US-based coal mining giant Drummond Co. told striking workers of the Sintramienergetica union on Monday that it could not offer more at the negotiating table, according to local media reports.
“The company cannot pay more and still stay competitive in the industry,” the company reportedly declared in a press release.
Some 10,000 workers (roughly half of Drummond’s work force) have been striking at one of Colombia’s largest coal exporters since late July of this year after weeks at the negotiating table over pay and compensation.
The strikes locked up Colombia’s northern coal port, causing Drummond to declare a force majeure. A force majeure is a legal declaration that un-obliges a company to meet its contractual obligations for getting promised product to market.
According to a Reuters report, Colombian workers have said they want a 9% pay raise with increments over the following years. But Drummond claims that it already pays its workers 30% more than others in the industry. The Alabama headquartered coal miner offered 4.5% and a one time $3,700 bonus, according to Reuters.
The union did not accept. Both parties remain in a stalemate.
Drummond Co. accounts for more than 30% of coal output in an economy that relies heavily on mining product exports. Colombia has been investing heavily in mining. In 2012 more than 50% of Foreign Direct Investment inflows went to the mining sector.
MORE: Strikes halt US coal giant Drummond in northern Colombia
The Cerrejon conglomerate, Drummond Co.’s main competition, has also experienced a drag on output after strikes paralyzed its operations early this year. The two companies together account for 85% of Colombia’s coal production.
Drummond Co. has come under fierce legal scrutiny over links to AUC paramilitaries and the alleged ordering of killings along its coal transit rail line in the late 1990s, not long after it started up in Colombia 1995.
The most recent court order (the third in the series) declared that Drummond is innocent of the charges brought against it. The court proceedings, led by Florida-based lawyer Terry Collingsworth, have stretched on for some eleven years now.
Sources
Final offer on collective bargaining (Drummond Co.)
Drummond no puede pagar más (Dinero)
Drummond, Colombia workers to resume strike talks: union (Reuters)
Status of Legal Proceedings, August 6th, 2013 (Drummond Co.)
Alabama billionaire battles murder suits as prices ebb (Bloomberg)