Mexico's Fresnillo Plc (FRES.L: Quote), the world's largest primary silver producer, expects no major economic impact after a strike at a precious metals refinery meant it would have to move processing of some of its metals elsewhere, the firm said on Monday.
The parent of London-listed Fresnillo, Penoles (PENOLES.MX: Quote), said on Friday it had declared force majeure at its MetMex refinery after a five-week strike over pay paralysed work. [ID:nN13458606]
As a result of the declaration of force majeure we will switch to alternative arrangements that we have begun to put in place with other smelters and refineries, Fresnillo said in a statement. The company does not expect a material adverse economic impact. Processing that is being transferred includes the dore and precipitates produced at the Herradura and Cienega mines as well as the lead concentrates from the Cienega and Fresnillo mines. Precipitates, dore and concentrates are partially processed products.
Zinc concentrates are continuing to be processed at MetMex since the zinc circuit is separate and not affected by the strike, Fresnillo said.
Some 300 striking workers in the gold and silver refinery section of the sprawling MetMex metals complex in northern Mexico laid down tools on Feb. 8, demanding a salary increase of up to 9 percent.
MetMex refines more than 90 percent of all the gold and silver mined in Mexico and produced around 580,000 kgs of silver, 54,000 kgs of gold and 460,000 tonnes of zinc in 2007, according to statistics on Penoles' website. (Reporting by Eric Onstad and Julie Crust; Editing by Jon Loades-Carter)
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