* Strike was called before Friday cutoff date
* Union, Cerrejon disagreed on compensation and benefits
* Last walkout at Cerrejon was in 1990
* Coal sector faces other problems in major producers
By Jack Kimball
BOGOTA, Feb 7 Workers at Colombia's largest coal
exporting company Cerrejon began a strike on Thursday, the first
in more than two decades, after the two sides failed to reach an
agreement during last-minute talks on wages and benefits.
The dispute adds to problems in the Andean nation's coal
industry, which is facing an environmental inquiry into
Drummond, the second-largest exporter, and a dispute at a mine
owned by a Goldman Sachs Group Inc affiliate.
In total, about 85 percent of Colombia's daily coal
production will be shut down as a result of the sector's recent
problems, according to calculations by Reuters and industry
"At 3 p.m. (2000 GMT) exactly, the strike began," Orlando
Cuello of the Sintracarbon union told Reuters.
Cerrejon said the strike would cause the economy to lose
about $3 million daily.
"For Cerrejon, Sintracarbon's decision to launch a strike is
unfounded and irresponsible," it said in a statement.
"After a thorough analysis of the arguments raised by union
leaders, both at the negotiating table and in their public
statements, Cerrejon is not clear on what are the real
motivations that led them to order the cessation of activities."
Laborers at Cerrejon, a joint venture between BHP Billiton
, Anglo American and Xstrata, voted on
Jan. 29 to strike. By law, however, they could not walk out on
the first or last of a 10-day window, which will end on Friday.
During the previous wage talks in 2011, Cerrejon and the
union were able to reach agreement. The last time Cerrejon
workers carried out a strike was in 1990.
Prices for coal delivered into northwestern Europe moved up
slightly on Thursday as did near-term swaps on concerns about
supply from Colombia.
"Very serious ... We hope that the strike isn't long because
it has a major impact on the country, on production, on the
mining part of GDP. We hope for a speedy solution to the issue,"
Maria Constanza Garcia, head of the government's National Mining
Agency, said in the coastal city of Cartagena.
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 in progress.
Like other commodity-exporting countries, Colombia has faced
increased environmental and social demands, which some analysts
say have replaced guerrilla activity 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 loading at Drummond's port
after a coal barge nearly sank in bad weather last month, a
government agency said. The suspension will be lifted once
Drummond presents a contingency plan.
Drummond Ltd vowed on Thursday to take
"corrective" measures at its Caribbean port.
Drummond, which is 20 percent owned by Japan's Itochu Corp
, produces about 80,000-90,000 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 remained shut since late January due
to a pay dispute with the operator, union officials said.
The mine produces around 10,000-20,000 tonnes per day.
Nationally, Colombian production is around 220,000-250,000
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.
Garcia of the mining agency told Reuters that Colombia
produced 88 million tonnes of coal last year, up nearly 3
percent from the previous year, but about 4 million tonnes below
the 2012 goal. Official data will be published in coming weeks.