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Colombia Talks to Drummond and Miners in Bid to End Coal Strike

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Aug. 2 (Bloomberg) -- The Colombian government is holding talks with Drummond Co. and its striking workers in a bid to end a dispute that has halted output at the nation’s second-biggest coal producer.

Labor Ministry officials are trying to organize direct talks between the two sides later today in Santa Marta, on Colombia’s Caribbean coast, to broker a deal to end the 10-day strike by Drummond’s mine, rail and port workers.

“A deal in the next few days is possible,” union negotiator Humberto Suarez said in an interview in Santa Marta. Strikers could return to work as early as next week if the company agrees to pay workers a monthly salary rather than by the hour, Suarez said.

The company declined to comment in an e-mailed message.

Colombia, South America’s biggest supplier of coal, is losing roughly 1.6 billion pesos ($850,000) in royalties for every day that the strike continues, according the national mining agency. Workers are striking over pay, working conditions and health benefits, according to Sintramienergetica union.

Union members have set up camp near the entrance of Pribbenow mine in Cesar province, with about one hundred miners lying in hammocks or sitting at tables playing cards. In a makeshift kitchen, two women stir large mettle pots of food above a campfire, while a lay preacher delivers a sermon with the help of a microphone, mixing passages from the bible with calls for worker rights.

In 2012 Drummond produced 26 million metric tons of coal, according to the national mining agency, or roughly 29 percent of Colombia’s total output.

The strike, which started July 23, is the second major industrial dispute to hit the nation’s coal sector this year. Workers at Cerrejon, Colombia’s biggest coal mine owned by BHP Billiton Plc, Xstrata Plc and Anglo American Plc., went on strike for more than a month starting February 7 after failing to reach a wage agreement with management.

That strike, and Drummond’s 3-week loss of its loading license after a sinking barge dumped coal into the Caribbean, cut first quarter economic growth by half a percentage point, according to Finance Ministry estimates.

The central bank cited “paralysis” in coal mining in its decision to cut interest rates by a quarter point in February. Colombia has cut its policy rate by 2 percentage points over the last 13 months.

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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