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Fenoco strike costing Colombia

AFTER a near month-long rail strike in Colombia crippled its export business, deputy mining minis...

Donna Schmidt

Medina told a Cartegena media conference that the 25-day stoppage by arterial railway Fenoco had been part of the South American country’s move to drop its output goal projections for 2012 by about 4% to 93 million tonnes.

Its previous target was 97 million tonnes.

Colombia produced 85.8 million tonnes in 2011, which had been a historic high that stemmed largely from more favorable conditions for production and outside investments.

“There's going to be a very good increase, but not what was planned due specifically to the stoppages that happened in Drummond, Prodeco and Fenoco,” he said, referring to the strikes and rebel attacks that have impacted Colombia’s industry as of late.

“That's going to reduce output."

He said the other impact on its whole-year numbers had been metallurgical coal prices.

“[Met’s] been low and that is affecting coal production in the country," Medina said.

Fenoco, which restarted work after taking its union workers to court, is a rail transporter for Drummond as well as Goldman Sachs affiliates and Glencore International's Prodeco unit.

Another strike at Prodeco's La Jagua mine earlier this year is still ongoing and entering its third month.

The company and the union have hit an impasse in discussions and are awaiting labor ministry officials to request an arbitration tribunal.

Colombia is the world’s fourth-largest coal exporter.

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