Colombia to miss 2012 coal production goal on labor unrest

BOGOTA Tue Nov 20, 2012 9:53am EST

BOGOTA Nov 20 (Reuters) - Colombia will produce less coal than planned in 2012, with output dropping around 2 percent from its goal after labor unrest in the top-producing province halted operations earlier this year, the government's mining information system said.

A five-week strike at Colombia's main coal railway and a three-month walkout at Glencore International Plc unit Prodeco's La Jagua mine slashed coal production in the third quarter, causing limited force majeure by two of the country's top exporters.

Coal production fell 8 percent in the third quarter to 21 million tonnes from a year earlier due to the strikes in Cesar province, the mining regulator said earlier this month.

Production for 2012 could reach about 90 million tonnes if fourth-quarter levels are the same as a year earlier, Colombia's mining information system, which is part of the mining and energy planning department, said in an analysis of third-quarter production published on Tuesday.

"If we reach the average level of production of the first two quarters, output may arrive at 91 million tonnes, which is below the budgeted projections," the agency said.

In October, the government lowered its output goal to 93 million tonnes for 2012 from a previous target of 97 million tonnes after the walkouts.

But output this year will still be higher than last year's production of 85.8 million tonnes.

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.

Apart from striking workers, the mining industry has also faced increased attacks by Revolutionary Armed Forces of Colombia (FARC) rebels this year despite Bogota's sending thousands of additional troops.

The sector is hoping for a reprieve from rebel assaults after the Marxist guerrillas called a two-month unilateral ceasefire on Monday as delicate peace talks began in Cuba to try to end a half-century of war.

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