Colombia's 2013 coal output slips 4 percent in rough 2013

BOGOTA Fri Feb 7, 2014 7:09pm EST

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BOGOTA Feb 7 (Reuters) - Colombia produced 85.5 million tonnes of coal in 2013, the National Mining Agency said on Friday, a four percent year-on-year drop that took output below target and reflected strikes at the country's top two miners combined with logistics disruption.

The Andean nation is the world's No. 4 coal exporter and is struggling to put last year's disruption behind it in 2014 after the government in January shut down the port of the No. 2 miner, U.S.-based Drummond over failure to comply with a new environmental law. It is expected to resume exports late March.

Royalties the government earned from its second most valuable commodity export after oil totaled 1.2 trillion pesos ($585.3 million) in the fourth quarter of the year compared with 1.6 trillion in the same period of 2012, a drop the agency said was partly also due to lower prices.

The agency did not offer a figure for total royalties earned in the year or a coal production forecast for 2014.

Despite the year-on-year drop, output surged 18 percent in the final quarter of the year versus that period of 2012. Those three months were free of strike action or significant logistics disruption.

Colombia's government ordered Drummond to shut down its port in early January after missing the January 1 deadline to switch to conveyor belt loading and end a more polluting practise of loading ships with cranes and barges.

Drummond, which produces about a third of Colombia's coal, expects to finish building its conveyor loader by late March though a senior government mining official has said the company may manage to complete the installation sooner.

Coal prices in Europe where the bulk of Colombia's exports are consumed, rose sharply on the news of the loss of Drummond's output for three months but have since slipped due to a mild European winter among other factors.

Goldman Sachs-owned Colombian Natural Resources (CNR), a comparatively small producer of Colombian coal, said last month it was looking for alternatives to continue exporting as its own port also lacks a conveyor belt loader.

Strike action lasting one month from February last year at the country's top coal miner, joint venture Cerrejon, and a longer seven-week stoppage at Drummond from late July were some of the worst disruption to blight the sector last year.

Cerrejon is a joint venture between Anglo American Plc, BHP Billiton, and Glencore Xstrata Plc with an integrated project in Colombia comprising of a mine in the northern province of La Guajira, its own railway and port.

Drummond's port facility was also shut down exactly one year ago by the environmental regulator ANLA after it spilled coal into the Caribbean during rough weather. The company was fined around $3.6 million over the incident.

Separately, Colombia's gold production fell 16 percent in 2013 to 1.79 million troy ounces (55.7 tonnes) from 2.13 million in 2012. Colombia is ranked the world's 19th biggest producer according to web site www.goldfacts.org .

Silver production fell 28 percent to 449,000 troy ounces from 623,000 in 2012.

Colombia is the world's biggest producer of emeralds and produced 2.4 billion pesos worth of the gems in 2013, down a fifth from the year before. The ANM did not state the quantity produced.

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