BOGOTA Dec 19 Colombia will fine U.S.-based
miner Drummond Co Inc if it continues to load coal by
crane instead of using an automated conveyor belt system that
will be mandatory from Jan. 1, Environment Minister Luz Helena
Sarmiento said on Thursday.
The minister did not specify the amount of the daily fine or
indicate whether it was intended as a means for Drummond to
continue to load coal while it finishes building its conveyor
belt system. That system will likely take a few more months to
complete, according to traders.
The issue of whether or not Drummond can load coal from
January when a new law takes effect prohibiting loading coal
onto ships by crane is of paramount importance to the seaborne
coal market as it could slash shipments from the world's No. 4
coal exporter by a third and raise prices.
Mining ministry officials were seeking a work-around to
enable Drummond to keep exporting from next year but said that
as of Wednesday, none had been found. A shutdown at Drummond
would also put a major dent in the Colombian government's income
The government is imposing the change in the way coal is
loaded to reduce environmental pollution. Lumps of coal and dust
drop into the sea when the fuel is picked up by crane, while the
new conveyor belt systems that will stretch out to waiting ships
off the shore will be fully enclosed.
Separately, Sarmiento announced the government was fining
Drummond 7 billion pesos or about $3.6 million over the spillage
of coal from a barge into the Caribbean Sea at the company's
privately owned port in January this year. She said it was the
heaviest fine ever imposed on a company operating in Colombia.
Drummond said at the time that the coal was spilled during a
spell of rough weather. Colombia's environmental licensing
agency, ANLA, temporarily shut down loading at Drummond's port
after the incident while it investigated what happened.
Colombia's coal sector is dominated by big thermal coal
producers with their own port and rail facilities which also
include Glencore and Cerrejon, a joint-venture owned by BHP
Billiton, Anglo American Plc and Xstrata