Peruvian communities near Hudbay Minerals’ Constancia Mine on Monday began a 72-hour strike protesting the company’s refusal to negotiate over a host of economic, social and environmental issues.
The action comes on the same day that Hudbay’s stock closed at a record low $1.65 a share on the New York Stock Exchange.
Residents of communities in the district of Velille in the province of Chumbivilcas called the strike after Hudbay refused repeated requests for meetings, according to a press release issued by MiningWatch Canada. The strike comes 14 months after residents in nearby Uchucarco staged a protest march at Hudbay’s Constancia mine site. Protesters later seized and occupied the Constancia open pit site in Nov. 2014.
Velille Mayor, Sergio Valencia Salcedo, and the President of the Velille Defence Front, Guider Puma, have indicated that invitations and letters they sent to Hudbay and the government requesting dialogue have not received a response, the MiningWatch press release states.
“The people of Velille demand that HudBay Peru S.A.C. strictly comply with their social and environmental responsibilities, which should be clearly outlined in a contract with clear rules to guarantee mutual respect and governance in the district of Velille,” community leaders stated. “If these demands are not met, protests will intensify at the inter-provincial level.”
Social unrest in Peru reducing production from Hudbay’s largest mine will only compound the company’s rapidly deteriorating financial condition. Hudbay’s stock has plummeted 74 percent in the last six months as copper prices continue to sag pressured by waning Chinese demand for the red metal. Hudbay’s market capitalization has fallen to $388 million.
Falling copper prices, interest payments on $1.2 billion in debt and relatively high capital expenditures that are projected to absorb any excess cash generated at Constancia throughout 2016 are putting downward pressure on the stock.
Hudbay has previously stated (page 23) it intends to use free cash flow generated at the Constancia Mine to pay for construction of the proposed $1.5 billion Rosemont copper mine in the Santa Rita Mountains on the Coronado National Forest southeast of Tucson.
Hudbay’s financial crisis in the face of a worldwide copper surplus casts doubt on the company’s continued public statements that it intends to begin construction on Rosemont next year once the permitting process is completed.
Hudbay still faces significant permitting hurdles and likely legal challenges before it could begin construction of the mine on the northeast slope of the Santa Rita Mountains.
IT IS TIME FOR SHAREHOLDERS TO REVOLT AND TO TAKE HUDBAY TO TASK FOR FAILING TO RESPECT THEIR INVESTMENTS . MANAGEMENT IS TO BLAME FOR THE SOCIAL VIOLATIONS INFLICTED ON THE PERUVIAN PEOPLE AFFECTED BY THE OPERATIONS OF THE CONSTANCIA MINE . THIS IS MOST SHAMEFUL AND DISGRACEFUL . HUDBAY IS GIVING THE MINING INDUSTRY A BLACK EYE AT A TIME WHEN METAL MARKETS ARE IN SHARP DECLINE . THE CANADIAN GOVERNMENT IS BECOMING MORE AND MORE SENSITIZED TO THE ACTIVITIES OF CANADIAN MINING COMPANIES LIKE HUDBAY WHO ARE OPERATING OFFSHORE AND OUTSIDE THE REACH OF CANADIAN LAW . MINING WATCH IS MONITORING SUCH ACTIVITIES AND REPORTING SUCH . THEY ARE AN EFFECTIVE WATCH DOG AND DOING THEIR BEST BUT WITH LIMITED FINANCIAL MEANS .
HUDBAY NO LONGER HAS THE IN-HOUSE FUNDING TO PROCEED WITH THE DEVELOPMENT OF THE ROSEMONT PROPERTY . WITH ITS OUTSTANDING DEBT FROM CONSTANCIA GROWING DUE TO A VERY DEPRESSED COPPER PRICE , THE BEST THAT HUDBAY CAN DO AT THIS TIME IS TO TREAD WATER AND TAKE A DEEP BREATH . RAISING THE REQUIRED MONEY FROM COMMERCIAL SOURCES IN ORDER TO BRING THE ROSEMONT PROPERTY INTO PRODUCTION MAY NOT BE POSSIBLE . THIS WOULD LEAVE HUDBAY WITH FEW OPTIONS OTHER THAN TO FIND A JOINT VENTURE PARTNER OR SELL TO THE HIGHEST BIDDER , ASSUMING THAT ONE CAME FORWARD .
DELAYS IN THE PERMITTING FOR THE ROSEMONT PROPERTY ARE TO HUDBAY’S ADVANTAGE AS THEY SCRAMBLE TO MAINTAIN FINANCIAL LIQUIDITY OVERALL . THEY MAY NOT BE ABLE TO WAIT FOR THE PERMITTING PROCESS TO RUN ITS COURSE . THE MOOD AT A RECENT MINING INVESTORS CONFERENCE IN VANCOUVER , BC WAS ONE OF GLOOM AND DOOM FOR THOSE DEALING WITH COPPER INTERESTS . AUGUSTA WALKED AWAY FROM ROSEMONT WITH THEIR POCKETS FULL . HUDBAY MAY ALSO HAVE TO WALK AWAY FROM ROSEMONT BUT WITH THEIR POCKETS EMPTY .
This should be a lesson to all, especially those entities responsible for issuing permits.
Good Golly The “Blame” On This Hudbays Mess Is None Other Than The Obama Administration And “Global Change Laws”?? Watch When The Price Drops Again Obama/George Soros Will Do Just Like They Did With The “Coal Mines” Who Bought The Coal Mines For Pennies On The Dollar George Soros!! Just Follow The Money For One More Year!! Out Goes The Worst President In US History Barry Soetoro aka Barack Obama, With The Biggest Mess And Finally The US Gets A Real Man Donald J. Trump POTUS, Soon.