October 13, 2015 / 7:15 PM / 4 years ago

UPDATE 1-Penoles suspends operations at Naica mine in northern Mexico

(Adds details on closure of mine, background on market conditions)

MEXICO CITY, Oct 13 (Reuters) - Mexican mining company Penoles said on Tuesday it had suspended operations at its lead, zinc and silver-producing Naica mine in the north of the country, delivering another jolt to metal markets following recently announced output cuts elsewhere.

Output at Naica, which Penoles called Mexico’s second-richest lead mine, had been halted “for an undefined period” due to force majeure after serious flooding, the company said.

Penoles had already suspended production at the mine in the state of Chihuahua in January because of flooding.

Naica in 2014 produced 19,694 tons of lead, 15,399 tons of zinc and 1.9 million ounces of silver representing 25 percent, 6 percent and 3 percent respectively of consolidated mining output during that period, Penoles said in a statement.

Still, the company said it did not foresee any “significant impact” resulting from the move.

The suspension is the latest in a series of recently unveiled production cuts that have bolstered prices on the London Metal Exchange. Glencore announced late last week it would suspend 500,000 tons of annual zinc output, triggering a 12-percent rally on Friday, the biggest ever one-day gain.

While Naica represents a much smaller loss, the move illustrates the deepening pain for producers as they battle weak prices.

Penoles said it had reached the decision after nine months of trying to clear enough water from the mine to reopen it, and that it was now in talks with the local miners’ union to put an end to the collective work contract at the site.

The Naica move follows a series of other big mine closures earlier this year including MMG’s huge Century zinc mine in Australia, and Ireland’s Lisheen, owned by India’s Vedanta. (Reporting by Veronica Gomez and Josephine Meson; Editing by Christian Plumb)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below