Colombia’s Cerrejon LLC, the country’s largest coal exporter, signed a two-year labor agreement with union workers late Tuesday, putting an end to difficult negotiations that risked prompting a strike.
Under the agreement, union workers will receive a 6.5% salary increase this year and another pay raise of at least 5% in 2012, Cerrejon said in a statement. Union leaders and management had been deadlocked for weeks over the pay hikes, but the government’s intervention during a last-minute meeting on Friday apparently helped bring the sides closer to an agreement.
Union workers were demanding a pay increase of at least 7% while on Friday Cerrejon increased its offer to 6.5%. Over the weekend, Cerrejon workers decided to accept the 6.5% offer instead of striking.
Cerrejon, a joint venture equally controlled by mining company’s Xstrata PLC, Anglo American PLC and BHP Billiton, has not suffered a walk out in the last 20 years, the company said in a statement.
The agreement prevents a potential disruption in Colombia’s coal exports, which in 2010 reached 76 million tons. Cerrejon’s output in 2010 was 31.4 million tons of coal, representing about 41% of Colombia’s coal exports. The company produced around produced 90,000 tons of coal per day in January and is expected to produce 32 million tons in 2011.