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Colombian coal rail strike in limbo

THE QUESTION of whether a railroad strike called nearly three weeks ago in Colombia is legal will...

Donna Schmidt

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According to a Reuters report, the strike – which was 18 days old on Friday and initially brought by the Fenoco railway and Sintraime union – was to be heard by a court on Monday.

However, the decision was moved to Tuesday afternoon because the court and lawyers did not make progress with a ruling in a Friday night meeting.

Fenoco was reportedly asking its workers to vote Monday to end the strike and send the issue to an arbitration committee. The union, however, has questioned the legality of that vote on the grounds that only it has the authority to end the strike.

The strike first started over pay and working conditions, but as it has deepened over the weeks of the stoppage coal prices have begun to rise.

Parties in the talks have come to an impasse and both are calling the other inflexible.

More than half of the country’s export coal has been held up, prompting the price increases and forcing Colombian operators Drummond and Prodeco to declare limited force majeure on contract shipments.

Fenoco, Colombia’s largest coal railroad, carries coal for shareholders including US-based miner Drummond International, Glencore's Prodeco unit and a Goldman Sachs affiliate. To date, it has carried about 1.5 million tonnes of export coal from those complexes.

Daily port supply is about 160,000 tonnes, and the railway has a capacity of about 42 million tonnes.

Prodeco is also in the midst of a strike at its La Jagua mine in the Cesar province; workers there are protesting pay and working conditions.

An official told Reuters last week that the Andean nation was losing more than $1 million in royalties for every day the strike continued.

Colombian coal buyers reportedly said that, should the strike extend through the end of the month, as much as 4 million tonnes could be taken from the country’s supply this year, tonnage that will not be able to be recovered.

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