Colombia stands up to Big Coal

Colombia’s government is making a big show of prosecuting US coal producer Drummond for a series of environmental blunders. Why?

Juliana Alvarez/Reuters
Environment Minister Luz Helena Sarmiento (c.) speaks during a news conference in the Caribbean city of Santa Marta, on January 8. Colombia's government said on Wednesday it suspended loading of coal by its second-biggest coal miner, US-based Drummond, until it complies with new regulations governing movement of coal at the ports.

Colombia’s government is making a big show of prosecuting US coal producer Drummond for a series of environmental blunders, says our correspondent in Medellín. The case is reverberating all the way to Europe, where coal prices spiked on Jan. 9 when the government suspended Drummond’s shipping activities.

Some see the developments as a sign the government is taking a tougher environmental stance with dirty coal. Last month the environment minister also promised to bring forward legislation requiring environmental permits for mining exploration.

“This is one of the few times the Colombian government has put its foot down,” says our correspondent. “It’s a very significant.”

But the case is unlikely to presage any significant legal or environmental troubles ahead for Big Coal in the South American country, which is eager for the industry’s foreign direct investment, our correspondent adds. The spotlight may have more to do with Drummond’s shady history and President Juan Manuel Santos’s plans to stand for reelection in the May election.

“I’m skeptical if this represents real change,” says our correspondent. “Given the Colombian government’s relationship to the sector, I would be surprised if it continued to take a hard line.”

The government’s chief prosecutor announced last week that six Drummond employees will be charged with environmental damages for spilling some 200 metric tons of coal into the bay of Santa Marta in January 2013, for which the company was already fined $3.6 million. The incident was exposed by a Colombian photojournalist, which only increased the story’s media appeal.

On top of that, last month the government hit Drummond with $100 million in allegedly unpaid back taxes and also ordered the Alabama-based company to suspend all coal-loading operations until it upgraded its facilities to meet new environmental standards that kicked in Jan. 1....For the rest of the story, continue reading at our new business publication Monitor Frontier Markets.

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