Difficult times for Carrejón’s Colombia coal output

Coal miner Carrejón’s Colombia coal production fell almost 5% in 2013 to 33 million t, according to the company. In 2012, coal production was 34.6 million t and the company blamed difficult operating conditions for the fall in output.

With an estimated resource base of almost 5000 million t, and participation in Colombian exports at around 40%, Carrejón said that it expects coal production and exports to rise in 2014, though this will be dependent on coal prices. However, this goal will be likely made more achievable thanks to a pay deal reached with workers in February 2013, which will lower the likelihood of labour disputes.

Worker unrest and FARC attacks

Carrejón has felt the negative effects of worker unrest, subdued coal prices and also the cost of falling foul of some of Colombia’s militant organisations, such as the Fuerzas Armadas Revolucionarias de Colombia (FARC).

“On top of a consistent fall in coal prices in the last three years, came the 32-day strike and an increasing number of terrorist attacks on the railway line,” Carrejón said in a press release.

FARC attacks have become common, with explosives planted on railway lines in January and March 2013. The revolutionary group has been involved in a five-decade war against the Colombian Government. While classified as a terrorist organization by the US, European Union, Colombia, Canada, Chile and New Zealand, the FARC has been recognized as a legitimate group by Venezuela, Brazil, Argentina, Ecuador and Nicaragua.

Despite the attacks however, Carrejón’s “aggressive” contingency plan has enabled the company to make up for exports that did not take place due to strike action or railway attacks.

Carrejón is strong position going forward

The company has used enclosed conveyor belt loading systems to fill ships at its port since the project began. These conveyor belt systems are now mandatory according to Colombian law, and by not using the recently banned crane-and-barge method, the company has avoided the disruption now faced by Colombia’s second-largest coal miner, US-based Drummond Co.

Colombia is the world’s fourth-largest exporter of coal, with most of the country’s coal exports bound for European markets.

Carrejón is a joint venture between Anglo American, BHP Billiton and Glencore Xstrata, with an integrated project in Colombia comprising of a mine in the northern province of La Guajira, its own railway and its own port. The company is currently looking to expand its operations, and will seek the necessary licenses required to grow its business “as far as market conditions permit.”

Environmental regulations

In order to keep in line with environmental requirements, the company recently announced it would voluntarily restrain operations in southern areas during the summer, by increasing the number of impact sprinklers and fog cannons in operation at its operations in order to keep dust levels within the regulation limit. The company has also said in a statement that it has decided to leave some equipment out of operation, which in turn means some fixed-term job contracts will not be extended.

Looking ahead to the future, Carrejón said it was “confident this difficult environment will improve and that it will achieve greater efficiency in its operations.”

Edited from various sources by Sam Dodson

Read the article online at: https://www.worldcoal.com/coal/14012014/carrej%C3%B3n_colombia_call_output_falls_401/