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Easing restriction on Colombia coal train would take months - court
February 12, 2015 / 5:37 PM / 3 years ago

Easing restriction on Colombia coal train would take months - court

BOGOTA, Feb 12 (Reuters) - Colombia’s constitutional court could take months to consider the government’s request to ease restrictions it imposed on the use of the Fenoco coal railway, a senior court official said, raising the likelihood that exports would be affected.

Mines and Energy Minister Tomas Gonzalez asked the court on Feb. 3 to soften a ruling that bans the railway’s use between 10:30 p.m. and 04:30 a.m. (0330 and 0930 GMT) in response to complaints of noise by residents of one municipality it crosses. The ruling takes effect on Friday.

Shortening the workday by six hours will probably cut the capacity to carry coal to export terminals on the Caribbean coast for the three miners that operate the railway: U.S.-based Drummond Co Inc, Glencore PLC’s Prodeco unit and Goldman Sachs Group Inc affiliate CNR.

But with few options for recourse after the case reached Colombia’s highest court, the ministry’s appeal is likely to go in a queue and pass through the hands of several judges for examination before a final decision can be made.

“There are no legal requirements obliging the court to examine the Mines and Energy Ministry’s request to modify or defer the effects of this ruling,” said the official, who is not authorized to speak on the record and requested anonymity.

“Examining this request could take months, depending on the caseload,” the official said. “Until then, the ruling is immediate and mandatory.”

Together, the three miners using the 226-km (140-mile) track produce more than half of Colombia’s annual output of roughly 90 million tonnes.

The complaint over noise and dust dispersed by the coal trains came from residents of the municipality of Bosconia in the northern province of Cesar.

Fenoco officials had no immediate comment. One key question is whether the railway could compensate for the lost hours by adding extra wagons to its trains.

Local coal traders say European demand is subdued, which may buffer the effects of the railway’s reduced capacity.

European API2 2015 coal futures edged up 1 percent to $62.95 a tonne on Thursday, holding above a nine-year low of $55.60 hit on Jan. 26. (Writing by Peter Murphy; Editing by Lisa Von Ahn)

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