Coal in the Caribbean:  Mining Firm in Hot Water

Coal_in_the_Caribbean__Mining_Firm_in_Hot_Water

The Colombian government has called Alabama-based Drummond Co. one of the country’s biggest polluters. WSJ’s Sara Schaefer Muñoz (Wall Street Journal) explains why in her article “Drummond and Colombia Both Suffer in Clash.” Among the many problems are the company’s apparent collaboration with paramilitary groups (“illegal, right-wing militias known for human-rights abuses”) and the need to relocate towns because of the air pollution near its mines. Read excerpts here and make sure not to miss the full Wall Street Journal article and video report in the links below:

Drummond Co. came to this hot, flat corner of Colombia two decades ago and, despite civil unrest and clashes with authorities, has kept coal flowing from the company’s two large mines. But the Alabama-based company’s exports came to a halt here last month, when the government shut them down because Drummond took too long to install a loading system to prevent coal from spilling into the Caribbean port of Santa Marta, about 125 miles from here.

The sanction is a blow to Drummond as well as Colombia, where the company employs nearly 10,000 workers and pays about $6 million a day in taxes, royalties and payrolls. The halt order shows that the usually business-friendly government of President Juan Manuel Santos, who is running for re-election in May, increasingly is responding to public pressure regarding perceived abuses by foreign companies.

“When people see that a company is constantly breaking the law, you need to set an example,” says Environment Minister Luz Helena Sarmiento. “This is a country that welcomes investment, but you have to obey the law.”

[. . .] Colombia is the fourth-largest exporter of steam coal in the world, according to the World Coal Association industry group. Coal accounted for $5.9 billion of the country’s $53.5 billion in exports from January to November, according to the government. Closely held Drummond declines to disclose its financial results but said it exported 22.8 million metric tons of Colombian coal last year. It goes mostly to Europe. That would be 27% of the country’s total, according to the mining ministry.

Drummond came to Colombia in the early 1990s. Headed by Garry Drummond, a son of the company’s founder, the company operates two mines in the state of Cesar. The mines are a four-hour drive from Santa Marta.

[. . .] Drummond has fought lawsuits that it collaborated with paramilitary groups—illegal, right-wing militias known for human-rights abuses. A Drummond contractor was sentenced last year to 38 years in prison for the murder of two union activists in 2001. Drummond has strongly denied its involvement or responsibility for the crimes. Drummond also has been ordered to relocate towns because of air pollution near its mines and was fined $3.6 million for dumping coal into the Caribbean last year.

For full article, see http://online.wsj.com/news/articles/SB10001424052702304851104579363322390004550

See Wall Street Journal report at http://live.wsj.com/video/coal-in-the-caribbean-mining-firm-in-hot-water/F1697A3A-8C15-498F-BFC6-DAB36E69B901.html?KEYWORDS=Caribbean#!F1697A3A-8C15-498F-BFC6-DAB36E69B901

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