Drummond

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Drummond Company, Inc.
Type Private
Founded 1935
Founder(s) H.E. Drummond
Headquarters Alabama & Colombia
Key people Garry N. Drummond (Chairman & CEO of Drummond Company Inc.); Larry Drummond (Vice Chairman of Drummond Company, Inc.); George Wilbanks (President of Drummond Coal Sales, Inc.); John Pearson (President of ABC Coke Division of Drummond Company, Inc.); Richard Mullen (Senior Vice President of Mining of Drummond Company, Inc.); Jack Stilwell (Senior Vice President and CFO of Drummond Company, Inc.); Augusto Jimenez (President of Drummond, Ltd. Colombia); Bruce C. Webster (General Counsel of Drummond Company, Inc.)
Industry Coal Mining
Products Coal and Coal Derivatives
Website http://www.drummondco.com; http://www.drummondco.com/operations/coal/Colombia.aspx

Drummond Ltd. describes itself as "principally engaged in the business of mining, purchasing, processing and selling of coal and coal derivatives."[1]

On its website it states that it "controls reserves totaling over 2 billion tons and shipped over 24 million tons of coal in 2006. Drummond primarily produces low sulfur or compliance coal, meeting Phase II requirements of the 1990 Amendments to the Clean Air Act." The company's current mining operations are in Alabama in the United States and its La Loma mine in Cesar Department in Colombia, serving customers in both the U.S. and Europe.[1]

A November 2007 presentation to investment analysts by the President of BHP Billiton Coal, Dave Murray, noted that Drummond had an 5% share of the global coal export trade, making it the equal fifth largest coal exporter in the world. (Drummond is equal with Shenhua).[2]

Company History

The company was founded in 1935, with the vision of H.E. Drummond, an entrepreneur who entered into coal business in Alabama. Upon his death in 1956, his sons built upon their father’s vision for the company. By the early 1970s, Drummond entered into the export coal market and quickly became an industry leader. In the late 1980s, Drummond expanded offshore and secured extensive mining rights in Colombia because of the significant low-cost, low-sulfur coal market opportunities.

Production began in 1995 at La Loma mine; in 1997 Drummond acquired El Descanso mine; and in 2003 acquired Rincon Hondo and Similoa reserves. These reserves have made Drummond one of the two largest miners of Colombian Coal. Drummond is now a major long term competitor in the international coal market, with over 2 billion tons of reserves that are strategically positioned relative to key power generation markets in the U.S. and Europe.

Colombian Coal

Drummond produced 22 million tonnes from its La Loma mine in Cesar Department in northern Colombia.[3] On its website the company states that it bought the La Loma mine in the late 1980's and that "development commenced in the early 1990’s." The thermal coal produced from the mine is marketed in 13 countries under the trade name Aire Amigo which the company states is "very low in NOx [nitrogen oxides]] emissions, which is highly desirable to utility plants required to lower these emissions."[1]

(Left to right) Colombia President Alvaro Uribe, Drummond President Garry Neil Drummond, and Drummond Ltd. President Augusto Jimenez.

On its website the company states that its mining operations "includes Mina Pribbenow, an open-pit coal mine located in the Cesar Coal Basin near La Loma, Puerto Drummond, a deep-water ocean port on the Caribbean Sea near Santa Marta, and coal transportation and handling facilities. Drummond Ltd. transports the coal from the mine 120 miles by railcar on the renovated portion of the Colombian National Railroad System and National Highway directly to Puerto Drummond, the deep-water ocean port."[1]

The company states that company exports from Colombia have grown from "1 million tons in 1995 to 22.9 million tons in 2007."[1] In 2000, coal extraction rose by 4 million tons at la Loma mine after Drummond built a huge dragline at the mine site.[4]

