US big winner in Colombia’s coal industry troubles: report

Colombia, South America’s largest coal producer, risks losing access to its main markets as mounting issues affecting major coal miners in the country have started to disrupt supply, reports local newspaper Vanguardia.

Early this month, the nation’s environmental licensing agency ANLA suspended Alabama-based Drummond Co.’s loading license at the port of Santa Marta, after the company spilled coal in the Caribbean in January.

Shortly after, workers at Colombian coal giant Cerrejon, a consortium owned by BHP Billiton Ltd. (ASX: BHP)(LON: BHP)(NYSE: BHP), Xstrata Plc (LON:XTA) and Anglo American (LON:AAL), began a strike in Guajira, suspending all activities at its mine.

The Colombian Chamber of Mines president, Cesar Diaz, told the newspaper that the US is the only other country in the region that would likely be able to meet the demand for coal from current Colombian customers such as the Netherlands, Denmark and Israel.

According to mining analyst, Gabriel Bayonne, the US would benefit enormously from an extended disruption in Colombia’s coal exports, as gas has been replacing coal in power plants, causing an oversupply of the commodity.

He added that American companies such as Peabody Energy, Arch Coal, Cloud Peak Energy and Alpha Natural Resources LLC, would be the ones to gain the most, adding that Russia and South Africa could also take over some of Colombia’s coal destinations.

(Image by State Library of New South Wales collection


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