By Peter Murphy and Nelson Bocanegra
BOGOTA Jan 8 Colombia on Wednesday suspended
the loading of coal by U.S.-based miner Drummond
until it complies with new regulations governing port
operations, an action that would slash shipments from the
world's No. 4 coal exporter by a third until around March.
The decision marked a U-turn by the government after it said
last month it would fine Drummond - the country's second-biggest
miner of coal - on a daily basis from Jan. 1 when the new
regulations took effect but not stop it from loading coal.
New rules require coal exporters to use conveyor belts that
stretch far offshore to load ships and abandon the polluting
method of using barges and cranes from which dust and lumps of
coal fall into the sea. But Drummond says it won't have the
necessary infrastructure in place until March.
"The national government has made the determination to
suspend loading of coal until the direct loading system is put
in place," Environment Minister Luz Helena Sarmiento told
reporters in the northern coastal city of Santa Marta after
visiting Drummond's privately owned port nearby.
"This decision announced today is to be adhered to
immediately," said Sarmiento, adding that barges already loaded
would be permitted to make their way out to waiting ships for
the next five days.
Drummond's local press office said the company may make a
statement later on Wednesday.
Steam coal prices had risen ahead of the announcement. Coal
for February delivery at the European terminals of Amsterdam,
Rotterdam and Antwerp was up $3.60 in afternoon trading from the
previous settlement at $84.75 by tonne.
Colombia is the world's fourth-biggest exporter of coal,
most of which is consumed in power stations.
Though in December the government had emphasized the
importance of avoiding disruption to coal exports, Colombia's
second most valuable commodity, its discourse changed abruptly
on Wednesday, possibly in light of negative press coverage
Drummond's ability to flout the new regulations has generated.
"In Colombia you have to comply with the law," Sarmiento
"We know it is a very costly decision for the country, quite
costly in terms of royalties, but what is at stake are the
social and environmental systems of the country. If we don't do
it we would lose credibility," Sarmiento told reporters.
Drummond produces roughly a third of Colombia's coal and
pays the government some 4.2 billion pesos ($2.17 million) a
day, about 2.7 billion pesos of which is royalties and the rest
made up of other taxes.
Colombia's President Juan Manuel Santos plans to stand for
re-election in polls set for late May and any perceived leniency
in dealings with foreign companies flouting local laws may have
been damaging when campaigning gets under way.
His mining minister, Amylkar Acosta, echoed Sarmiento's
comments in a separate statement before the suspension was
"Before everything else comes environmental sustainability,"
The government first announced it would impose a switch to
automated loading about seven years ago. The biggest coal miner,
joint venture Cerrejon, is unaffected as it has used conveyor
belt loading from its outset in the 1980s.
Sarmiento said any decision by Drummond to lay off or
suspend workers at the port that may result from Wednesday's
decision, would require the prior approval of the Labor
Workers' union Sintramienergetica which led a seven-week
strike at the company last year says hundreds of workers are
employed at the port, many of whom are expected to be
transferred to other positions or made redundant when it
eventually switches to automated loading.
Coal is Colombia's most valuable commodity after oil and
accounted for 11 percent or $5.9 billion of the country's
exports between January and November of 2013, the latest data