The Colombian government has lowered its projections for coal production this year as a labor strike and environmental problems are hurting output at one of the world’s top coal exporters.
(Dow Jones) Javier Garcia, a director at the Ministry of Mining, said Thursday that Colombia’s coal output target for 2013 now stands at 94 million metric tons, below the government’s initial estimate of 97 million tons.
The Colombian government in recent years has been forced to reduce its coal production targets. Initially the administration of President Juan Manuel Santos, who took office in 2010, projected that coal output in 2013 would reach 110 million metric tons and in 2014 output would stand at 114 million metric tons.
But a series of labor strikes have led to a decline output. Additionally, some of the country’s largest producers have faced delays in receiving the necessary environmental permits to expand production.
Mr. Garcia said that a month long strike in February at Cerrejon, the country’s largest coal producer, was one key factor behind the lower projections.
Cerrejon, which is equally owned by mining giants Xstrata PLC (XTA.LN), Anglo American PLC (AAUKY, AAL.LN) and BHP Billiton Ltd. (BHP, BHP.AU), produced 34.3 million metric tons of coal in 2012. Cerrejon is investing $1.3 billion to increase output to 40 million tons a year by 2015.
Also, Drummond Co., one of the largest coal producers in the country, was also forced to temporarily halt production when its seaport license was suspended after it allegedly dumped a large amount of coal into the sea during a boating accident.
Several economists have pointed out that the halt in the country’s coal exports could impact Colombia’s economic growth for this year, which the central bank estimates at roughly 4%.