BOGOTA, Oct 7 (Reuters) - Cerrejon, one of Colombia's
largest coal mines, will reduce its operations by up to 18%
because of a fall in international prices and amid an ongoing
court case, the company's chief executive said on Monday.
Colombia, the world's fourth-largest exporter of coal, faces
a potential spending crunch next year as royalties from the fuel
decline amid a supply glut and slowing economic growth in China.
Cerrejon, owned by BHP Group Ltd , Anglo
American Plc and Glencore, will have output of
just 26 million tonnes for the next five years, compared to the
more than 30 million it was regular producing until last year,
Chief Executive Guillermo Fonseca told local paper La Republica.
The mine's cash flow will de reduced by $170 million this
year, because of low prices and global moves toward renewable
energy, Fonseca told the newspaper.
"To adjust we're reformulating the operation of the mine,"
he said. "Accepting that prices are going to stay there, the
decision was taken to reduce the size of the mine."
"The mine will be reduced between 15% and 18% as a result of
what we're seeing," Fonseca added.
Cerrejon did not respond to a Reuters request for comment.
It is possible the mine will be shuttered this month by the
Council of State - Colombia's top administrative tribunal -
Fonseca added.
The court may order the closure while it deliberates a suit
brought by communities around the mine in northern La Guajira
province, who allege that Cerrejon has caused water shortages,
food scarcity and other environmental problems.
"If (the closure) happens while they decide, which could
take five or six years, the operation would not be worth it and
Cerrejon's history would end this year," Fonseca said, adding
the company's concession lasts until 2034.
(Reporting by Nelson Bocanegra
Writing by Julia Symmes Cobb; editing by David Evans)
Anglo American (AAL)
Glencore (GLEN)
