Colombia could help Europe get rid of Russian coal

Sanctions against Russia have intensified Europe’s search for alternative energy suppliers. One of them is Colombia whose President Duque seeks to take advantage of the country’s coal reservoirs. This risks aggravating already existing socio-environmental conflicts and human rights violations for the inhabitants of the main mining regions.

European energy supply, without Russia?
In response to Russia’s invasion of Ukraine, the European Union (EU) introduced numerous sanctions. These target the energy sector of imminent importance in Russia. On April 8, EU member states announced a major ban on Russian coal from August 2022. Until then, 70% of European thermal coal imports came from Russia.

This sparked a global search for viable alternatives. Rising imports from other major suppliers, including Australia, South Africa and the United States, play an important role in this regard. Colombia is another candidate that seems willing and able to increase its coal sales to Europe. Prior to Russia’s invasion of Ukraine, Colombia had already doubled its thermal coal exports to Europe in the short term when logistical problems delayed the delivery of large-scale Russian coal. It is therefore not surprising that Colombian President Duque reported publicly on a phone call with German Chancellor Olaf Scholz in which Colombia agreed to increase its coal exports to Germany as a replacement for Russia. .

Colombian Charcoal: A Suitable Substitute?
Natural resource exports have supported the Colombian economy since colonial times. Due to the rapid increase in world commodity prices, this trend has accelerated since the turn of the century. While Colombia is endowed with many resources of global interest, including oil, gas, gold, emeralds and many more, coal plays a particularly important role. For example, Diego Mesa, Minister of Mines and Energy in the conservative Duque government currently in power, said in March 2021 that coal mining provided 120,000 jobs, generating 85% of all government mining revenue. central.

Coal mining is geographically concentrated in the northernmost provinces of La Guajira and Cesar. The department of La Guajira has been home to the largest open-pit mine in Latin America since the 1980s. Commonly known as “Cerrejón”, its owner company Glencore benefits from major tax breaks in Colombia. However, ordinary citizens do not seem to have benefited from this wealth of resources. About 63% of its citizens live in poverty and another 25% live in extreme poverty. As thousands of residents, especially the indigenous Wayúu, struggle to access clean water, water sources have been diverted to the mine, which consumes 24 million liters of water every day.

Affected communities are increasingly mobilizing against this use of Colombia’s natural wealth, angered by the impact it is having on the lives of ordinary citizens. This has fostered an increasing number of socio-environmental conflicts across Colombia. The Duque administration and its predecessors have in the past tended to side with transnational mining corporations, arguing that natural resource revenues are necessary to achieve development. Continuing to take advantage of these resources, as a result of the Ukrainian crisis, is therefore likely to intensify these conflicts given its impact on Colombian citizens.

For Cerrejón, the practical implications are already surfacing: Glencore (one of the world’s largest natural resource companies) is now considering further expansion of the mine. To that end, the Duque administration recently granted permission to divert Bruno Creek, the main tributary of the last remaining river in the Guajira Desert. Openly violating previous court rulings, the consequences of this ruling are life-threatening, with experts fearing the move could dry up the entire river.

Risk outlook
Considering that the lifting of sanctions against Russia is very unlikely without a withdrawal from Ukraine, its consequences for Colombia are very unlikely to change in the short term. Decades of mobilization and protest, particularly at local and regional levels in affected areas, appear to have done little to change this use of natural resources. Tellingly, outgoing President Duque recently announced that Colombia’s 2022 and 2023 coal production has already been decided and sold. Even an electoral victory for leftist Gustavo Petro in the second round of the upcoming presidential elections may not be enough to trigger a major shift in the dominant development paradigm in Colombia. Although Petro said during the campaign that it would ban all new exploration for fossil fuels, this does not affect the current use of these resources and other contractual obligations. Moreover, the lack of Congressional support may well prevent the implementation of such alternative policies. Thus, political instability, citizen protests and unrest resulting from these socio-environmental conflicts are likely to persist in the short and medium term.

By Global Risk Insights

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