Community leaders from the district of Chilcaymarca in the southwestern Castilla province are threatening Peru’s Compañía de Minas Buenaventura (NYSE: BVN) with a general strike due to the company’s decision to fire 40 workers from its Orcopampa gold-silver operation.

The activists say the workers’ dismissal constitutes a breach of an agreement that Buenaventura and the community signed back in 2004. According to the deal, the company should prioritize people in Chilcaymarca when it comes to jobs as long as the mine is operative, given that it is located in the town’s area of influence and that the community gave the miner 1,000 hectares of terrain.

People in Chilcaymarca are asking the company to participate in a roundtable where the issue can be discussed and resolved.

However, Buenaventura told local media that it was forced to fire some workers because gold and silver reserves at Orcopampa have gone down and so has production. In fact, during the first quarter of 2019, the company reported an 85% YoY decrease in the mine’s gold output and a 96% decline in its silver output. Overall, the miner suffered a sharp 22.2% YoY plunge in gold production in Q1-2019.

Buenaventura also said that it is planning on keeping only essential personnel at Orcopampa, that it will dismiss external contractors, and that the focus for the rest of the year will be on an exploration campaign in the area.

Peru’s largest publicly-traded precious metals company started operating the underground Orcopampa mine back in 1967. Mine reserves in 2018 were estimated in 306,000 ounces of gold, while resources were estimated in 187,000 ounces of the yellow metal.

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