Shares in Capstone Copper Corp (ASX: CSC) were sharply lower on Friday morning despite good news out of its Mantoverde mine in Chile, where a strike has come to an end.
The company said last month that the strike, involving members of Union #2, which started on January 2, had halted some production processes.
At the time, in late January, the company confirmed that striking workers were blocking access to the desalination plant, which had a knock-on effect on other operations.
As the company said at the time:
During the evening of January 18, individuals entered the desalination plant facilities, located 40 kilometres from the Mantoverde mine, while workers were inside performing regular duties. Subsequently, interference with the desalination plant’s electrical system resulted in the interruption of water supply to Mantoverde. Striking union members are preventing access and the restart of facility operations at the desalination plant. At Mantoverde, on-site water reserves continue to be used for essential services. Sulphide operations are temporarily halted while oxide operations are expected to continue until tomorrow, at which point they will be temporarily halted unless water supply is restored.
New agreement inked
Capstone said on Friday morning that the strike had now come to an end, with a new three-year collective bargaining agreement struck with the union.
The company added:
Following an agreement with Union #2, Mantoverde has now successfully negotiated new three-year collective bargaining agreements with all four unions and will continue its focus on safe and responsible mining which brings great benefits to the workforce and surrounding communities. Capstone’s priority is to safely and efficiently return to full operations at Mantoverde, which operated at approximately 55% of normal production levels during the strike.
Capstone owns 70% of the Mantoverde operations, with Mitsubishi Materials Corporation owning the rest.
The company has said in previous press releases that Union #2 represents about 22% of the total workforce at Mantoverde.
Capstone shares were 4.5% lower at $15.32 on Friday morning, most likely reflecting weakness in the copper price overnight rather than the impact of the end of the strike.
Other major miners were also weaker on Friday, with BHP Group Ltd (ASX: BHP) down 2.6% at $49.03 and South32 Ltd (ASX: S32) down 4% at $4.41.
Rio Tinto Ltd (ASX: RIO) shares were 0.1% lower at $156.91, while junior copper producer Hillgrove Resources Ltd (ASX: HGO) was trading 7.7% lower at 4.8 cents.
Capstone was valued at $15.1 billion at the close of trade on Thursday.
The post Capstone Copper shares in a slump despite good news out of Chile appeared first on The Motley Fool Australia.
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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.