UPDATE 4-Excellon suspends work at Mexico mine due to protests

Wed Jul 11, 2012 5:02pm EDT

* Operations at La Platosa halted since Monday

* Company expects protest to end in the next 24-48 hours

* Miners say conflict could drag on for longer

By David Alire Garcia

MEXICO CITY, July 11 (Reuters) - Canada's Excellon Resources Inc halted operations at its La Platosa silver mine in Mexico due to a continuing protest by landowners and union members, the company said on Wednesday.

Protesters have blocked access to the mine in the northern state of Durango since Monday, following a contested vote on union representation last week.

The national miners union says Excellon is trying to impose another more company-friendly union on the workers, a claim the Toronto-based miner denies. Excellon has also struggled in the past with local landowners who want a new water treatment plant and other concessions.

Union members and the land holders have joined forces to block the entrance to the mine, which produced 1.3 million ounces of silver in 2011.

Excellon, which also owns the Miguel Auza mill in Zacatecas state, said the action is illegal and filed criminal charges against all groups participating in the protest.

The company expects the dispute to be resolved within the next 24 to 48 hours.

The miners union, however, said the conflict could drag on if there is no resolution to both the labor and land disputes.

"It will stay closed until the company gives into the demands," said Jorge Mora, head of the local union section, adding the blockade could last for months or even years.

Mora said the company must agree not to interfere in union elections. The national miners union, which has connections with the United Steelworkers union, lost the representation vote to another union and says the process was riddled with irregularities. The union's lawyers plan to file legal appeals to Excellon's criminal complaints.

The company declined to quantify how much production has been lost due to the stoppage and says a quick resolution would have little impact on overall output.

"We can easily make up for it overtime," Excellon's vice president for investor relations Joanne Jobin said. "It could have absolutely no impact whatsoever if this action is stopped by the government."

Officials with the state of Durango did not responded to requests for comment.

The national miners union has clashed with major mining companies in the past even as its leader, Napoleon Gomez, is living in Canada to avoid arrest on corruption charges in Mexico, which he says are fabricated.

Gomez led a three-year-long strike at Mexico's largest copper mine owned by Grupo Mexico but the company took back control of the pit in 2010 - with the help of federal police - after winning a drawn out court battle.

Many miners have left the union to join other labor organizations.

This is not the first time that struggles with workers at La Platosa mine have led to work stoppages and clashes between rival unions.

In 2011, the simmering conflict led to seven days of lost output and a review by Canada's mining watchdog.

While operations at La Platosa are halted, Excellon says it will continue to process stockpiled ore at its Miguel Auza mill, some 200 kilometers (124 miles) south of the mine.

Excellon shares, which have gained about 15 percent this year, slid 7.8 percent from Tuesday's close to 59 Canadian cents on Wednesday on the Toronto Stock Exchange.

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