UPDATE 1-Drummond coal miners in Colombia vote to strike -union

Wed Jul 17, 2013 11:01pm EDT

* Workers to meet Drummond, govt mediators again on Thurs

* Union says strike can still be avoided if Drummond improves offer

* Stoppage would start after Friday and before end of next week

By Peter Murphy

BOGOTA, July 17 (Reuters) - Workers at Drummond Co Inc's coal mining operations in Colombia voted to strike late on Wednesday after failing to reach a deal with the U.S. company in weeks of talks over pay and conditions, a union leader said.

But Edgar Munoz, vice-president of the Sintramienergetica labor union, said staff were still open to negotiating and would meet Drummond officials and Labor Ministry representatives on Thursday in a further attempt to thrash out a deal.

A stoppage by Drummond workers would mark the second major walkout in the Colombian coal industry this year after miners at rival Cerrejon held a month-long strike that began in February. Combined, the strikes could further dent economic growth in 2013, as coal is a top export earner for the Andean nation.

"We are willing to reach an agreement but if there isn't one, we will strike," Munoz told Reuters, adding that the start date for the walk-out would only be decided after Thursday's negotiations, if they failed.

A prolonged stoppage at Drummond, which produced 26 million tonnes or almost one third of Colombia's coal in 2012, could boost European physical coal prices as buyers prepare to stock up for winter. Colombia is the world's fourth-biggest coal exporter.

Physical coal prices for delivery to Europe are currently trading around $75.60 a tonne, up from just above $70 in late June.

The miners would have to begin their strike after Friday and before the end of next week, to comply with deadlines set out by local labor laws, Munoz said.

A strike would be another headache for the government as it tries to boost sluggish economic growth amid a slew of labor disputes across the nation. Strikes in the coal sector slowed GDP growth in the first quarter and could hobble expected acceleration in the second half.

It would also add to Drummond's woes in what has been a difficult year for the firm. Loading at a port it controls was suspended in February after bad weather caused a spill from a barge, and there was a ban on night-time railway use on a line part-owned by Drummond.

"We understand the importance of this for the country and the government's royalties," Munoz said. "Striking means a big economic loss for the workers and for the company. That is why we are trying to find a solution without a strike."

A Drummond spokesperson offered no comment on the possible strike when contacted by Reuters.

SIDES CLOSE TO DEAL ON PAY

The country's artisanal and small-scale miners, which produce a limited amount of Colombia's coal, also began a strike on Wednesday to demand the outlawed activity be made legal.

"We have been forced to beg in our own territory for our own riches," said Ruben Dario Gomez, a spokesman for Conalminercol, the small miners' union.

The miners began blocking roads early Wednesday, prompting Colombia's President Juan Manuel Santos to declare he would not tolerate the closure of a single highway in the country while condemning environmental damage he said wildcat miners caused.

Ballot boxes in which Drummond workers had been casting votes in the last few days at the mines and in surrounding towns were closed at 7 p.m. local time (8 p.m. EDT/0000 GMT) on Wednesday and counting began immediately afterwards.

The union demands reached as much as a 10.7 percent pay increase and a one-time bonus of 7 million pesos ($3,700), among others.

Drummond, which last weekend increased its pay raise offer to 4.5 percent on top of a one-time bonus, has said the union's demands for much more were beyond what would be sustainable for it or any other mining company to pay.

But Munoz said he was confident the union could reach a deal with Drummond over pay as the company's offer was near a level it would accept.

Negotiations to retain 400 workers at Drummond's seaport, many of whose jobs Munoz said were threatened by technological changes, were proving tougher.

Drummond had sought to cut some or all of the 400 workers, Munoz said. The company said in a recent statement that it was trying to find new positions for some of the employees and devising a "withdrawal plan" for those it could not.

"On the question of salary, we can reach a deal," Munoz said. "The difficult part of the negotiation is to do with the relocation of the (port) workers."

Drummond employs about 10,000 workers across its main Colombia operations, about half of which are direct hires represented by Sintramienergetica and the other half contractors represented by a separate entity. They would follow Sintramienergetica's decision to strike, Munoz said.

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