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Workers’ Strike Halts Rail Service for Glencore, Drummond

A union at Colombia’s largest coal railway went on strike over wages, halting service to mines owned by units of Glencore International Plc, Drummond Co. and Goldman Sachs Group Inc.

Workers at Ferrocarriles del Norte de Colombia SA, known as Fenoco, don’t have negotiations scheduled with management, union leader Felix Herrera said today in a telephone interview from northern Colombia.

“The trains are halted,” Herrera said. “Management hasn’t called us for talks.”

Fenoco President Peter Burrowes said by telephone that the company is seeking to resume talks to ensure a “quick” end to the walkout that halted operations.

The union is the second in less than a week to go on strike near coal mines in northern Colombia, South America’s largest coal supplier. Workers at a mine owned by Glencore International’s (GLEN) Prodeco Group went on strike on July 19, halting production to garner higher pay as the nation’s coal output rises.

The Fenoco railway will carry as much as 50 million tons of coal this year from mines including Glencore’s La Jagua and Calenturitas mines, and operations owned by Birmingham, Alabama- based Drummond, Burrowes said in a July 16 phone interview.

Drummond, in an e-mailed response to questions, said it is evaluating the situation and declined to comment further.

Goldman Investment

Goldman Sach’s Colombian Natural Resources SAS unit didn’t respond to an e-mail seeking comment. The unit bought an 8.4 percent stake in Fenoco, a coal mine and deposit, and port facilities in Colombia as part of a $407 million acquisition this year from Vale SA. (VALE3)

At the Prodeco Group’s La Jagua mine, workers who last week set up tents inside the complex don’t have talks planned today with management, Ricardo Machado, a union leader, said in a telephone interview from the mine.

La Jagua and the nearby Calenturitas mine produce 14.5 million metric tons of coal annually, according to Glencore’s website.

Coal output in Colombia will rise to as much as 100 million tons this year from almost 86 million tons last year, according to a forecast by the National Federation of Coal Producers. Colombia primarily produces thermal coal at northern mines and exports metallurgical coal used for steel production.

To contact the reporter on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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