Drummond says Colombia mines, port to reopen after government ends strike

The Colombian operations of U.S.-based coal miner Drummond will reopen on Saturday evening, the company said, after the government intervened to end more than seven weeks of strike action that shut down its two mines and port.

The stoppage halted about one-third of production by the world's No. 4 coal exporter and was the second major strike in Colombia's coal sector this year, cutting royalty revenues for the government and crimping economic growth.

"We should be returning to normality of work from the night shift of today, September 14th," the company said in a statement, listing the different groups of workers that would cover various shifts in the coming days.

On Friday, Colombia's Labor Ministry said it was sending the case to an arbitration tribunal after the majority of the company's 5,000 direct, non-contract employees voted to resolve the dispute that way.

No one at the Sintramienergetica union, which organized the strike, answered calls to confirm members were returning to their jobs. On Friday night, a union negotiator, Cesar Flores, said no official notification had been received from the government that it was ending the strike.

The strike added to disruption in an already turbulent year for Colombia's coal sector, with a month-long strike at its biggest miner, Cerrejon, in February and logistics problems that had affected rail transport and the loading of ships.

The Drummond stoppage has had little impact on coal prices however, with the global market well-supplied, a factor that has weighed on prices for most of this year. Coal for delivery to Europe (ARA) traded at $78 a tonne on Friday.

Drummond exported 26 million tonnes of coal in 2012, about one-third of the national total. It had been expected to produce 32 million tonnes out of some 94 million tonnes of forecast national output in 2013, which would earn the nation about 900 billion pesos ($480 million) in royalties, the government has said, up from 700 billion pesos last year.

Those targets are likely to be jeopardized after two prolonged stoppages in a sector that accounts for about 2.4 percent of the Andean nation's gross domestic product.

The strike immediately shut down Drummond's exports since it included workers at its privately operated port as well as laborers at its two mines, Pribbenow and El Descanso, in the north of the country.

Workers represented by the Sintramienergetica union are demanding a pay increase above the 5 percent Drummond has offered, a fixed monthly salary instead of hourly pay and new jobs for 400 port workers who are to be made redundant next January with the introduction of direct conveyor-belt loading of ships.

In a proposed three-year pay deal posted on its website, Drummond said it was also offering workers a one-time 8.5 million peso ($4,400) bonus on signing the agreement.