VZCZCXYZ0007
RR RUEHWEB

DE RUEHBO #0689 0312154
ZNR UUUUU ZZH
R 312154Z JAN 07
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 2369
INFO RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC

UNCLAS BOGOTA 000689 

SIPDIS 

SIPDIS 

E.O. 12958: N/A 
TAGS: ENRG EMIN EINV ELAB CO
SUBJECT: CERREJON COAL COMPANY SETTLES LABOR DISPUTE 
WITHOUT THE DRUMMOND DRAMA 

REF: 06 BOGOTA 5395 

¶1. (U) On January 29, Cerrejon Mines (owned by a consortium 
of UK and Canadian companies) settled biannual labor talks, 
averting a strike which would have affected delivery of 
nearly 500,000 tons per month of coal to the U.S.  The 
workers' union at Cerrejon, SINTRAMINENEGETICA, was the same 
union that struck at the Drummond mine for six weeks in 2006 
(reftel).  According to a senior Cerrejon executive, the 
labor negotiations were "amiable" in spite of the union's 
vote in early January to authorize a strike.  The executive 
added that Cerrejon viewed the strike vote as "posturing", 
and that the company was never concerned over a potential 
work stoppage. Labor union sources also reported that the 
negotiations were positive and without the animosity that 
they experienced with Drummond. 

¶2. (U) Cerrejon negotiators were able to quickly resolve 
labor/management issues, allowing more space for negotiators 
to close on wage differences.  Cerrejon workers will receive 
a 7.7 percent wage increase during the first year of the two 
year contract, and a 6.0 percent raise during the final year. 
 In comparison, Drummond workers received an 8 percent raise 
the first year and 1.5 percent above inflation (inflation was 
4.48 percent in 2006) the second year.Cerrejon is the second 
largest Colombian coal exporter, delivering approximately 5.5 
million tons of steam coal a year to the southeastern U.S.. 
Drummond is the leading exporter of steam coal to the U.S. at 
14.1 million tons. 

¶4. (SBU) Comment- Unlike Drummond, Cerrejon was able to avoid 
a strike with SINTRAIENERGETICA by adequately dealing with 
labor management issues such as termination without cause and 
increased social benefit packages. It should be remembered, 
however the Drummond strike occurred in the midst of 
Colombia's national election campaign which seemed to 
influence both labor and management's hard line.  Drummond's 
hard line in negotiations with the union, in spite of a six 
week strike, likely set a baseline for wage concessions that 
was more easily met by Cerrejon.  End Comment. 






WOOD 

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