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Coal trader Klandee sued for non-performance by CMC
May 30, 2012 / 3:47 PM / 6 years ago

Coal trader Klandee sued for non-performance by CMC

LONDON, May 30 (Reuters) - Singapore-based privately-owned trading firm Klandee is being sued for non-performance by CMC, the marketing arm of major coal producer Cerrejon, a Klandee official said on Wednesday.

The dispute arose last December when Klandee was unable to lift a Colombian cargo, after its Chinese buyer for the cargo walked out on the contract, he said.

Klandee asked for the contract to be cancelled but CMC - which markets coal mined in Colombia by the Cerrejon joint venture owned by Anglo American, BHP Billiton and Xstrata - wanted it to stand and has taken the matter to arbitration.

CMC declined to comment.

Klandee has reached a settlement with Indian traders Adani , Klandee and Adani confirmed but has an ongoing dispute with Europe-based Bulk Trading.

A South African cargo bought by Klandee and sold on to another Chinese buyer was held up at Richards Bay Coal Terminal because the buyer delayed opening a letter of credit.

The cargo loaded after a 30 day delay which cost Klandee $300,000 in demurrage, the official said.

Bulk Trading claimed $2 a tonne extra costs from Klandee because the delay moved the cargo loading into the following month and prices were $2 higher, but Klandee is counter-claiming the demurrage costs.

Bulk expects the dispute to go to arbitration eventually, a source close to the company said.

“The Chinese buyer would not open the LC (Letter of Credit),” he said.

“We know that whatever happens with our buyers, it’s our fault but we asked CMC to liquidate the contract, but they refused to cancel it and we were surprised that a producer would show so little flexibility,” he added.

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