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Colombian coal miner Cerrejon make revamped offer to union

London — Colombia's largest miner Cerrejon has presented a counter proposal to the main Sintracarbon union as part of a final attempt to resolve a long-standing dispute over pay and benefits.

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In a settlement proposal worth more than 5.2 million Pesos ($1.6 million), the miner has offered unionized workers new terms for wages and benefits, including a salary increase of 7.0% -- a marginal increase on the initial 6.77% offered -- which had been in line with inflation in Colombia in 2015.

Workers had initially been pushing for an increase of 10.1%.

The miner -- which produces 32 million mt/year of thermal coal -- will also pay a bonus of 3.6 million Pesos in the event of no strike action, the company said in a statement.

The company added Cerrejon will also advance the traditional quarterly bonus to 50% of the workforce and will increase the number of permanent contracts.

Wider education and health benefits for workers have also been outlined as part of Cerrejon's offer.

"The company is making a great effort, given the critical conditions [in the coal market], to maintain and increase significantly benefits for their employees. With this offer we hope to agree on a new collective labor agreement," it added.

Over a reported 95% of workers voted to strike March 4, but unions returned to the negotiating table during the 10-day period in which a strike must begin after the vote.

A spokesman from Cerrejon said there were now no restrictions on when workers could walk out, but added that negotiations between the two parties would likely take the full 10 days, meaning production would not be disrupted until March 14-15 at the earliest.

This latest proposal follows a 40-day period of direct negotiations that failed to resolve the issues between the two sides, which were mainly over wages.

As yet, there has been no response from unions.

Europe-delivered thermal coal prices have already responded to the prospect of industrial action, with several sources saying risk premiums were now built into April and May prices, making further increases in the event of strike action less likely.

The last strike at Cerrejon resulted in a 32-day outage at the mine. While several sources said a similar outage would have a limited effect on shipments into Europe, as there were so many other offers available in a climate of low demand, others felt that further price spikes could be possible in the coming weeks.

Cerrejon is a joint venture between Anglo American, BHP Billiton and Glencore and produced 33.2 million mt in 2015.

--Stephanie Wilson,
--Edited by Keiron Greenhalgh,