Bloomberg News

Colombia Coal Miners ‘Far Apart’ in Talks With Cerrejon

February 08, 2013

BHP Billiton Ltd.’s Colombian coal mine and striking workers are “very far” apart in wage negotiations, said the head of the country’s coalminers’ union. Coal rose to a four-week high.

Workers, who walked off the job at the Cerrejon mine yesterday to push for an 8.5 percent pay rise and improved health-care benefits, are open to government-brokered talks, saidIgor Diaz, president of the National Coal Industry Workers Union, known as Sintracarbon. BHP owns the mine in partnership with Xstrata Plc and Anglo American Plc.

The strike came a day after Colombia, South America’s largest supplier of coal, suspended producer Drummond Co.’s loading license following a spill. Cerrejon and Drummond together accounted for 80 percent of Colombia’s annual coal exports of about 75 million metric tons in 2011, according to the World Coal Association.

Cerrejon, the world’s largest open-pit coal mine for export, produced 34.6 million tons last year, while Drummond’s Colombian unit produced 25 million tons, according to the companies’ websites. Cerrejon offered its 5,600 workers a 5 percent increase, according to the union.

“Cerrejon is still very far from the workers’ perspectives,” Diaz said in a telephone interview from Riohacha, near the mine.

Government Mediation

President Juan Manuel Santos said he ordered the Labor Ministry to mediate in labor talks at the mine. The union will accept government participation ’’as long as they don’t side with the company,’’ Diaz said.

“The country loses a great deal because every day that passes, it ceases to receive royalties,” Santos said today on his radio program Online with the President. “The ministry must do everything it can so this strike doesn’t continue.”

Cerrejon avoided a strike in 2011 after agreeing to a two- year wage accord that included a 6.5 percent wage increase.

Juan Carlos Restrepo, a spokesman for Cerrejon, didn’t immediately return telephone calls seeking comment.

The benchmark price for hard-coking coal in the first quarter is $165 a ton, down 2.9 percent from the fourth quarter and the lowest since 2010, according to data compiled by Bloomberg. Thermal coal for 2014 delivery to Amsterdam, Rotterdam or Antwerp rose 1.2 percent to $100.80 a ton today. Coal rose earlier to $101.10, the highest since Jan. 11.

To contact the reporters on this story: Alexander Emery in Lima at aemery1@bloomberg.net; Oscar Medina in Bogota at omedinacruz@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net


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