Coal strike in Colombia halts 900,000 tons of cerrejon cargo

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Workers at Cerrejon, the world’s largest export-focused, open-pit coal mine, walked off the job on Feb. 7 to push for a 5.8 percent raise. (screenshot)

BOGOTA, Colombia — Coal Marketing Co., the exclusive shipper of coal from BHP Billiton’s Cerrejon venture with Xstrata and Anglo American in Colombia, has canceled about 900,000 metric tons of shipments because of a strike.

The miners’ stoppage, which entered its 13th day Tuesday, led the coal trader to cancel about 10 shipments, Chief Executive Officer Howard Gatiss said.

“CMC has declared force majeure on a number of shipments because of the strike,” Gatiss said Tuesday in a telephone interview from Dublin. “We’re in very uncertain territory as the mine has never declared a force majeure before.”

Workers want a 7% pay increase

Workers at Cerrejon, the world’s largest export-focused, open-pit coal mine, walked off the job on Feb. 7 to push for a 7 percent pay increase and have since lowered the demand to a 5.8 percent raise. Government-brokered negotiations collapsed over the weekend after company and union officials were unable to agree on a time limit for wage talks.

Cerrejon produced 34.6 million tons last year, according to its website. Along with Drummond Co., whose loading license was suspended this month, it accounted for 80 percent of Colombia’s coal exports of about 75 million metric tons in 2011, according to the World Coal Association. Cerrejon ships half of its coal to Europe, with another quarter going to the Americas, according to CMC.

13 bulk carriers are waiting

There are 13 bulk carriers waiting off the Colombian port of Puerto Bolivar, from where the Cerrejon joint venture exports coal, ship-tracking data from IHS Fairplay compiled by Bloomberg show. A further three ships are sailing towards Colombia and signaling Puerto Bolivar as their next destination, according to IHS Fairplay, a division of IHS Inc., an Englewood, Colorado- based researcher.

Thermal coal for 2014 delivery to Amsterdam, Rotterdam or Antwerp rose for a second day, gaining 0.1 percent to $99.10 a ton today. 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.

BHP spokesman Ruban Yogarajah and Anglo spokesman James Wyatt-Tilby, both based in London, directed queries to Cerrejon spokesman Juan Carlos Restrepo in Bogota, who declined to comment. Xstrata’s London-based external press officer Andy Mills said he couldn’t immediately comment.

Xstrata, which also faced coal shipment delays in Australia this month because of a storm, rose 5 pence, or 0.4 percent, to 1,117.50 pence in London today. Anglo gained 12.5 pence, or 0.6 percent, to 1,995.50 pence, while BHP rose 33 Australian cents, or 0.9 percent, to A$39 in Sydney.

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Source: By Anatoly Kurmanaev and Alex Emery

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