Colombia's Cerrejon, coal union may restart wage talks on Monday

Sat Feb 23, 2013 12:27pm EST

* Cerrejon workers have been on strike since Feb. 7

* Company, union may sign pre-talks deal on Monday

* After pre-deal, wage talks may have fixed 5-day period

By Jack Kimball

BOGOTA, Feb 23 (Reuters) - Colombia's largest coal exporter, Cerrejon, and striking workers may restart stalled wage negotiations on Monday after agreeing on logistical issues for the talks, the union and the company said on Saturday.

Cerrejon, the world's fourth-largest coal exporter, has lost an average of around 180,000 tonnes of production and about $1.5 million in royalties daily as a result of the walkout and a loading suspension since early this month.

Since the start of the strike, talks between Cerrejon and the Sintracarbon union have focused exclusively on the rules and regulations for how to begin substantive negotiations. The process has been mediated by the government.

Cerrejon, which has mines in the northern province of Guajira, said that once a pre-deal was signed by both sides, wage talks would begin with a limited time-frame of five days. It was not immediately clear what would happen if no deal were reached after five days.

"It is hoped that the signing of the minutes and the restart of the dialogue occur in the mine on Monday, February 25," Cerrejon said in a statement.

Sintracarbon president Igor Diaz confirmed that negotiations may re-start on Monday to try to end Cerrejon's first strike in two decades, but said no time limit had been agreed upon.

"The conditions have not yet been defined. They'll be defined on Monday," Diaz told Reuters.

The strike has forced Cerrejon to declare force majeure on some of its cargoes, its CMC marketing arm said last week.

Cerrejon is a joint venture between Anglo American, BHP Billiton and Xstrata and accounts for nearly 40 percent, or 34 million tonnes, of Colombia's national annual output. It supplies power generators mainly in Europe.

Analysts said the apparent global abundance of coal and weak demand in key markets may mean buyers have been cushioned from big price rises despite multiple disruptions to shipments.

Prompt deliveries of coal into northern European ports are trading just below $90 a tonne, just a few dollars above their levels before the Cerrejon strike began.

API2 coal swaps for 2014 delivery on Friday settled near $99/tonne, $3 above levels at the start of 2013.

Cerrejon's problems have added to the woes of the Colombian coal sector, including the suspension of trains running at night in the main coal-producing province of Cesar and the suspension of loading at the main Caribbean port of Drummond, the other top Colombian exporter.

Colombia's deputy mining minister told Reuters on Wednesday that the issue with the main coal railway, known as Fenoco, may be resolved within a month.

Last year, strikes at Fenoco and a Glencore-owned mine helped drag down Colombia's economic growth in the third-quarter, and the fear is that a prolonged stoppage at Cerrejon and Drummond this year may again hit the economy.

The economy is already hurting from weak data in manufacturing and industry. Overseas sales have also suffered from lower commodity prices.

On Friday, the central bank said that reduced coal exports would hit economic growth in the first quarter.

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