By Mauricio Botero Caicedo, EL ESPECTADOR, September 6, 2020
(Translated by Eunice Gibson, CSN Volunteer Translator)
A few days ago the Cerrejón Company, one of the principal thermal coal open pit mining companies in the world, went on strike. According to press reports, rather than the collective bargaining agreement, at this moment the most relevant for the workers is the shift change. The workers at Cerrejón are not exactly orphans with regard to benefits: besides excellent salaries, they enjoy many privileges, such as scholarships to excellent universities, even including undergraduate and postgraduate studies for their children.
But the objective of this article is not to talk about the merits or demerits of the working conditions, but to point out that I believe the focus, not just of the labor unions but also of the companies, is mistaken. What the labor unions and Cerrejón ought to have is a radically different conversation. The reason why the conversation needs to be different is that demand for the product thermal coal is seriously threatened both in the short and intermediate range. Its price will be collapsing before very long. Demand is in doubt, not just because of the extremely high rate of contamination, and consequently for the high taxes that the people who continue to consume it will have to pay, but also because the clean alternatives to thermal coal are, in fact, already much more economical.
The noted analyst Mauricio Cabrera Galvis, in an article published in June of 2019, makes the following comments: “The future of coal is blacker than the color of the mineral that comes out of the ground. I refer to the economic future, not because the reserves are running out and production is diminishing, but because consumption is going to diminish and prices are going to fall . . . The European Union is going slower on this, but it has fixed a goal of closing all plants powered by coal, plants that today produce more than 20% of the energy in the region. In the United States, so far in this century, coal consumption has fallen from 1,100 million tons to 690 million tons, and the prediction is that in two years it will fall another 100 million tons. The lower consumption is already affecting prices, which have fallen by 30% just this year, in clear contrast with the recovery of oil prices, and I don’t expect they will recover in the short term. A dark future for those who are not prepared.”
Since the date of Cabrera’s article, things have gotten worse. During the first half of this year, the Cerrejón mine reported losses of 368,000 million pesos (about USD 99 million). The second half will be worse yet. There is no power on earth that can force a company to operate in the red; when a company sees that repeated losses are structural and not situational, it closes down. And closing, Mr. Union Member, I’m afraid could be the only way out for the thermal coal companies in Colombia (and eventually in the whole world). Because of that, the conversation by Cerrejón and the other companies with the labor unions, although necessary, will not be an easy one. It will have to turn on how to prepare and retrain the tens of thousands of workers in the sector who eventually are going to be in the street. Is it possible to retrain the workers, teach then some other way to fish? Of course it is, but it requires an enormous effort on the part of the company and of the workers. If they, accompanied by academia, experts in different fields, teachers and coaches in numerous specialties, made a monumental effort to achieve it, the goal of retraining could become a reality. The dilemma is: everybody will talk or everybody will lose!