UPDATE: Colombia's Cerrejon Coal Mine Union Votes For Strike

Union workers at Cerrejon LLC, Colombia's largest coal exporter, voted in favor of a strike Thursday as negotiations with the company regarding salary increases remain stalled.

The polling results showed that 2,935 union members participated in the voting and 2,829 workers voted in favor of striking. A walkout could start as early as Sunday or as late as Feb. 5, said Jose Brito, a union official, before the official results were announced. The results still need to be ratified by a union assembly Saturday.

A strike at Cerrejon, equally owned by mining giants Xstrata PLC (XTA.LN), Anglo American PLC (AAUKY, AAL.LN) and BHP Billiton (BHP, BHP.AU), could cripple Colombia's coal exports. Colombia ranks as one of the world's top coal producers, with output at 76 million tons in 2010. Mines and Energy Minister Carlos Rodado said on Jan. 14 that coal production for this year is expected to reach 96 million tons.

Cerrejon President Leon Teicher said in a Jan. 20 interview with local newspaper Portafolio that the company produced 30.2 million tons of coal in 2010 and used its stock reserves to raise its exports to 31.4 million tons of coal. The company plans to export 32 million tons of coal in 2011, he said.

Devastating rains in the last months of 2010 affected coal output in Colombia, and they are set to continue in the coming months, although much milder.

The negotiations between the union and Cerrejon focus on the workers' demands for a 9% salary increase. The company is instead offering 6%. High commodity prices have emboldened union workers into demanding higher wages.

"This company is making a lot of money and they want to keep our salaries low," Brito said.

Alvaro Lopez, the chief negotiator for Cerrejon, said that he didn't expect the workers to stage a strike before the Feb. 5 deadline and that the talks with union officials were set to resume on Monday. "The threat of a strike is one of the mechanisms they have available but we can continue negotiating," he said.

Igor Diaz, a union official, said that the workers were negotiating with a range of 7% to 9% for a salary increase. "The company doesn't want to move from the 6% offer," he said. "It seems that they don't want to reach an agreement."

-By Darcy Crowe, Dow Jones Newswires; 57-314-298-3277; [e-mail]