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Wed Feb 20, 2013 9:29am EST
* Nation's two main exporters unable to move coal * Drummond to reduce operations by three-quarters By Jack Kimball BOGOTA, Feb 20 (Reuters) - Colombia's second largest coal exporter Drummond International will scale down operations on Thursday as stocks reach maximum capacity after a loading suspension by the government shut down its ability to export. Colombia's top coal exporters, Cerrejon and Drummond, have been unable to move the material since early February - Cerrejon due to a strike and Drummond because of suspension after an incident at its port. In a statement to employees dated Feb. 19, Drummond said it will reduce the normal 24-hour operations by three-quarters starting on Thursday and has asked the labor ministry for permission to suspend some labor contracts. "Although the company keeps maximum levels of inventory at train loading stations, at the mine and the port yards of 3 million tonnes, the current levels are higher than 4.7 million tonnes," Drummond said. "Inventories at load stations are at peak levels and cannot receive more coal from mining operations. Additionally, we have more than 1 million tonnes in inventory at the pits that cannot be transported to loading stations." Colombia's environmental licensing body suspended loading at Drummond's port on Feb. 6, which will last until it reviews a revised contingency plan from the miner after an incident where bad weather forced a coal spill into the nearby waters. Drummond, which is an 80-20 joint venture with Japan's Itochu Corp., said that it had presented the plan on Feb. 15 and was waiting to hear back. The company expects coal output to rise to up to 31 million tonnes in 2013 from a lower-than-expected 26 million tonnes last year, according to an interview in local media in late 2012. Colombia's coal industry is dominated by big thermal producers with their own port and rail facilities such as Glencore, Drummond and Cerrejon, which is owned equally by BHP Billiton, Anglo American and Xstrata. Cerrejon's workers have been on strike since Feb. 7, the first time in two decades, forcing the company to declare force majeure on some cargos. Preliminary talks between unions and management stalled at the weekend, thwarting attempts to negotiate a deal on wages and benefits. As of late Tuesday, no new talks had been scheduled. The majority of Colombia's coal goes to United States and Europe, but the industry has increasingly looked to diversify into Latin America and Asia given planned shutdowns of coal-fire plants in its main destination points. Colombian coal exports fell 4.7 percent in 2012 to 77.4 million tonnes from 81.2 million tonnes in 2011 hit by labor disputes while the value dropped 7 percent to $7.8 billion, according to statistics agency data published on Monday.
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