Colombia's Santos sends minister to mediate in coal strike

Fri Feb 8, 2013 2:17pm EST

* Cerrejon workers started strike on Thursday

* Drummond coal loading suspended by environmental body

* Coal sector problems shut majority of production

By Jack Kimball

BOGOTA, Feb 8 (Reuters) - Colombian President Juan Manuel Santos on Friday sent his labor minister to mediate a dispute over wages and benefits at the country's largest coal exporter after its workers went on strike.

The South American country is facing problems at some of the top coal producers that have shut down the majority of shipments from the world's fourth-largest coal exporter and sent global prices rising.

In the first strike at the company in two decades, workers walked off the job on Thursday at Cerrejon, a joint venture between BHP Billiton, Anglo American and Xstrata , after the two sides failed to reach an agreement.

"No one wins here, the country loses. It loses a lot because each day that goes by is forgone royalties, foregone income that's very important which in its vast majority goes to social investment," Santos said on an official radio program.

"I've asked the labor minister to personally go to Cerrejon and see if they can meet again at the table and to do everything possible so that this strike is not successful, does not continue, because the damage to everyone would be very large."

The union said it was ready to sit down with Labor Minister Rafael Pardo and the company, but that no meeting had been officially planned. Cerrejon has repeatedly said it was open to dialogue.

"We haven't received a formal invitation, but the union is open to meeting with the government or the company if they so desire," Orlando Cuello of Sintracarbon union told Reuters.

The strike at Cerrejon as well as a coal loading suspension this week at Colombia's No. 2 exporter, Drummond, sent global prices rising on Friday.

European coal into Amsterdam/Rotterdam/Antwerp (DES ARA), Colombia's main destination, for delivery in April was bid at $90.05 a tonne, its highest since the second week of December. Prices rose $2 from Thursday's close of $87.90.

On Wednesday, Colombia suspended loading at Drummond's port after a coal barge nearly sank in bad weather last month, a government agency said. The suspension will be lifted once Drummond presents a contingency plan.

Drummond Ltd vowed on Thursday to take "corrective" measures at its Caribbean port.

A source close to the company said that operations would likely be up and running in about seven to ten days.

In total, about 85 percent of Colombia's daily coal output is shut as a result of the problems at Cerrejon and Drummond as well as at a mine owned by a Goldman Sachs affiliate, according to calculations by Reuters and industry sources.