Glencore’s Cerrejon shutdown deepens pressure on Colombia coal

Glencore’s (LON: GLEN) Cerrejon mine in Colombia, one of the world’s largest open-pit coal mines, suspended mining, rail and port operations in La Guajira province earlier this week after a community blockade cut off coal shipments and fuel supplies, highlighting growing pressures on one of the country’s largest exporters.

Cerrejon declared force majeure on June 1 after protesters blocked its railway line to Puerto Bolívar, preventing the delivery of essential goods and halting coal transport. The company suspended most employment contracts while retaining workers needed for maintenance, environmental controls and other critical functions.

“We reiterate our call for constructive dialogue to bring an end to these actions, which not only affect Cerrejón’s operations but also generate negative impacts on employment, regional development, and the economic stability of La Guajira and Colombia,” the company said.

The shutdown underscores the challenges facing Colombia’s coal industry, which is grappling with declining output, community opposition, regulatory uncertainty and weakening competitiveness despite continuing global demand for thermal coal.

Community demands

The blockade began May 23 and remains in place. Community leaders are demanding compliance with constitutional rulings on collective rights and prior consultation, expanded access to water, renewable energy industrialization projects, participation in energy initiatives and new mechanisms for redistributing royalties.

Cerrejón said many of the requests fall outside its responsibilities or have already been addressed through previous consultations and legal processes.

The breadth of the demands suggests the dispute extends beyond the mine itself and reflects wider tensions over development, public services and governance in La Guajira, one of Colombia’s poorest regions.

Years of disruption

The latest shutdown follows a series of disruptions that have increasingly weighed on the operation.

Cerrejón said it has faced nearly 80 blockades this year, most of them linked to protests against government authorities over the lack of basic services in nearby communities rather than disputes with the company. The miner recorded 333 blockades in 2024, equivalent to 135 days of interrupted operations. Last year it reported 201 blockades and nine terrorist attacks that disrupted coal transport for 95 days.

The company has also been navigating uncertainty surrounding a temporary 1% export tax and weakening coal markets. Cerrejón produced 16.8 million tonnes of coal in 2025, down 12% from the previous year. It also announced plans to reduce annual production by between 5 million and 10 million tonnes in response to oversupply in the Atlantic thermal coal market.

The broader sector is facing similar headwinds. Colombia’s coal production fell to 53.9 million tonnes in 2025, the lowest level in two decades, according to the National Federation of Coal Producers.

“While the world secures its energy with coal, Colombia is losing competitiveness and giving up market share,” Fenalcarbón president Carlos Cante said. “Internal factors such as the tax burden, logistics costs, and regulatory uncertainty are slowing production and investment.”

Political backdrop

The suspension comes as investors are increasingly betting on a political shift in Colombia following Sunday’s presidential election.

The peso recorded its strongest daily gain in four years while bonds and stocks rallied after right-wing outsider Abelardo de la Espriella unexpectedly won the first round of voting and emerged as the favourite heading into a June 21 runoff against leftist Ivan Cepeda.

Colombia’s 2054 dollar bonds rose more than four cents on the dollar, the peso gained 3.6% against the U.S. dollar and the benchmark stock index climbed as much as 7.1%. State-owned oil producer Ecopetrol surged nearly 10% intraday on expectations a new administration could support resource development and reverse some of President Gustavo Petro’s energy policies.

De la Espriella, who captured 43.7% of the vote, has pledged to cut taxes, restrain public spending and support business investment. Cepeda, an ally of Petro who won 40.9%, has advocated expanded social spending and opposed measures such as fracking and new oil exploration.

For miners, however, election optimism may not immediately solve the operational challenges on the ground. Cerrejón’s shutdown illustrates how community disputes, infrastructure disruptions and regulatory uncertainty continue to threaten production in one of Latin America’s most important coal-producing regions.

The company and local communities remain far apart on many of the issues driving the blockade. Even if the dispute is resolved quickly, recurring interruptions could continue to weigh on output and investment decisions across Colombia’s mining sector.