More Zn supply woesGrupo Mexico Declares Force Majeure On Zinc Deliveries
Monday April 17, 8:10 PM EDT
MEXICO CITY -(Dow Jones)- Mexican mining company Grupo Mexico SA (GMEXICO.MX) has declared force majeure on future deliveries of refined zinc as a strike continued at its mine in Zacatecas, a company official said Monday.
Juan Rebolledo, Grupo Mexico vice president for international affairs, said the company has warned customers of the possibility it will be unable to meet orders in May for refined zinc.
An accident early this year at the company's zinc refinery in San Luis Potosi had curtailed output of refined zinc, although Grupo Mexico has been able to sell concentrates and have some concentrates refined by third parties.
The refinery is expected to be back at 50% capacity by late May or June, and 100% by August, Rebolledo added.
Last week, Grupo Mexico began sending out notices that it may also be unable to fill some copper orders in May as a strike begun March 24 at La Caridad mine in northwestern Sonora state continued.
The strikes, over a dispute for leadership of the National Mining and Metals Workers Union, have been declared illegal by labor authorities.
The company has sought the intervention of local authorities to restore access to its facilities, which are being picketed by strikers.
Grupo Mexico's shares have been unaffected, largely because world copper prices are at record high levels. The company's B shares trading on the Mexico stock market rose 4.7% Monday to 35.60 pesos ($3.22).
The miners union is at odds with the Labor Ministry, which says dissident Elias Morales is the recognized union leader, and last month rejected a union notification ratifying Napoleon Gomez Urrutia as the leader.
The government is investigating Gomez Urrutia for the alleged misappropriation of $55 million paid last year by Grupo Mexico into a trust for distribution to workers