Drummond’s Coal Workers Begin Voting on Wage Accord Renewal

Workers at Drummond Co., Colombia’s second-biggest thermal coal producer, began voting on demands for a three-year labor accord, a union official said.

Workers will set their demands for a wage increase and improved health benefits by April 16, Drummond union negotiator John Mendoza said. The union will have as long as 60 days to reach an agreement with the company.

“We’ve held the first of three assemblies,” Mendoza said today in an e-mailed response to questions. “We’ll present the list of demands agreed to by the workers at the end of April.”

Miners in March ended a monthlong strike at the Cerrejon mine owned by BHP Billiton Plc (BLT), Xstrata Plc (XTA) and Anglo American Plc (AAL) after signing a labor accord that included annual pay rises and better health insurance. A drop in coal exports curbed economic growth in the first quarter, according to Finance Minister Mauricio Cardenas, prompting the central bank to cut its benchmark rate by a half point to 3.25 percent on March 22.

An armed group bombed and fired bullets at the Sintramienergetica union office in the northern city of Valledupar on April 2, hours before the workers’ vote, Mendoza said. Mendoza said he and other union officials received death threats from a paramilitary group in telephone calls.

“The situation isn’t good,” Mendoza said. “But despite this, I will remain at the forefront of this negotiation.”

Guerrilla attacks

Paramilitary groups which have battled the Revolutionary Armed Forces of Colombia, or FARC, for decades, accuse union officials of supporting guerrilla activities. Rebels have attacked Cerrejon four times this year.

Drummond, based in Birmingham, Alabama, restarted coal exports last month after the government lifted a three-week ban on its loading operations March 1.

The government is investigating a Jan. 12-13 incident in which Drummond dumped what it described as water mixed with coal into the Caribbean to prevent a barge from sinking.

Drummond controls more than 2 billion tons of reserves and shipped about 29 million tons of coal in 2011, according to its website. Paulo Gonzalez, a Drummond spokesman, didn’t respond to telephone calls and an e-mail seeking comment.

Thermal coal for delivery to Amsterdam, Rotterdam or Antwerp in 2014 rose 0.7 percent to $93.65 a ton today, according to broker data compiled by Bloomberg.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

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

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