08/29/2012 06:45 EDT | Updated 08/30/2012 12:40 EDT

Excellon Mine Blockade Breached By Mexican Security Forces, Company Regains Access (UPDATED)


Following a seven-week-standoff with landowners in Durango State, Mexico, security forces have moved to disperse a blockade at a mine owned by Toronto-based Excellon Resources, a local human rights group reports.

According to the group ProDESC, a caravan of buses carrying about 100 Mexican soldiers and both federal and state police officers breached the blockade outside the silver mine on Wednesday morning.

UPDATE: Canadian mining firm Excellon Resources confirmed on Thursday that it has regained access to its La Platosa silver mine in Mexico following a seven-week blockade by local landowners.

But Toronto-based Excellon indicated it would put plans to resume production on hold “for an indefinite period” if demonstrators interfere with efforts of a local women's group to assist the company in resuming the flow of transportation in and out of the mine.

In a press release on Thursday, the company said that a group of women from the nearby town of Bermejillo, whose livelihoods have been affected by the blockade, have been escorting buses carrying workers in and out of the mine during shift changes since the blockade was breached.

Using an alternative access, the company said "a combined group of state and federal authorities peacefully reopened access” to the mine site on Wednesday morning.

The company credited the Concerned Women of Bermejillo for assisting the company's workforce in re-entering the mine through the access, which at the time was blocked by five demonstrators. The company said the women disrupted a “new illegal blockade" of about 40 demonstrators gathered at the alternate entrance on Wednesday afternoon.

“In the event that the illegal blockaders interfere with the escort provided by the Concerned Women of Bermejillo, the Company will be forced to put the mine on full care and maintenance for an indefinite period,” the company said.

The blockade had been in place since July 8, when negotiations broke down with a group of local landowners known as Ejido Sierrita, who accused the company of repeated breaches of contract. The company is also at odds with some of its 250 workers over alleged labour rights violations.

These groups have filed multiple complaints with Canadian regulators about Excellon’s activities at the mine, as The Huffington Post reported earlier this week.

Excellon maintains that the demonstrators are being manipulated by third-party interests, including unions and ProDESC, a local human rights organization.

The company did not indicate when it intends to resume regular production at La Platosa, which is its only revenue-generating source.

A trade hold on the company's stock, imposed on Wednesday before trading opened, was lifted on Thursday morning. On the Toronto Stock Exchange, Excellon shares opened at 37 cents on Thursday, up from 34.5 cents at Tuesday’s close.

ProDESC, which has been advocating on behalf of the landowners and workers in the mine for several years, did not immediately respond to a request for comment.

Speaking to HuffPost on Wednesday, Valeria Scorza, deputy director of ProDESC, raised concerns about the ongoing safety of demonstrators, who had chosen to remain at their encampment despite the significant security force presence reportedly assembled at the entrance of the mine.

From earlier:

Excellon vice-president Brendan Cahill declined to comment on the situation and would not confirm whether the blockade had been breached. But on Wednesday afternoon, the company issued a lengthy backgrounder on what it described as “the illegal action” at La Platosa.

“The company has the full support of the state and federal governments and is working closely with them to end this action as soon as possible so that the workers can return to the mine and resume their livelihoods,” the release stated.

A trading halt was imposed on the TSX-listed company’s stock before trading opened on Wednesday morning. The regulatory body typically puts such halts in place in anticipation of material news.

Cahill confirmed that the halt was imposed “pending news.” It was still in place at the time of publication.

Valeria Scorza, deputy director of ProDESC, said the blockade — comprised of about 70 community members — was broken without violence.

But in an interview with The Huffington Post, she raised concerns about the ongoing safety of demonstrators, who have chosen to remain at their encampment despite the significant security force presence now reportedly assembled at the entrance of the mine.

“They are scared. They’re really scared about their security, and the possibility of the use of force,” she said of the community members and workers.

The blockade had been in place since July 8, when negotiations broke down with a group of local landowners known as Ejido Sierrita, who accused the company of repeated breaches of contract.

The encampment halted production at the company’s only revenue generating source. After exhausting its stockpile, Excellon declared “force majeure” at La Platosa on Aug. 8, a contract clause that absolves a company of shipment obligations in the event of circumstances beyond its control, and filed criminal trespassing charges with local authorities.

As HuffPost reported earlier this week, various disputes at La Platosa have persisted over several years despite multiple complaints to Canadian regulators filed by the landowners and workers about Excellon’s alleged activities at the mine.

While the publicly traded Excellon has had an agreement with the Ejido to operate on their property since the mid-2000s, the landowners claim the company has not fulfilled many of its promises to the community, such as building a water treatment plant and offering preferential hiring.

Excellon is also at odds with some of the 250 workers in the mine, who cite health and safety issues and allege that management violated labour rights with a campaign of intimidation to thwart a recent union organizing drive. Some of those workers have thrown their support behind the Ejido.

According to Excellon, however, the demonstrators were being manipulated by union groups and ProDESC, which has been advocating on behalf on the landowners for several years.

"I understand the concern of our shareholders regarding what is effectively a confrontation between competing unions for control over the workforce at La Platosa,” CEO Peter Crossgrove said in a recent press release.

In a backgrounder released on Wednesday, Excellon said it had paid the Ejido “well in excess of US$2 million” since 2008, when the latest agreement was signed. Certain elements of that deal have yet to be put into place because they “were designed to be implemented over time upon the fulfillment of certain conditions that the Ejido were unable to satisfy at the time of signing,” the company said.

Last year, Canada’s Corporate Social Responsibility (CSR) Counsellor spent six months trying to mediate between the company and its workers, who alleged various labour rights abuses. But CSR Counsellor Marketa Evans suspended her efforts when the company pulled out of the process, which is voluntary.

Cahill told HuffPost that the company withdrew because it believed that Evans’ “position was very much swayed and influenced by the other parties.”

The CSR Counsellor was created in 2009, under the umbrella of Foreign Affairs and International Trade (DFAIT) to mediate disputes involving Canadian mining companies on a voluntary basis.

In May, the workers and the Ejido took their concerns to Canada's National Contact Point for the OECD Guidelines for Multinational Enterprises, an interdepartmental committee chaired by DFAIT that has the authority to carry out investigations and determine whether laws were broken.

Then, in mid-July, another complaint was filed with the Ontario Securities Commission. Acting on behalf of ProDESC, a group of volunteer lawyers and students at Osgoode Hall Law School’s Justice and Corporate Accountability Project alleged that Excellon violated securities regulations for failing to adequately disclose to its shareholders the significance of the conflict at the mine, and the effect of the blockade on its bottom line.

Excellon dismissed the charges filed with the OSC as “baseless,” maintaining in a press release that it “has met and continues to meet all of its disclosure obligations.”


Photo gallery Excellon Resources Mine Blockade: La Platosa, Mexico See Gallery