* A strike must happen before Friday cut-off date
* Union and Cerrejon discuss compensation and benefits
* Coal sector faces other problems in major producers
By Jack Kimball
BOGOTA, Feb 7 Colombia's largest coal exporting
company Cerrejon and its workers are meeting on Thursday to try
to avoid a strike over wages that would pile pressure onto an
already troubled sector.
Officials at the company and the union said the two sides
are sitting down to discuss compensation and benefits in a
last-ditch effort to avoid a walkout. One union leader said it
is prepared to strike unless Cerrejon makes a generous new
Laborers at Cerrejon, a joint venture between BHP Billiton
, Anglo American and Xstrata, voted on
Jan. 29 to strike. By law, however, they cannot walk out on the
first or last of a 10-day window, which ends on Friday.
A strike at Cerrejon would add to problems in the Andean
country's coal industry, which is facing an environmental
inquiry into Drummond, the second largest exporter, and a
payment dispute at a Goldman Sachs Group Inc affiliate.
In total, about 85 percent of Colombia's daily coal
production would be shut off.
Traders said that prompt prices were up about $0.50-$0.80
per tonne on Thursday on the possibility of a strike.
During the last wage talks in 2011, Cerrejon and the union
were able to reach agreement. The last time Cerrejon had a
strike was in the 1990s.
Ten years of U.S.-backed military operations against leftist
rebel groups have opened up large swathes of territory to new
investment and helped secure areas where exploration and
production were already happening.
Like other commodity-exporting countries, Colombia has faced
increased environmental and social demands, which some analysts
say have replaced guerrilla violence as the main risk for mining
investors in the world's fourth-largest coal exporter.
The coal sector faced a series of worker disputes last year,
including a strike at the country's main coal railway, that
dragged down growth in the third quarter as stoppages bit into
exports and regional economies.
On Wednesday, Colombia suspended coal loading at Drummond's
port after a possible spill last month, a government agency
said. The suspension will be lifted once Drummond presents a
Drummond, which is 20 percent owned by Japan's Itochu Corp
, produces about 80-90,000 tonnes per day from its mines
in the northern Cesar province. The company will also hold wage
discussions with workers later this year.
Nearby, Goldman Sachs affiliate Colombian Natural Resource's
La Francia thermal mine has been shut since around Jan. 21 due
to a pay dispute with the operator, union officials said.
The mine produces around 10-20,000 tonnes per day.
Nationally, Colombian production is around 220-250,000
Latin America's fourth-largest economy wants to boost coal
output this year to around 98 million tonnes mainly due to
expansion projects at Cerrejon, Drummond and Glencore's Prodeco
unit from around 90 million tonnes last year.