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Strike action averted

World Coal,

A pay dispute between workers and management at Colombia’s key artery for coal exports, the Fenoco coal railway, appears to have been resolved. Coal railway workers have agreed to a pay rise offered by the company following 20 days of negotiations, which at times threatened to further impact Colombia’s already malingered coal export sector.

Marie Joachim, vice president for human resources and communication at Fenoco, said: "The agreement ends the [industrial action] in the sector that has left very high social and economic costs.”

A year of strikes

2013 has not been the best of years for the South American country. The government recently cut its coal export production targets for the year down by 4 million t. Colombia’s coal sector has been impacted by a series of strikes, which began with a month long strike by workers at the Cerrejon mining operations, then continued during the summer when mine and port workers at Drummond’s operations began industrial action that lasted almost three months from July to September.

Key coal artery

The agreement between Fenoco and labour unions, however, is good news for Colombia’s coal sector. The Fenoco railway transports about half of Colombia’s coal exports, with the possibility of strike action posing a significant threat to the country’s coal exports.

In 2012, Fenoco workers went on strike for 23 days, cutting coal exports by about half. With a poor road network, keeping the rail line open is crucial to the coal sector.

The 226 km railway passes through Cesar, a key coal mining province in Colombia, and runs to the Caribbean coast. It collects material from coal mines along its route.

Wage agreement

Fenoco has reached an agreement with the labour unions Sintravifer and Sintraime, Colombian newspapers have reported. Financial daily newspaper, Portafolio, said the company had signed a one-year collective agreement, which would include a 1.5% wage increase above the rate of inflation.

Colombian law stipulates that wage negotiations must run for 20 days before industrial action takes place. This number may be increased by a further 20 days if both sides so wish.

A sticking point in negotiations had been the wage increase, with Fenoco offering a raise equal to the inflation rate, while unions countered that such an increase had been standard for Fenoco employees for several years.

Annual inflation through August was 2.27%.

"Negotiations were difficult but we have reached an agreement," said Felix Herrera, president of Sintraime, which represents workers in the mining, metallurgy and rail sectors. The union represents about 350 of Fenoco's 630 direct employees.

Fenoco’s main shareholders are Goldman Sachs, Glencore Xstrata Plc, and US based Drummond International, with each company managing its own rolling stock.

Edited from various sources by Sam Dodson

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