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Drummond Miners in Colombia Return to Work, Ending 53-Day Strike

Coal miners have returned to work at Drummond Co.’s Colombia operations, ending a 53-day strike and enabling coal exports to European power producers including Electricite de France SA to restart.

Work resumed at Drummond’s port and Pribbenow and El Descanso coal mines in northern Colombia late September 14, after a government statement a day earlier said an arbitration tribunal would resolve the long-running dispute over pay and work conditions.

“Workers have already returned,” Dorismel Caldera, an official with the main Sintramienergetica union said in a phone interview Sept. 15, adding that they may appeal the decision. “They have gone over our heads and violated the right to strike.”

Drummond Co. is Colombia’s No.2 coal miner, producing 26 million metric tons in 2012, about one third of the country’s total. Coal is Colombia’s main export after oil, with the government losing an estimated 1.6 billion pesos ($850,000) in royalties for each day of the strike, according to the national mining agency.

The dispute follows other disruptions in the Colombian coal industry this year, including a roughly monthlong strike at the country’s largest producer Cerrejon, joint-owned by BHP Billiton Ltd. (BHP), Anglo American Plc (AAL) and Glencore Xstrata Plc. (GLEN) The strike reduced first quarter economic growth by half a percentage point, according to Finance Ministry estimates.

A report by Bank of America Merrill Lynch this month said Colombian supply losses could amount to nearly 8 million metric tons this year, barring further disruptions. “Ample supplies elsewhere made up for the losses from Colombia,” the report said.

Union Demands

The Sintramienergetica union, which represents a majority of Drummond’s permanent employees in Colombia, rejected the company’s August offer of a 5 percent pay increase in the first year of a new agreement. The union is demanding a fixed monthly salary rather than the current system of hourly pay, plus the relocation of port workers who stand to lose their jobs with the introduction of direct loading next year.

Last week Colombia’s labor ministry said workers at Drummond must return to the company’s port and mines after a majority of workers voted to end the strike. Sintramienergetica told members not participate in the vote.

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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