Why Colombia blocked a US company’s coal exports

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Drummond Co. helped make Colombia the world’s No. 4 coal exporter. But after alleged dirty deeds, now Bogota’s punishing the Alabama firm. (Shutterstock)

BOGOTA, Colombia — By shipping 80,000 tons of coal per day, the Alabama-based Drummond Co. has helped turned Colombia into the world’s fourth largest coal exporter — but it’s always been a dirty business.

From Drummond’s Caribbean port near the resort city of Santa Marta, cranes loaded Drummond coal onto open-air barges for delivery to ships. This process kicked up coal dust that fouled the air, water and beaches, angering local fishermen, beachgoers, hotel owners and environmental activists.

New environmental standards

But it all came to a halt Jan. 13 after the Colombian government ordered Drummond to stop loading coal until it meets new environmental standards. Under a Colombian law that took effect Jan. 1, coal must now be loaded directly onto ships via enclosed conveyor belts, a much cleaner system.

The Colombian government and Drummond

The Colombian government ordered Drummond to stop loading coal until it meets new environmental standards. (AP)


“Drummond is flouting the law by maintaining a coal export system that is polluting the bay of Santa Marta,” President Juan Manuel Santos said, shortly before his government ordered the shutdown.

The Drummond drama reflects the hurdles in President Santos’ quest to quickly scale up mining. When he was inaugurated four years ago, Santos declared that mining would become one of the country’s economic “locomotives.”

As security improves in a country plagued by drug traffickers and Marxist guerrillas, vast new areas have opened up for gold, silver, nickel and coal extraction. Mining now provides nearly one-fourth of Colombia’s export income.

But it can leave a huge footprint.

Contaminated water and  mercury poisoning

Massive protests spurred by fears of a future of contaminated water and mountains of mining waste have put many projects on hold. In some Colombian villages near mining sites, people suffer from mercury poisoning and black lung disease.

The coal mining industry has already stained the beaches of Santa Marta, one of Colombia’s premier tourist destinations.

“The color of the beaches has changed,” said Julio Vera, a private energy consultant in Bogota. “The sand in Santa Marta was very white. At this moment the beach in Santa Marta is not white. It is gray or black in some parts.”

The controversy over Drummond’s outdated coal-loading methods isn’t the first time the company has been accused of misdeeds in Colombia.

The company has been embroiled in long-running court battles in both the United States and Colombia over its alleged ties to Colombian death squads that killed labor activists working for the company. Drummond has vigorously denied any wrongdoing.

Santa Marta

In an episode that exposed the perils of its outdated loading system, a Drummond barge last January dumped 1,900 tons of coal into the ocean near Santa Marta.

the beaches of Santa Marta

The coal mining industry has already stained the beaches of Santa Marta, one of Colombia’s premier tourist destinations.(Shutterstock)

At first, the company said nothing. But then Alejandro Arias, a Colombian journalist who was investigating health problems among Drummond workers, posted photos of the incident on his blog.

“The photos provided strong evidence of the way Drummond deliberately dumped coal into the ocean,” said Arias, who won Colombia’s top journalism prize for publishing the images.

Drummond eventually told government officials that it had to toss the coal overboard to prevent the barge from sinking in choppy seas. The company was fined $3.6 million and ordered to clean up nearby beaches.

Drummond displayed “a defiant attitude about the accident last year when they lied about it,” Environment Minister Luz Helena Sarmiento told the Bogota daily El Tiempo.

Despite the crackdown on Drummond, Colombia’s record at enforcing environmental regulations is spotty. Mining companies often violate these laws because they know they’ll get away with it, says Julio Fierro, a Colombian geologist at the National University in Bogota.

Mining: a source of social and environmental conflict

“That’s the problem with mining in countries with weak government institutions,” Fierro says. “Mining always becomes a source of social and environmental conflict.”

Drummond did not respond to requests for comment. In a communique posted on its website, the company said its port renovations, that include construction of a new conveyor belt loading system, should be completed in March, when Drummond expects to resume exporting Colombian coal.

But for every day Drummond’s export operations are shut down, the Colombian government will lose about $6 million in taxes and royalties, according to Amylkar Acosta, the minister of mines and energy. Colombian Sen. Jorge Robledo has urged the government to sue Drummond for this lost income, saying the company knew at least seven years in advance that it would have to modernize its port by 2014.

Drummond is the only one of the country’s four main exporters — which send much of their coal to Europe — that failed the meet the deadline for switching to a direct-loading system. Colombia’s biggest coal exporter, Cerrejon, has been loading by conveyor belt since its operations began in the 1980s.

Environment Minister Sarmiento shrugged off the financial hit, telling El Tiempo that it’s far more important to modernize the coal industry.

“Recuperating the beaches of Santa Marta could end up costing us much more than the losses that will be incurred by suspending coal exports,” she said.

“What we would earn through coal taxes and royalties will not help in the future because we are going to have to spend 200 percent of that” on clean-up operations.

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