03 Dec 2020

Colombia’s Coal Output Halves in Third Quarter

03 Dec 2020  by Diana Delgado   

Colombia's coal production fell by 47.4pc on the year during the third quarter, hit by suspended output at mines owned by Glencore subsidiary Prodeco and Colombian Natural Resources (CNR), as well as strike action at Cerrejon.

Colombia, the world's fourth-largest coal exporter, produced 11mn t of steam, coking coal and metallurgic coke during the third quarter, down from 20.8mn t in the same period last year, but 12.8pc higher than the 9.7mn t produced during the second quarter, figures from the mines ministry show.

The government imposed restrictions to try to control the spread of Covid-19 in late March. The country's major coal producers closed operations early on in the pandemic even though the country had exempted coal mining from restrictions.

Cerrejon, which had halted operations for two weeks at the start of the pandemic, was forced to close again on 31 August when members of the Sintracarbon union went on strike. The 91-day work stoppage was lifted on 1 December.

Cerrejon produced 2.1mn t in July-September, a sharp drop from the 6.2mn t produced in the same period last year, but higher than the 1.9mn t produced in the second quarter.

The La Guajira province, home to Cerrejon, produced 2.2mn t during the third quarter, down from 6.4mn t in the same period last year.

Prodeco did not produce any coal during the third quarter, compared with 4.1mn t in the same period last year. Prodeco's mines have been closed since late March.

CNR, the local unit of US-based Murray Energy, produced 420,000t in July-September, half the 825,000t produced in the third quarter of 2019.

CNR restarted operations in late April but then ceased production again on 31 July amid lower demand caused by Covid-19 and price weakness in the seaborne market.

Coal production at Drummond, the country's largest coal mining firm, fell by 12pc to 7.3mn t.

Coal production from the Cesar province, home to Prodeco, Drummond and CNR, fell by 41.4pc to 7.8mn t.

Rainfall risk

More recently, torrential rains in Caribbean provinces are posing another risk to coal production. Drummond told Argus last week that excessively wet weather has limited its spot coal availability, but that it expects to meet its 2020 export target.

Hurricane Iota dumped a large amount of rain on the town of Uribia, near Cerrejon, which could complicate a return to operations if workers end their strike.

Mining agency ANM projected last month that 2020 Colombian production will be 39pc lower than in 2019. The agency projected that mines in the country would produce 50mn t of thermal and coking coal and metallurgic coke in a worst-case scenario and that output could reach 56mn t if the strike at Cerrejon is lifted.

Aggregate coal production between January and September was 40.2mn t, down from 60.4mn during the same period last year, government figures show.

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