In H1 CY20 (Jan-Jun), Colombia’s biggest coal miner, Cerrejon mine owned equally by BHP Group, Anglo American and Glencore recorded an export sales of 9.5 mn t against 13.3 mn t in H1 CY19.
—The export sales are lowest in 18 years and this plunge is being attributed to slump in coal demand, legal rulings, and COVID-19 crisis.
—In reference to this, the company said in a statement that its H1 result is a consequence of the reduction in demand for coal, the lack of access to more profitable reserves like La Puente because of different judicial decisions and the crisis created by COVID-19, which has taken the company to an unprecedented situation.
—It also added that coal prices fell 26% in the first half compared with the first six months of 2019, resulting in company’s losses at USD 97.7 million.
Cerrejon’s largest union votes to strike
Amid the ongoing contract dispute between Cerrejon and its largest union, Sintacarbon, the latter’s members have voted overwhelmingly in support of strike action.
Sintracarbon had demanded a 6% salary increase in addition to health, education and housing benefits. However, Cerrejon offered an increase equal to inflation for 2020 and 2021. Colombia had 3.8% in 2019 and the Central bank expects inflation to end this year between 1% and 2%.
Sintracarbon now has 10 working days to begin the strike. The last strike at Cerrejon in February 2013 lasted 32 days. Cerrejon employs more than 5,500 workers, including 4,600 union members. This strike would bring mining operations to a halt impacting country’s exports.
Amid the ongoing situation, other miners such as Prodeco and CNR have also suspended their operations in response to low seaborne prices and narrow margins due to COVID-19 outbreak.
Market experts already expect Colombian thermal coal exports to fall by 8-20mn t on the year in 2020, while the mining association predicts total Colombian coal output to hit a decade-low.
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