Colombia court rules strike at country's main coal railway illegal

BOGOTA (Reuters) - A Colombian court declared a strike at the country's main coal railway illegal on Tuesday, dealing a blow to the union's action for higher salaries, and giving the privately held railway operator the ability to fire workers who walked off the job three weeks ago, officials said.

The 23-day strike by workers at the railway operated by Fenoco has shut off more than 50 percent of coal exports from Colombia, the world's No.4 coal exporter, causing major coal producers to declare limited force majeure and cutting the country's exports by an estimated 4 million tonnes this year.

The dispute has pushed up prices despite the availability of coal in the Atlantic and Pacific markets, although the shortfall from Colombia has yet to be strongly felt, utilities and traders said.

The decision by the Bogota-based court strengthened Fenoco's position in talks with union workers seeking to negotiate higher salaries.

"We won. The decision was unanimous. The strike was declared illegal," Fenoco President Peter Burrowes told Reuters by telephone, walking out of the court after hours of discussions.

The union vowed to appeal the ruling. A decision on the appeal will likely be months away.

Felix Herrera, president of the Sintraime union, told Reuters that union leaders would meet on Wednesday to decide how to move forward after the court ruling.

On Monday, more than 50 percent of rail workers voted to end the walkout, but the union called the vote illegal and vowed to continue the strike. In a statement in local media, the company said workers should return to their jobs on Thursday.

"It was a double whammy. We got the vote yesterday and the court decision today," Burrowes said.

In 2009, striking Fenoco workers held up exports for 27 days -- the walkout was later declared illegal.

Fenoco's shareholders include Glencore International Plc's Prodeco unit, Drummond International and Goldman Sachs Group Inc's Colombian units.

The labor dispute has brought coal exports from the main producing province of Cesar to a halt and cost the government more than $1.2 million per day in royalties.

The tonnage lost as a result of the Fenoco strike and a separate dispute at Prodeco's mines may have a greater impact on prices in two to three months' time when end-users return to the market for Q4 cargoes, but at present there is still more coal available than there are buyers, traders and utilities said.

Colombia's coal industry is dominated by big thermal producers with their own port and rail facilities such as Glencore, Drummond and Cerrejon, which is owned equally by BHP Billiton Ltd, Anglo American Plc and Xstrata Plc.

The Andean country has seen record foreign investment, mainly into the oil and mining sectors, pushing coal output to historic highs over the last decade after a U.S.-backed military offensive drove rebels into remote jungle and mountain hideouts.

(Reporting by Jack Kimball; Editing by Chris Lewis)

Source: http://news.yahoo.com/colombia-court-rules-strike-countrys-main-coal-railway-041209011--sector.html

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