Colombia rejects Glencore unit’s return of two coal mining concessions

The logo of commodities trader Glencore is pictured in front of the company's headquarters in Baar, Switzerland, July 18, 2017. REUTERS/Arnd Wiegmann/File Photo

BOGOTA, April 7 (Reuters) - Colombia’s national mining agency (ANM) said on Wednesday it has initially rejected a request by coal miner Prodeco, a wholly-owned unit of miner and commodity trader Glencore (GLEN.L), to return two of its Colombian concessions.

Anglo-Swiss company Glencore said in February Prodeco would hand back its operations at the Calenturitas and La Jagua mines to Colombia, after its request to keep the operations on care and maintenance was denied by the ANM.

The two mines were placed on care and maintenance last March amid the coronavirus pandemic.

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Obligations which must be met before returning two of the contracts for concessions included within La Jagua - including for environmental management - remain outstanding, the ANM said in a statement, making the request to return them "legally inviable."

"It's not possible for the (agency) to approve the request for resignation because it is not up-to-date in complying with all contractual obligations at the time of submitting the resignation, as required by the mining code," ANM President Juan Miguel Duran said in a separate message.

While the request to hand back the DKP-141 and HKT-08031 contracts has initially been denied, the company can request to relinquish the concessions again in the future.

"Prodeco is acting in full accordance with the legal and regulatory framework governing our operations and the mining sector," the company said in an email, adding that it is evaluating the ANM's decision.

The two mining operations are made up of five concessions, including one at Calenturitas. Resignation requests for the three remaining concessions are still being evaluated, Duran said, while a sixth concession at La Jagua finished in 2019.

Glencore's coal production in 2020 fell 24% to 106 million tonnes, with Prodeco's output plummeting 76% to 3.8 million tonnes.

Production at Cerrejon - a Colombian coal mine owned jointly by Glencore, Anglo American (AAL.L) and BHP (BHP.AX) - also fell last year, declining 52% to 12.4 million tonnes. read more

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Reporting by Oliver Griffin

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