Coal news and updates

Colombia suspends coal loading by Drummond

January 13: In a sudden twist in events, the Colombian government suspended coal loading by Drummond late last week, thereby putting pressure on the US-based miner to immediately comply with the new regulations put in place for port operations.

According to information available with ICMW, the sudden measure may impact coal shipments by the miner for at least the next three months.

The decision took the market by surprise as the Colombian authorities had earlier announced they would not suspend coal loading by Drummond but fine the miner for failing to install the direct loading system as required under the new regulations.

Coal prices in international markets, particularly in South Africa, saw a sudden increase following the development.

The new regulations which came into effect from January 1, 2014 require Colombian coal exporters to use environment-friendly conveyor belting systems (and abandon the polluting method of using barges and cranes) for loading of coal in the vessels. However, Drummond had said it would not be able to put necessary infrastructure in place until March 2014.

Commenting on the development, a market source said, "We were not expecting this. However, once the decision is taken, it has to be borne with. The impact on prices may show a spontaneous reaction, but since demand is slack, it should not persist."

Drummond accounts for about one-third of Colombia's coal production.