* Strikes, rebel attacks have affected output
* Colombia is world's No. 4 coal exporter
By Carlos Vargas
CARTAGENA, Colombia, Oct 19 Colombia has lowered
its coal production target for this year by 4 percent due to a
nearly month-long strike at the country's main railway and low
prices for metallurgical coal, a senior mining official said.
The coal sector in Colombia, the world's fourth-largest
exporter of the material, has hit historic highs in both
investment and production in the last few years on better
security and fiscal terms.
But labor strife has forced the Andean nation to lower its
production goal to 93 million tonnes in 2012 from a previous
target of 97 million tonnes, said Henry Medina, deputy mining
minister. Colombia produced 85.8 million tonnes last year.
"There's going to be a very good increase but not what was
planned due specifically to the stoppages that happened in
Drummond, Prodeco and Fenoco. That's going to reduce output,"
Medina told journalists Thursday evening at a conference in
Workers at Colombia's main railway, Fenoco, went on strike
earlier this year for 25 days, paralyzing exports from
Colombia's main coal-producing province of Cesar. [ I D:nCOCOAL]
Fenoco transports coal for Drummond International
, Goldman Sachs affiliates and Glencore
International Plc's Prodeco unit.
"The other impact was the price of coal this year, mainly
metallurgical. It's been low and that is affecting coal
production in the country," Medina said.
Metallurgical coal prices have plummeted this year as the
global steel industry grapples with weak demand and falling
prices. Metallurgical coal is used to make steel.
Hundreds of thousands of tonnes of Colombian metallurgical
and pulverized coal have not made it to the market due to l ow
prices, high production costs and the firming peso currency as
producers scramble to sell cargoes, industry sources say.
While the Fenoco walkout ended after the company scored
victories against the workers in court, another strike at
Prodeco's La Jagua mine has dragged on for about three months.
After failing to come to an agreement, union officials said
they are only waiting for the labor ministry to request the two
sides go to an arbitration tribunal and lift the walkout.
The Andean nation's thermal coal sector is dominated by
major producers such as Glencore, Drummond and Cerrejon, which
is jointly owned by BHP Billiton Plc, Anglo American Plc
and Xstrata Plc.
The metallurgical sector, however, is made up of small
miners in central provinces that sell to larger companies for
This year, Colombia's mining industry has also faced
increased attacks by Revolutionary Armed Forces of Colombia
(FARC) rebels despite Bogota sending thousands of additional
troops to protect the sector.
The government and FARC guerrillas started a peace process
this week aimed at finding a negotiated end to the
five-decade-old conflict, but in the first sign of discord,
rebel leader Ivan Marquez slammed foreign oil and mining
The bearded and bespectacled Marquez specifically called for
production halts at Cerrejon and Drummond, the country's two top
Colombian President Juan Manuel Santos' administration has
ruled out talking about foreign investment in the negotiations.