Drummond Colombia Coal Protest Halts Production, Union Says

Drummond Co.’s Colombia mine workers halted coal production today in the first day of striking over a wage dispute, the Sintramienergetica union said.

“No one is working,” union negotiator Cesar Flores said in a phone interview from the company’s Pribbenow mine in northern Colombia. “We are waiting for a better offer from the company.”

Drummond offered a 4.75 percent pay increase to workers in the first year. A strike would cost the government between 2 and 3 billion pesos ($1.1 million to $1.6 million) a day in lost royalties, according to Mining Ministry estimates, and could act as a drag on the government’s attempt to reverse a slowdown in growth. Coal is Colombia’s biggest export after oil.

The company didn’t immediately reply to an e-mail seeking comment today. Workers rejected the latest offer because “it’s not enough,” Union official Alberto Solano said yesterday. “They need to address education and health benefits.”

In 2012 Drummond produced 26 million metric tons of coal, according to the National Mining Agency, making it the second-largest producer after the Cerrejon mine, owned by BHP Billiton Plc (BLT), Xstrata Plc (GLEN) and Anglo American Plc. (AAL)

Wage talks between the union, company and Colombia’s Labor ministry failed yesterday, after the union postponed a strike from July 22. The union represents about 3,000 of Drummond’s 5,000 direct employees, with non-affiliated and contract workers also downing tools, Flores said.

To contact the reporter on this story: Andrew Willis in Bogota at awillis21@bloomberg.net

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

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