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Issue #583 | Forest Products

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2014 Media Kit
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Colombia Cerrejon coal stocks near-depleted by port protest

By: | at 11:47 AM | Channel(s): Breakbulk & Projects  Ports & Terminals  

Joint venture Cerrejon, Colombia’s biggest coal miner, says it could run out of stocks at its port in one or two days and default on export commitments, as third-party workers blocked its private railway for the sixth day on Wednesday.

Colombia is the world’s fourth-biggest exporter of coal and ships the fuel mainly to Europe for power generation. A halt in Cerrejon’s exports would slash the Andean nation’s coal shipments by about a third and could raise European coal prices.

“There is more or less two days worth of coal at the port to load and we have supplies to keep the mine running for about the same time,” said Cerrejon’s Vice President of Public Affairs, Juan Carlos Restrepo.

“We’re looking, together with our lawyers, at the possibility of declaring force majeure given the inability to adhere to our trading commitments, if the situation persists,” he said.

Restrepo said security guards employed by contractor Sepecol were blocking the company’s 150-km (93-mile) railway line about 34 km (21 miles) from the mine to protest likely job losses after the company’s contract, which expires on June 30, was not renewed.

Sepecol workers have been blocking the line since last Friday, Restrepo said, and have refused talks which the company has been trying to establish since before the protest began. Cerrejon has asked the government to try to facilitate dialogue.

Reuters could not immediately obtain comment from the protesters.

Sepecol provides around 1,000 security staff to Cerrejon, which has one of the world’s largest open-pit coal mines in the far north of Colombia. New contracts with two other security companies chosen through a recent bidding process, would likely cut the number of guards to 600 or 700.

Colombia’s coal sector has faced repeated disruption since late 2012 between a run of logistics problems and strikes by coal miners, but international steam coal prices remain comparatively low with the market still fairly well supplied.