July 11, 2012 / 11:45 AM / in 5 years

Excellon suspends work at Mexico mine after protest

(Reuters) - Canada's Excellon Resources Inc (EXN.TO) said on Wednesday that operations were halted at its La Platosa silver mine in Mexico due to a continuing protest by landowners and union members.

The protest, which the company said was an "illegal action," has blocked access to the mine in Durango state since Monday and followed a vote last week on union representation at the mine.

Human rights groups and one of the unions involved say the vote was marred by intimidation and irregularities. Lawyers for Mexico's mineworkers union, which has connections with the United Steelworkers union, plan to file legal appeals.

The company has denied the allegations and says it remains committed to working with the union chosen by its employees.

Excellon shares, which have gained about 15 percent this year, slid 4.7 percent to 61 Canadian cents on Wednesday on the Toronto Stock Exchange.

The Toronto-based miner, which also owns the Miguel Auza mill in Zacatecas state, said it has filed criminal charges against all groups participating in the protest. It said it expects the action to end within the next 24 to 48 hours.

While operations at La Platosa are halted, Excellon continues to process stockpiled ore at its Miguel Auza mill, some 200 kilometers (124 miles) south of the mine. The company produced 1.3 million ounces of silver in 2011.

Excellon is caught up in a long-running battle with some of its workers at La Platosa over workplace safety, pay and benefits such as life insurance. The struggle has led to work stoppages and a clash between rival unions.

In 2011, the simmering conflict led to seven days of lost output and a review by Canada's mining watchdog.

Reporting by Julie Gordon in Toronto and Maneesha Tiwari in Bangalore; Editing by Maju Samuel and John Wallace

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