Union workers and Cerrejon LLC failed to reach a deal Friday despite the government’s attempts to broker an agreement, bringing Colombia’s largest coal producer closer to a strike that could cripple exports.
“We don’t have an agreement,” said Igor Diaz, the president of the Sintracarbon union, after the last round of negotiations with Cerrejon concluded Friday. “We have to present the company’s last offer to the workers so they can decide whether to go on strike.”
Angelino Garzon, Colombia’s vice president, tried to serve as mediator between the union and management in a meeting that was also attended by Leon Teicher, Cerrejon’s president. The negotiations have been deadlocked for days over the union’s demands for a salary increase of at least 7% for this year. On Friday, the company increased its offer to 6.5%.
Diaz, the Sintracarbon leader, said the union’s more than 4,000 members would have to decide Saturday whether to go on strike. The walk-out could start Saturday at midnight, he said.
A strike at Cerrejon would hurt Colombia’s coal exports, which in 2010 reached 76 million tons. Coal sales abroad are expected to reach 85 million to 90 million tons this year. Cerrejon, a joint venture equally owned by mining giants Xstrata PLC (XTA.LN), Anglo American PLC (AAUKY, AAL.LN) and BHP Billiton (BHP, BHP.AU), produced 90,000 tons of coal per day in January and is expected to produce 32 million tons of coal in 2011.