Drummond Colombia strike more likely after talks yield nothin
US coal miner Drummond and a workers union in Colombia have achieved nothing making strike action at the country's No 2 coal producer increasingly likely.
A union leader said that unionized workers voted in favor of strike action on Wednesday after failing to reach an agreement with the company over pay and conditions but the sides held further talks on Thursday in an attempt to avert a walk out. Drummond employs around 10,000 in the country.
Mr Cesar Flores negotiator for the Sintramienergetica union said that "The negotiations didn't advance an inch. The company's position was the same. The union had still not ruled out further talks though none were scheduled.”
The negotiations are being closely watched by the coal market which risks output from Colombia falling by nearly one-third if Drummond's two mines and sea port are halted. With traders preparing to purchase stocks ahead of winter, relatively plentiful supplies on the market now could tighten in a prolonged stoppage, potentially pushing up prices.
A strike would also be a major headache for the government as it tries to stoke economic growth that was sluggish in the first half of the year, hit by a month long strike in February at rival miner Cerrejon, JV between Anglo American Plc, BHP Billiton Limited and Xstrata Plc.
Old Ben would love to see that happen. Drummond supplies 40 million tons of Met to the US each year. All these mines have to use a rail to the port about 125 miles through tunnels and bridges. If the FRAC would take out one tunnel we would not see any coal from Colombia for a year.
Rival Cerrejon was on strike for a month and during this time Drummond could not ship coal because of a accident with a barge which dumped coal into the bay. During the Cerrejon strike the FRAC rebels were very active . Several trucks and equipment were blown up along with the railroad.
I hate to say it but these coal mines in Colombia should be nationalised. Their human rights record is below what you will find in Africa. People have been killed by death squads and the people have been forced off of their lands . This is no way to treat people and Ben believes it will blow up in their faces some day. Many years ago Alpha became a partner in a south american coal mine. Their partner was not able to claim title to their mines because of corruption in that government. In the end Alpha had to walk away from their investment and their partner was bought out by a larger company.
Just like investing in Africa there is a lesson to be learned investing in South America. Any time these governments want to they can pull the rug out from under you. It is one thing to have good stewardship with the people who work and the country you have the mine with. It is another thing when you have the union leaders killed who are the voice of the people and you support dictators or leaders who are crooks . Just Ben`s two cents.