UPDATE 2-Colombia sets tribunal to end Drummond strike

Fri Sep 13, 2013 8:40pm EDT

* Strike has run seven weeks, seen hurting economy

* No official confirmation on when it will end

* Came in turbulent year for Colombia coal

By Luis Jaime Acosta and Peter Murphy

BOGOTA, Sept 13 (Reuters) - Colombia's Labor Ministry said on Friday it was calling an arbitration tribunal after 52 days of strike action by workers at the local operations of U.S.-based coal miner Drummond, a decision it said should end the dispute.

The stoppage has halted about one third of production by the world's No. 4 coal exporter and has been the second major strike in Colombia's coal sector this year, cutting royalty revenues for the government and crimping economic growth.

"The Labor Ministry today summoned an obligatory arbitration tribunal at the company Drummond ... The decision ... implies the lifting of the strike declared at the said company," the ministry said in a brief statement on its website.

The strike added to disruption in an already turbulent year for Colombia's coal sector, with a month-long strike at its biggest miner Cerrejon in February and logistics problems that had affected rail transport and the loading of ships.

The Drummond stoppage has had little impact on coal prices however, with the global market well-supplied, a factor that has weighed on prices for most of this year. Coal for delivery to Europe (ARA) traded at $78 a tonne on Friday.

Drummond exported 26 million tonnes of coal in 2012, about one third of the national total. It had been expected to produce 32 million tonnes out of some 94 million tonnes of forecast national output in 2013, which would earn the nation about 900 billion pesos ($480 million) in royalties, the government has said, up from 700 billion pesos last year.

Those targets are likely to be jeopardized after two prolonged stoppages in a sector which accounts for about 2.4 percent of the Andean nation's GDP.

The strike immediately shut down Drummond's exports since it included workers at its privately operated port as well as laborers at its two mines, Pribbenow and El Descanso, located in the north of the country.

Colombian legislation provides for the Labor Ministry to intervene to seek an end to strike action once it reaches 60 days in duration. This means it could potentially continue for another week.

TURBULENT YEAR

Workers represented by the Sintramienergetica union are demanding a pay rise above the 5 percent Drummond has offered, a fixed monthly salary instead of by-the-hour pay and new jobs for 400 port workers who are to be made redundant next January with the introduction of direct conveyor belt loading of ships.

The Labor Ministry said it took the decision to impose the tribunal after the majority of Drummond's roughly 5,000 direct employees voted last week to accept the company's offer and return to work. Sintramienergetica told Reuters this week that most of its members still wanted to continue the strike.

In a proposed three-year pay deal posted on its website, Drummond said it was offering workers a one-off 8.5 million peso ($4,400) bonus upon signing up to it. It did not make mention of an earlier promise to retain 70 percent of the 400 port workers, something the union has demanded be included in the text.

Parties to labor disputes in Colombia usually nominate one representative each then choose a third jointly.

Sintramienergetica negotiator Cesar Flores told Reuters he had not been notified of any decision by the Labor Ministry and would therefore offer no comment. A Drummond spokeswoman said the company may issue a statement later on Friday.

An end to the strike will come as a relief to the government as economic growth appears to be lagging behind its target of 4.5 percent for the year.

It will also take some of the heat off the administration of President Juan Manuel Santos after a run of labor disputes in the last few months including strikes by artisanal miners, state school teachers, and one by farmers nationwide that turned violent.