BHP’s Cerrejon Workers End Strike After Signing Labor Agreement

Miners at BHP Billiton Ltd. (BHP)’s Cerrejon coal venture in Colombia ended a 32-day strike today after signing a three-year labor deal that includes annual pay rises and improved health insurance, the union said.

Workers, who downed tools job Feb. 7 at the country’s biggest coal mine, accepted a 5.1 percent wage increase in the first year and increases of inflation plus 1.5 percent and 1.7 percent, respectively, over the following two years, said Marlon Gomez, a negotiator for union Sintracarbon.

“It was a successful strike with no legal reprisals,” Gomez said today in a telephone interview from La Guajira, near the mine. “We’re satisfied, though there’s a bitter taste from having extended the accord for three years when traditionally they last for two.”

Cerrejon, whose owners also include Xstrata Plc (XTA) and Anglo American Plc (AAL), produced 34.6 million tons of coal last year, according to its website. Along with Drummond Co., which restarted operations last week after a three-week suspension, it accounted for 80 percent of Colombia’s coal exports of about 75 million tons in 2011, according to the World Coal Association.

“We all lost out with the strike,” Cerrejon President Roberto Junguito said in a statement. “Now the priority is to focus on safely reestablishing the operation, regaining our clients’ trust and focusing on expansion projects.”

Health Insurance

Coal Marketing Co., Cerrejon’s exclusive coal shipper, will “progressively” lift a force majeure declaration, Chief Executive Officer Howard Gatiss said today in an e-mailed response to questions. Force majeure enables companies to suspend contractual obligations in the face of unexpected events including strikes.

Other benefits included a 3.4 million peso ($1,890) bonus, a 9.6 million peso advance on productivity bonuses over the next three years, improved health insurance and housing bonuses.

Thermal coal for 2014 delivery to Amsterdam, Rotterdam or Antwerp fell 0.2 percent to $95.60 a ton today. The benchmark price for hard-coking coal in the first quarter is $165 a ton, down 2.9 percent from the fourth quarter and the lowest since 2010, according to data compiled by Bloomberg.

To contact the reporters on this story: Alex Emery in Valledupar at aemery1@bloomberg.net; Oscar Medina in Bogota at omedinacruz@bloomberg.net.

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

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