Colombia's coal industry faces bleak outlook

Subject

The slump in the price of coal and Colombia's slowing economy.

Significance

With the global pressures of falling prices and reduced demand, as well as the domestic challenges of environmental restrictions and worker protests, Colombian coal is facing an uncertain future. Production incentives for coal firms operating in the country have weakened, and interest from foreign investors has waned. As oil and coal are Colombia's two principal exports, the falling prices of both at the same time represent a major blow to the country's economy.

Impacts

• Growth in the coal sector will remain low, or even negative, until the downward price trajectory is reversed.
• Reduced profitability of coal mining projects will further discourage investment and increase pressure to find efficiency savings.
• The shrinking hydrocarbons sector will prompt more spending cutbacks in other areas.