Capstone Copper (TSX: CS) reported yesterday that strike action at its Mantoverde mine in Chile has escalated, with damage to equipment now being reported on site.
The company reported that individuals entered the mines’ desalination plant facilities on January 18 while operations were ongoing and “interfered” with the desalination plant’s electrical system. The action resulted in the interruption of water supply to the mine, while striking union members are now preventing access to the desalination plant, blocking the restart of facility operations.
On-site water reserves are being used for essential services while sulphide operations are temporarily halted. Oxide operations meanwhile are expected to shut down today, and will remain shuttered until water supply is restored.
The events follow the mines Union #2 commencing strike action on January 2 after mediation between the company and union failed the day prior. The union represents 22% of the total workforce on site, and 50% of employees.
Despite the strike, Capstone was maintaining operations at 75% of normal levels initially, although those levels were expected to drop to between 50% and 75% by mid-month. With the desalination plant now down, production is expected to halt entirely until the strike is resolved or access to the plant is restored.
The Mantoverde operation in the fourth quarter produced 14,314 tonnes of copper from the sulphide operations and 9,506 tonnes from the oxide operation. For the year, total production from the mine totaled 95,115 tonnes of copper, representing 42.3% of Capstone’s production profile while serving as the company’s largest producing asset.
A timeline to strike resolution has not been provided by the company, although the company is seeking judicial support to regain access to facilities.
Capstone Copper last traded at $14.13 on the TSX.
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