Colombia automation quandary

COLOMBIAN officials are seeking a way to permit the nation’s miners to continue exporting coal even if an upcoming deadline for mandated automated loading of tonnage is not met.
Colombia automation quandary Colombia automation quandary Colombia automation quandary Colombia automation quandary Colombia automation quandary


Donna Schmidt

The country’s mining ministry director told Reuters Wednesday afternoon that it was looking at a work-around solution to prevent exports dropping by at least one-third – much of it from large producer Drummond – on January 1, when the new outlines go into effect.

The law now orders all mining companies in the Andean nation to begin loading their ships using a suspended, fully-enclosed conveyor belt system. The line stretches out into the sea and drops tonnage right into vessels’ holds.

Under the current system, exporting is performed in two steps: crews load barges at the seaside docks, then those vessels sail to waiting ships where the coal is loaded using a floating crane.

Colombian officials have now banned the method due to pollution of the air and water.

Coal trade participants told Reuters that US-based producer Drummond will not completed the construction of its loading system in time for the deadline; in fact, it could be several weeks or months after deadline before the new method goes online due to a lengthy miners’ strike at the company in July.

Drummond has made no public comment on the report or the status of the project.

“What is for sure is that there are companies that won't manage to be up and running by this date and they will have difficulties that the government, as I understand, is looking at to see in what way this can be resolved,” ministry director for corporate mining Javier Garcia told the news service.

“Extending the deadline would imply modifying it with a law because there is no other way and I understand that [the government] is looking into by what means it could do this.”

One unnamed coal trade source told Reuters that Goldman Sachs’ export facilities also will not be ready, though it is one of the smaller miners in the country.

The potential delay adds insult to injury for Colombia’s coal mining sector. Earlier this week, Mines and Energy minister Amylkar Acosta told Dow Jones Newswires that Colombia’s total 2013 coal production would be about 85Mt, a drop from the 89Mt it produced last year, on worker strikes, rebel sabotage and other issues throughout this year.

The Andean nation’s most recent outlook projected a total 94Mt for whole-year 2013, though that estimation was closer to 110Mt at the beginning of this year.

Colombian coal shipments account for 12% of the country's total exports, according to national data. In addition to being South America’s largest coal producer, the country is also the fourth-largest coal exporter in the world.

Colombia’s biggest coal players are Cerrejon and US-based producer Drummond.