Compania de Minas Buenaventura SAA (NYSE:BVN) Navigates Through Labour Unrest


Dallas, Texas 12/26/2013 (FINANCIALSTRENDS) – Compania de Minas Buenaventura SAA (BVN) Navigates Through Labour Unrest

Compania de Minas Buenaventura SAA (NYSE:BVN) is one of the largest publicly traded gold mining firms in Peru. It has accrued a market cap of $2.8 billion and has been turned in net income of $325 million in the past 12 months.  In the same period the sales have dropped to $1.41 billion which represents a 16 percent drop on a year on year basis. In the past six to eight months, the gold mining firm has been facing trouble from its workers union.

Labour Unrest Hampering Operations

The most recent flare up occurred on December 5, when Compania de Minas Buenaventura SAA (NYSE:BVN) announced that the workers union under the aegis’s of “Uchucchacua’s worker and contractor unions” had declared a complete strike and tools down starting December 4 this year. The mining firm disclosed that the strike call was given by the union as a pressuring and arm twisting tactic to force the management to reinstate union members who had been dismissed by the mining firm citing misconduct which was contrary to their labour laws.

Company Defends Itself

In its defence, Compania de Minas Buenaventura SAA (NYSE:BVN) has countered that while it is fully appreciative and supportive of all legal rights of the union and its workers as prescribed by law, it was not willing to over look wanton disregard and breaking of strict laws which govern mining operations and its workers conduct on the mine.


Ball In Government Court

Analysts had expected that this log jam between Compania de Minas Buenaventura SAA (NYSE:BVN) and its labour force would be resolved only under the direct involvement of the Peruvian Ministry of Labour. So it did transpire that thanks to the pressure put on the striking union by the Peruvian government, the strike was withdrawn on December 7. This change of heart on part of the union came about post the Peruvian Ministry of Labour move to declare the strike illegal. Compania de Minas Buenaventura SAA (NYSE:BVN) in a terse press statement on December 9 announced that Uchucchacua’s workers’ and contractors’ unions had voluntarily withdrawn the strike on December 7.

Stock Performance

Compania de Minas Buenaventura SAA (NYSE:BVN) has been under pressure to perform at the markets all through the year. It has been range bound between $10.54 and $36.13 over the past 12 months.  It has lost 68 percent of its market value during trading in the past 12 months. It is currently trading just 4.55 percent above its past 52 week low price and has attempted to keep its investors from ditching them by paying out dividend yield of 0.18 percent in the past one year.

Company Operations

Compania de Minas Buenaventura SAA (NYSE:BVN) is a Chile based $3.03 billion market capped firm which has operations across Chile. It operates ten major mining properties in the country which has in turn yielded gold and silver. Of these seven production mines are “Uchucchacua, Orcopampa, Poracota, Julcani, Recuperada, Antapite and Ishihuinca” are directly owned by the firm. The indirectly operated mines are Shila-Paula, La Zanja and Colquijirca. In the recent past, the company has also through its wholly owned subsidiaries has ventured into generation and transmission of electric power and has also entered into the chemical processing sector.

This report is for information purposes only, and is neither a solicitation or recommendation to buy nor an offer to sell securities. Financials Trend is not-a-registered-investment-advisor. Financials Trend is not a broker-dealer. Information, opinions and analysis contained herein are based on sources believed to be reliable, but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. The opinions contained herein reflect our current judgment and are subject to change without notice. Financials Trend accepts no liability for any losses arising from an investor's reliance on the use of this material. Financials Trend sometimes gets compensated up to one hundred and fifty thousand dollars per month for featuring particular stocks. See site disclaimer for complete compensation. Financials Trend and its affiliates or officers currently hold no shares of these stocks. Financials Trend and its affiliates or officers will purchase and sell shares of common stock of these stocks, in the open market at any time without notice. Financials Trend will not update its purchases and sales of these stocks in any future postings on Financials Trend's websites. Certain information included herein is forward-looking within the context of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements concerning manufacturing, marketing, growth, and expansion. The words "may", "would," "will," "expect," "estimate," "anticipate," "believe," "intend," " project," and similar expressions and variations thereof are intended to identify for ward-looking statements. Such forward- looking information involves important risks and uncertainties that could affect actual results and cause them to differ materially from expectations expressed herein. *Financials Trend does not set price targets on securities. Never invest into a stock discussed on this web site or in this email alert unless you can afford to lose your entire investment.