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Colombia's Q1 coal production down 5% on-year, 2015 forecast cut

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Colombia's Q1 coal production down 5% on-year, 2015 forecast cut

London — Colombian coal output in the first quarter of 2015 fell 5% year-on-year to 23.2 million mt, due to the ongoing nighttime rail restriction on the Fenoco coal railway, the country's national mining agency (ANM) said late Friday.

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The agency said it now expected coal output in 2015 to be at least 87 million mt, well below the government's initial forecast of 97 million mt for the year.

The ANM said the production forecast could be ramped up if the Fenoco transport issues are resolved and if an environmental permit allows for an expansion project at main thermal coal miner Cerrejon to be completed.

"There are issues which go beyond our control, such as strikes, transport limitations, social conflicts, problems which even if we wanted, are not in our hands to settle, and are without a doubt affecting production," ANM president Natalia Gutierrez Jaramillo said in a statement.

The Fenoco rail line carries coal from Colombia's main thermal coal mines Drummond, Prodeco, and Colombian Natural Resources to coal export terminals on the Caribbean coast.

It was banned from transporting coal between 10:30pm and 4:30am to reduce noise pollution.

Fenoco is currently building noise mitigation barriers alongside the rail line in order to get the ruling revoked.

Drummond's Q1 coal output was 6.705 million mt, down 21.9% year-on-year, while production from Glencore-owned Prodeco rose 3.4% on the year to 5.38 million mt, according to ANM data.

Goldman Sachs affiliate Colombian Natural Resources produced 383,423 mt in Q1, up 164% year-on-year.

Cerrejon -- a joint venture of miners BHP Billiton, Glencore and Anglo American and not affected by the Fenoco rail ban -- produced 8.898 million mt in Q1 2015, up 1.5% from the same quarter last year.

Colombia produced 88.577 million mt of coal in 2014, according to the ANM.

--Jaime Concha,
--Edited by Jeremy Lovell,