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Colombian railway up and running again

THE largest coal rail transport system in Colombia is once again rolling after workers reportedly...

Donna Schmidt

Ferrocarriles del Norte de Colombia SA, or Fenoco, president Peter Burrowes told Bloomberg that the trains started up that day for the first time since July 23.

He added that its crews would increase cargoes from the about 145,000 to 150,000 tons daily shipped before the strike to about 165,000t each day to help bring down stockpiles amassed at the complexes of its clients Glencore International, Drummond and Goldman Sachs.

“They’re carrying a lot of coal,” he told the news service.

Workers walked off the job for 25 days to protest their pay scale as production had risen in the Andean nation year-on-year from nearly 86 million metric tonnes to nearly 100Mt.

Another strike in Colombia, however, continues to drag on.

Workers at Glencore’s Prodeco Group first suspended production at the La Jagua mine on July 19. Union leader Ricardo Machado told the news service no talks were scheduled.

Glencore’s La Jagua and neighboring Calenturitas mines produce 14.5Mt annually.

A court date of August 27 has been set to rule on whether the strike is legal.

Barclays Capital coal trading director Karim Kanji in London told Bloomberg that the end of the strike had reduced prices, which had extended a decline to date this year on weakened European demand and an increase in US exporting.

Coal for 2013 delivery in northwestern Europe dropped 3.2% last week as many anticipated the end of the rail walkout, and over the past six months the price has fallen 13%.

US-based producer Drummond, which reportedly issued a force majeure on its shipments during the strike, confirmed last week it would reduce its production because it had filled its storage facilities.

Fenoco has projected transporting as much as 52Mt in 2012, up from 40 Mt last year.

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