Cerrejon posts steep 1H coal losses

Colombian coal producer Cerrejon faces an unprecedented crisis because of low prices, plummeting demand and restricted access to proven reserves because of legal rulings, the company said today.

Cerrejon reported losses of 368bn Colombian pesos ($100mn) in the first half of the year, as its exports fell by 3.8mn t on the year to an 18-year low of 9.5mn t.

The firm's first-half losses were greater than the Ps72.5bn consolidated loss it posted in the whole of 2019, as average coal prices in January-June were 26pc lower than a year earlier, Cerrejon said.

The company is making a series of changes to streamline its business, including reducing its workforce and changing worker shift patterns.

Cerrejon also said it had submitted an improved offer to its largest union, Sintracarbon. This includes an 89pc subsidy for the cost of its prepaid medicine plan, university aid of more than Ps11mn per semester for worker's children and access to home loans at below-market rates. Workers will also receive a bonus of Ps5.5mn for signing the two-year labour agreement.

Sintracarbon union workers have until 20 August to vote on potential strike action.

By Diana Delgado