UPDATE 1-Drummond to export from Colombia in January, pay fine

Fri Dec 20, 2013 1:45pm EST

By Luis Jaime Acosta and Peter Murphy

CIENAGA/BOGOTA, Colombia Dec 20 (Reuters) - U.S. coal miner Drummond Co Inc will continue to export coal from Colombia in January, when a new environmental law takes effect, and it will pay a fine to keep loading ships by crane, the head of its Colombian operations said on Friday.

The announcement ends concern that the company's exports, about a third of Colombia's total shipments, would be shut down during the roughly three months Drummond said it needs to begin loading ships by conveyor belt, a legal requirement from Jan. 1.

The price of coal for delivery in January into Europe's main terminals in Amsterdam, Rotterdam and Antwerp fell $2.55 to $83.75 a tonne on Friday, compared with the previous session.

"We consider it fundamental and very important, not only for the company, but for the country, to continue operating and this means fines," Jose Miguel Linares said in a press conference at its private port in Cienaga. "Well, we have to pay these fines, we don't know how much they would be."

The government is imposing the change to reduce environmental pollution. Lumps of coal and dust drop into the sea when the fuel is picked up by crane. The new conveyor belt systems to waiting ships will be fully enclosed.

Environment Minister Luz Helena Sarmiento said coal miners could continue loading by crane after Jan. 1 if they pay a daily fine.

"We are conscious that at no time exports can be stopped, that there are royalties (earned) through these companies, but also that it's necessary to preserve and adhere to environmental norms," Sarmiento was quoted as saying by Caracol Radio.

She said the fine would rise the longer the loading by crane continued, and could eventually result in a government order to close the facilities temporarily, an order that Linares said Drummond would obey.

Linares also expressed regret over the spillage of hundreds of tonnes coal from a barge into the Caribbean Sea last January, for which the government imposed a 7 billion pesos ($3.6 million) fine on Thursday.

Barges carry coal out to deeper waters where floating cranes load it onto ships, but they are not needed when conveyor belt systems are in place. Colombia's biggest exporter, joint-venture Cerrejon has been loading by conveyor belt since its operations began in Colombia in the 1980s.

Colombian Natural Resources, a smaller producer owned by Goldman Sachs Group Inc, will also not be ready on time. Its representatives could not immediately be reached to determine whether the company would continue exports or seek to use the facilities of other companies.

$1 = 1936.5500 Colombian pesos)