Endeavour Mining Resumes Operations Following Strike At Major Gold Mine

Zinger Key Points
  • Endeavour secured the resumption of operations at its vital asset in Burkina Faso.
  • The company is avoiding collective dismissal to prevent further production declines.

Endeavour Mining PLC EDVMF  has resumed operations at its Hounde gold mine in Burkina Faso after an 11-day strike was resolved through an agreement between management and workers.

The strike, which began on Jan. 21, temporarily halted operations at a key company asset. According to an internal memo sent to employees on Feb. 1, the work stoppage has had "significant financial impacts" on the company, per Bloomberg's report.

The court in Burkina Faso issued an interim ruling on Tuesday, ordering the immediate end of the strike and the expulsion of protesters from the Hounde project. The memo specified that failure to comply with the court’s directive would result in fines.

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Yet, avoiding collective dismissal signals a commitment to constructive dialogue between the company and its workforce. With the mine's production already anticipated to decline by 7% to 290,000 ounces in 2024, the management is avoiding further downtimes.

Burkina Faso, the world's 14th-largest gold producer in 2022, is struggling with political instability due to military coups and escalating violent events that displaced around 10% of the population.

The postponement of a transition to a civilian government doesn't help in keeping the delicate balance between economic interests and maintaining a secure environment for mining operations.  Additionally, in October, the government increased mining royalty rates, further raising operation costs in this troubled region.

Although Endeavour partially divested from Burkina Faso, selling 90% stakes in its Boungou and Wahgnion mines to Lilium Mining (a subsidiary of Lilim Capital) – the Hounde operation remains its key asset as it accounted for almost 30% of the total gold production in 2023.

In addition to external issues, the company also faces multiple legal investigations after firing its CEO for misconduct and irregularities linked to an asset sale earlier this year. Following these developments, the stock closed approximately 19% lower in January.

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Photo: Shutterstock

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