Colombia’s coal output down 4% in 2013 due to strikes, rebel attacks

Colombia’s coal output down 4% in 2013 due to strikes, rebel attacks

Colombia, the world's fourth largest coal exporter, produced a total of 85.5 million tons of the mineral in 2013, a 4% year-on-year drop that took output below the 89 million target, due mainly to strikes at the country's top two miners —Drummond and Cerrejón— and logistics disruption by rebel attacks.

From the total, 94.3% was exported, according to the country’s National Mining Agency (ANM). Colombian coal shipments, said the organization, now account for 12% of the country's total exports, placing it second to oil, and overtaking the nation’s more well-known exports, such as coffee and bananas.

ANM also noted that mineral production jumped 18% (3.8 million tonnes) in the fourth quarter, compared with the same period in 2012, despite strikes affecting mines in the northern districts of La Guajira and Cesar.

$7bn mining investments stalled

For months, coal miners operating in Colombia have warned that new regulations paired with delays in environmental approvals have began to affect production and scare investors away.

According to the nation’s Large Scale Mining Association, there are about $7.3 billion of expected investments currently stalled. The body, which represents 13 of the country’s largest miners, such as Cerrejón, Cerro Matoso, AngloGold Ashanti (NYSE:AU) and Drummond, claims the recent sanctions against US mining giant Drummond, which saw its coal shipments frozen in early January for not complying with a new environmental law, are damaging Colombia’s embattled mining industry even further.

The production drop last year is costly for both private companies and the Colombian government, which counts on mining royalties and taxes calculated largely on the amount of coal produced.

Some of the world's top mining companies have operations in Colombia, including Anglo American (LON:AAL) and BHP Billiton (ASX:BHP), which jointly own Cerrejón, the country's largest coal producer.