples as workers fighting for fair wages and labour rights.

Many miners and observers in Guanajuato see Canadian companies as more exploitative and their jobs as more unsafe and unfairly remunerated than in the previous thirty years, when Mexican companies and a cooperative largely ran the district's mines. According to the union, during the last great bonanza of 1981-82, the miners reaped benefits along with the mine-owners. The El Cubo Mining Company, owned by the local Villagómez family, provided loans, profit sharing and in-kind contributions such as reforestation and construction materials for schools and churches. These days, the pie is sliced differently.  AuRico does not give financing or in-kind contributions to El Cubo or surrounding communities (though it did help to sponsor a community day in the nearby village of Calderones in August according to Rochelle Cashdan, an anthropologist and journalist residing in Guanajuato. Also, according to union secretary Benjamin Jaramillo, “very few of the children of the miners are able to go to school” past 5th grade.  In February 2011, just before the end of the strike, the newspaper Milenio reported Senator Francisco Arroyo Vieyra as saying “to end the labor conflict, the Secretary of Labor should return the concession to the Villagómez family, since when they had the company, there was never any conflict with local 142,” (“Que regresen El Cubo a los Villagómez: Arroyo,” February 8, 2011).

Safety conditions have also deteriorated. In 2004, the Canadian company MexGold  Resources acquired the El Cubo mine and Las Torres plant from the Villagómez family, which then merged with Gammon Lake Resources in 2006, forming Gammon Gold.  Since 2005, there have been at least 8 deaths in the mine and plant (and at least 15 in the district as a whole). The union reports that several of these deaths have occurred in the second 10-hour shift and at the end of week, indicating worker fatigue as a contributing factor.  In January 2010, after yet another death at El Cubo, the Secretary of Labour shut down the mine for a week, reviewed conditions and ordered compulsory health and safety training. Based on my observations in the late 1990s and on recent newspaper accounts (“Oro teñido de sangre,” El Correo de Guanajuato, 7 December 2009; “Pierde la vida otro minero en el Cubo,” 29 December, 2009), these numbers compare poorly with any comparable period in the past twenty years.

The resolution of the El Cubo strike, while it did gain some temporary payments for Local 142 members, also showed the challenges and risks that unions face in negotiating with foreign corporations in Mexico, especially when the government strives to uphold an image of the country as “favourable to mining” at all costs.

Elizabeth Ferry is an anthropologist who teaches at Brandeis University in Waltham, Massachusetts, USA. She has been studying mining in Guanajuato, Mexico since 1994. Her book, Not Ours Alone: Patrimony, Value and Collectivity in Contemporary Mexico (Columbia University Press, 2005), tells the story of the Sociedad Cooperativa Minero-Metalúrgica Santa Fe de Guanajuato, which operated some of the city’s most famous and productive silver mines from 1939 to 2005, when it sold out to Great Panther Silver, Ltd. Her current research focuses on the effects in Guanajuato of the shift from Mexican to Canadian ownership and the rise in metals prices.