UPDATE 1-Drummond says it has resumed coal exports in Colombia

Mon Mar 31, 2014 8:21pm EDT

(Adds detail on coal output)

BOGOTA, March 31 (Reuters) - U.S.-based Drummond Co Inc , Colombia's second biggest coal miner, resumed exports of the fuel after an upgrade of its port to meet new environmental legislation, the company said on Monday.

Drummond will invest $360 million to finish the update of its port by August, it said in a statement. On completion, the port will have installed capacity of 60 million tonnes a year.

The government shut the port in January after the new environmental law took effect, slashing the country's coal exports by about a third after it banned the use of cranes and barges to load boats, a practise outlawed due to the pollution it caused.

Resumption of Drummond's exports looks likely to be the end for now of more than a year of logistics and labor strife that has blighted the Andean nation's coal production and caused it to fall 4 percent short of its production target in 2013 when output totaled 85.5 million tonnes.

Drummond was unable to finish building the now legally required conveyor belt loading system before the law took effect, and had not shipped coal since around Jan. 12.

Drummond is working on construction of legally compliant infrastructure that pours coal straight into ships' holds from a covered conveyor belt.

Drummond has cut its production forecast for 2014 to 25 million to 26 million tonnes, down from a previous forecast of 30 million tonnes.

The company, which produces as much as 90,000 tonnes a day, was fined some $800,000 by the government for continuing to load using barges after the law kicked in.

The shutdown of Drummond's port activity had an impact on Colombia's economy the company's coal exports represent about 30 percent of total exports of the mineral from the fourth biggest exporter of coal. (Reporting by Helen Murphy; Editing by Eric Walsh)

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