Colombian Thermal Coal Miners May Oppose Proposed Export Ban to Israel
Freight News 11/06/2024
Some Colombian thermal coal miners are exploring options including legal actions to oppose the proposed export ban announced by the country’s President June 8, sources said.
Colombia’s President Gustavo Petro took to the social media platform, X, formerly known as Twitter, to announce his government’s decision to come out with a decree that will ban thermal coal exports to Israel.
Currently, the ban is in the proposal stage with the government seeking comments from the country’s citizens and value groups between June 11 and June 17, following which the government will announce its final decision.
The proposal has received immediate backlash from several stakeholders involved in thermal coal mining and export, who have indicated that Colombia’s executive power has no authority to proceed with the decree.
Some participants suggested that the thermal coal miners of Colombia are likely to reject the decree in the consultation phase.
“We are analyzing different potential scenarios and weighing our legal rights. In terms of its impact, we need to wait and see what’s in the final wording to draw conclusions,” a Colombia-based producer said.
Colombia is one of the largest thermal coal suppliers to Israel and a ban on exports could prompt Israel to look for alternative sources to meet their demand at a time when the country is also fighting a war against Hamas in the Middle East region.
“I don’t know what the Colombian producers are going to do, but they have to find markets for their coal,” said a Med-based trader.
Israel imported 1.4 million mt of thermal coal in 2024 so far, according to S&P Global Commodities at Sea data. Colombia accounted for 855,700 mt – or 60% of all imports during this period.
Other key suppliers included Russia with 247,500 mt, South Africa at 169,200 mt, the US at 86,100 mt and China supplying 53,000 mt.
“Israel will have to get tons from South Africa and possibly the US, however they need 1.0% sulfur. They can also buy Australian, and Kazakstan tonnage. Shipping from the Black Sea, it would be a more than perfect fit, compared to South Africa,” a US-based trader said.
The trader added that Colombian producers are getting “boxed in” now as they were already faced with waning demand from Europe while only a few Asian countries along with smaller coal consuming countries such as Israel were able to provide some respite.
“Their markets in the Atlantic are being limited to minimal tonnage to EU and Chile. Without Chinese business, I don’t think they can sell cheap enough to compete into India. Maybe the EU election will encourage more coal generation vs growth of wind and solar,” the trader said.
The average price of Russia’s FOB Black Sea 6,000 kcal/kg NAR coal in 2024 is $74.90/mt, according to S&P Global Commodity Insights data, reaching a $90/mt high on Jan. 5. Meanwhile, FOB Colombia 6,000 kcal/kg NAR coal averaged $81.75/mt with a $105/mt high on April 19, and FOB Richards Bay 5,500 kcal/kg NAR averaged $87.35/mt with a $101.05 high on June 3.
