Coal news and updates

Mechanics at Colombia coal mines strike

Mechanics at Colombia's main coal mining companies, including Cerrejon and Drummond, went on strike over pay and conditions on Wednesday, a stoppage that will affect output if it continues long enough, a union leader told Reuters.

The roughly 3,500 employees at maintenance contractor Dimantec downed tools after rejecting a pay offer from the company, leaving mining companies at risk of having to scale down or halt operations if machinery cannot be kept running.

"The Dimantec workers are on strike since 6 a.m. today," said Felix Herrera, national president at the Sintraime union. He said that Dimantec has agreed to a meeting with employees that could take place later on Wednesday, though no time was set.

He could not estimate how quickly the strike would begin to affect coal mining in the world's fourth-biggest exporter, where open pit mines use large numbers of mechanical diggers and trucks. The strike would also affect conveyor-belt loaders at the ports.

Coal prices in Europe, for which Colombia is an important supplier, fell on Wednesday to $69.75 a tonne, close to five-year lows due to mild weather, which has reduced demand, and ample stocks.

Herrera said Dimantec mechanics work at Colombia's biggest miner, Cerrejon, a joint venture of Anglo American Plc, BHP Billiton and Glencore Xstrata Plc, and at sites operated by U.S.-based Drummond and Glencore.

Drummond's press office said the company would not comment on the situation and several calls from Reuters to Cerrejon went unanswered.

Herrera said employees are seeking pay increases but want all the money on the table to be paid as wages, rather receiving a bonus. That way, the employer would increase social security contributions for the workers.

"Dimantec has made an offer but it is below what workers want. If they can't fix the machines, the (mining) companies won't be able to work," he said.

Colombia's coal sector has faced recurrent disruptions since late 2012 with strikes at Cerrejon and Drummond that went on for weeks, plus a host of logistics problems this year and last that have hampered exports.

The government has forecast 2014 production of 89.1 million tonnes and says output totaled 24.5 million tonnes in the first quarter.

Source: Reuters