BOGOTA, Feb 17 (Reuters) – Cerrejon, one of Colombia’s main coal producers, and its largest union have extended negotiations which started at the end of January by a further 20 days, the parties said on Monday.

Cerrejon, which is equally owned by BHP Group, Anglo American, and Glencore, exported 26.3 million tonnes of coal in 2019 and has nearly 5,900 employees, of which 4,600 are union members

The talks, which started last month, seek to reach an agreement with workers ahead of the expiration of their current contract this month.

The initial negotiation period concluded on Saturday, with both groups agreeing to extend talks until March 6. If there is no agreement following this next phase of negotiations, the union will call on members to vote between going on strike or seeking arbitration.

Union Sintracarbon said the company offered a pay increase of 3.8%, equal to inflation in 2019, and accused it of trying to freeze workers’ salary and benefits for two years.

“Cerrejon is trying to lower working conditions, reduce the well-being of workers’ families and avoid responsibility for the health, environment and life of communities in La Guajira ,” Sintracarbon said in a statement.

The union is demanding a pay rise of 7.80%, 4% higher than last year’s inflation, as well as living, health and education benefits. Cerrejon is also holding separate talks with Sintracerrejon, a smaller union.

“We offered a deal to Sintracarbon which is aligned with the reality of the business and looks to reach an agreement which will continue to bring benefits to workers and their families, while also ensuring the sustainability and competitiveness of the business,” Cerrejon told Reuters in a message via Whatsapp.

Thermal coal prices have fallen approximately 40% in the last year to around $44 a tonne.

Colombia is the fifth-largest coal producer in the world. The fuel is the Andean country’s second top source of foreign exchange after oil.

Cerrejon, located in La Guajira province, also controls a 150-kilometer (90-mile) rail line and a seaport that receives ships which can carry up to 180,000 tonnes of cargo. (Reporting by Luis Jaime Acosta Writing by Oliver Griffin Editing by Marguerita Choy)

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