Colombia: coal mine as a gold mine


While Germany says goodbye to Russian gas, nuclear power and domestic coal production, more and more coal is imported from Colombia. The strange consequences of the energy transition.

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The governments in Germany and Colombia had announced a decarbonization strategy. But actually the opposite happens. And the beneficiaries of this development are based in Switzerland.

Almost a year ago, when Gustavo Petro and Francia Marquez were on the verge of their historic election victory in Colombia, they made a historic promise to their compatriots during the election campaign. The program of the left-wing alliance “Pacto Historico” read that the South American country wanted to withdraw from fossil fuels under her leadership.

Not only Colombia's Vice President Francia Marquez is wondering: “In this department, children are dying of hunger. Is that development?”

With a Twitter comment, the then environmental activist and current Vice President Francia Marquez had a special look at the coal mine “El Cerrejon”, the largest in Latin America: “The largest coal mine in Colombia is in La Guajira, and children are dying of hunger in this department. Is that development?”

Coal exports to Germany

It is precisely from this mine that the coal comes that Germany purchases after the start of the Russian war of aggression in Ukraine to compensate for the loss of Russian gas supplies and the embargo on Russian coal imports. The political decision in Germany to phase out nuclear power and to replace electricity generation with coal, at least temporarily, is currently creating additional demand for coal.

Switzerland is benefiting from the war and the energy transition

The Glencore group is the big beneficiary of this development. The Swiss company had completely taken over the mine just a few weeks before the Russian invasion of Ukraine. Since then, export figures have only gone in one direction: up.

The El Cerrejon mine, the largest open-pit mine in Latin America – in the middle of a water-scarce area

While a Glencore spokeswoman explains: “We do not comment on individual markets”, these figures speak for themselves: According to the German coal importers, 7.3 million tons of hard coal came from Colombia in 2022 alone. Coal imports from the South American country are likely to have at least doubled in the first year of the war in Ukraine – and the trend is rising. In mid-July last year, the price of coal on the world market reached a record price of almost $400. In the meantime it has fallen sharply again. In mid-May this year it was around 117 dollars per ton and thus back to the level of 2021 ;                        &nbsp ;                        &nbsp ;                        &nbsp ;         

Glencore is thus benefiting from the political developments. On the one hand, shareholders of competing companies pushed to sell shares in coal mines in the course of the political discussion about shared responsibility for climate change, on the other hand, at that time only Ukrainian politicians warned against another Russian invasion of their territory.

Activist Jakeline Romero Epiayú considers the “impact on cultural and social life” to be devastating

A coal mine as a vein of gold

The El Economista portal calculated a few months ago that the purchase of the controversial mine brought in hundreds of millions of dollars for the world's leading mining and raw materials trading group. In June 2021 Glencore bought the remaining share from competitors BHP Group and Anglo American 66 percent of the “El Cerrejon” mine for a total of 588 million US dollars and thus became the sole owner.

BHP and Anglo American shareholders welcomed the deal in light of issuance targets. The two companies had come a step closer to the goal of switching to sustainable energy. According to media reports, however, a certain clause made the coup perfect: the mine's cash flows would flow into Glencore's coffers from 2021. And so the Swiss had drawn the main prize.

And where does the money go?

Mine critics who live alongside the coal mines complain that the enormous profits made by the group is retracting as a result of political developments, far too few remain in the region. “The money generated from the coal doesn't even stay here in La Guajira,” says Leobardo Sierra, a spokesman for the indigenous Wayúu community El Rocío, in an interview with Deutsche Welle.

New tires for the giant trucks in the El Cerrejon opencast mine

Activist Jakeline Romero has a similar view Epiayú from a Wayuú women's rights organization. “Today, after decades of mining activity in La Guajira by the company Cerrejón, whose sole owner is Glencore today, the effects on the regional economy, on the cultural and social life of these areas are devastating,” Romero told DW. Among other things, the mine has led to increased water shortages in a region where water is already scarce.

At the request of Deutsche Welle, the mine operators clearly contradict the allegations from the region. “Cerrejón makes a positive contribution to the development of La Guajira and currently generates around 46 percent of the regional gross domestic product. With more than 61 percent of the 12,000 employees from the region, Cerrejón also makes an important contribution to local employment.”