Colombia Says Unprecedented Coal Interruption Will Slow EconomyAnatoly Kurmanaev
Colombia said a three-pronged interruption of its coal industry, South America’s largest, is curbing tax revenue and dimming growth prospects.
The shutdown of three of Colombia’s four largest mine complexes is affecting 79 percent of the country’s output and costing 192,000 metric tons of exports a day, Javier Garcia, head of corporate mining at the Mining and Energy Ministry, said in an interview from Bogota last night. Coal is Colombia’s second-biggest source of foreign revenue.
“The gravity of this crisis is unprecedented,” he said. “The consequences will certainly be felt in our gross domestic product.”
Colombia is losing 6 billion pesos ($3.3 million) of public revenues a day because of a strike at Cerrejon, partly owned by BHP Billiton Ltd, an export ban on Drummond Co. and the termination of the operating contract at the La Francia mine owned by Goldman Sachs Group Inc., Garcia said. The shutdowns, which began when Cerrejon workers downed tools Feb. 8 over pay, have caused 4 million tons of lost production, or 18 percent of the government’s quarterly output target, he said.
Cerrejon is losing about 95,000 tons of exports a day, said Juan Carlos Restrepo, the mine’s spokesman in Bogota. Drummond, based in Birmingham, Alabama, is losing about 80,000 tons based on last year’s figures, said Wilma Calderon, an external press representative in Bogota. Michael DuVally, a Goldman Sachs spokesman in New York, declined to comment.