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Hochschild (HOC.L): On strike

Workers at the Peruvian operations of large silver miner Hochschild (HOC.L, quoted on the London Stock Exchange) went on strike last night. At present all four of the mines HOC.L operates in Peru (Ares, Arcata, Selene and Pallancata) are closed. It also has two other majority owned mines, San José in Argentina and Moris in Mexico. These are not affected by today’s industrial action. Here’s Reuters with its version.

The dispute is about the workers’ profit-sharing plan that operates at HOC.L and all other Peruvian mines. Acording to Peruvian law, all mining companies are obliged to share 8% of profits with their workforce. HOC workers are accusing the comapny of dragging its heels on this, however HOC says that workers cannot expect the same amount of profit this year as they received last year due to market circumstances. The truth probably lies somewhere in between, but that’s just personal speculation at this time.

On Wednesday HOC.L releases its year-end earnings and report, so at that time we’ll know more about the hard numbers involved. Right now HOC.L says that the dispute won’t affect production targets, which makes sense in the short-term but if the dispute goes on for more than a few days, that will change.

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