Conflict in Colombia

The Drummond Company has been the subject of numerous lawsuits regarding the murders of 70 union miners and railroad workers, collectively.[5][6][7] The murdered Colombians were killed by the notorious paramilitary group, United Self Defense Forces of Colombia (AUC), which had been hired by Drummond to act as security.[6] In addition to those killed, a lawsuit against Drummond describes "how hundreds of men, women, and children were terrorized in their homes, on their way to and from work… innocent people killed in or near their homes or kidnapped to never to return home, their spouses and children being beaten and tied up, and people being pulled off buses and summarily executed on the spot."[6]

WikiLeaks cables regarding paramilitary forces

According to U.S. diplomatic cables sent between 2006-2010 and released by WikiLeaks, Drummond paid paramilitaries for protection of its Colombian operations. An October 2006 cable said there were significant security improvements in the northeastern region of Colombia where Drummond operates due to private security operations in the area, including roving patrols along the company's railroad from their La Loma mine to the port in Santa Marta. The cable went on to say that these private security guards were former paramilitaries. Over the course of four years U.S. Embassy officials sent 15 diplomatic cables to Washington which expressed concern over the company's labor disputes, lax environmental practices and apparent links with paramilitary death squads.[8]

A federal Court in Alabama began a civil case against Drummond in 2010 for the alleged paramilitary links, in a case that is still underway. Victims of paramilitary violence in Colombia accuse Drummond of paying the paramilitary organization United Self Defense Forces of Colombia (AUC) between 1999 and 2005, during which time 116 civilians were murdered in the region where the coal company operates, allegedly by the right-wing militia. The civil case also seeks compensation for the relatives of several people who were murdered, which they claim was for refusing to sell their land to to make way for the company's railroad.[8]

Coverup of coal barge sinking

The crew of a barge owned by the Drummond Company dumped 2,000 tonnes of coal into the ocean in an unsuccessful bid to avoid the barge sinking. Drummond did not report the sinking to Colombian environmental authorities until 17 days after the accident, even though its environmental licence required the company to report such an event within a maximum of three days. Director of the Colombian Environmental Licensing Agency (ANLA), Luz Helena Sarmiento, accused Drummond of covering the accident up. Drummond claimed the coal was dumped overboard to save lives but Sarmiento said that the company's licence did not allow it to dump into the ocean to save the barge.[9] In 2011 Drummond exported approximately 25 million tons of coal from its mines near La Loma through Puerto Drummond.[10]

Alabama coal

Between 1994 and 2001, Drummond closed down five mines in Alabama, laying off 1,700 union miners.[4] As of 2001, Drummond operated only one coal mine in Alabama, Shoal Creek Mine, which employed about 500 people.[4]

In Spring 2009, Drummond Coal laid off 56 miners from the company's Shoal Creek underground mine in Jefferson County.[11] The mine started operating on a four-day work week.[11]

Alabama Coal port expansion

The Alabama State Port Authority has announced $360M to be spent over five years to improve infrastructure at the Port of Mobile,[12] and hopes that two customers - Drummond Company and Walter Energy - will pay for a proposed $9.5 million project to add export capacity at the Alabama McDuffie Coal Terminal. On Feb. 22, 2011, authority members voted to give state docks Director Jimmy Lyons the power to contract for a second shiploader at the terminal if he can reach an agreement with the Drummond Company and Walter Energy to pay for it by accepting a surcharge on top of the fees they normally pay to export coal through the terminal. The amount of metallurgical coal shipped from the Port of Mobile is rising due to increased demand from overseas steelmakers and widespread flooding in Australia in 2010, which shut down several coal mines there.[13]

Demand for export coal is increasing so much that Birmingham-based Walter had recently purchased the Mobile River Terminal for $35 million to increase its shipping capacity. Company officials said that they still planned to use McDuffie as well. McDuffie has two shiploaders, but one of them is broken. Lyons said McDuffie currently has capacity to export between 10 million tons and 12 million tons of coal a year. A new shiploader, to be built by Shanghai-based ZPMC, would expand capacity by about 50 percent. If Drummond and Walter do not agree to a surcharge to fund the improvements, the facility will reportedly continue to operate with one shiploader.[13]

Political and Public Influence

Political Contributions

In June 2000, Drummond gave $500,000 to the Republican National Committee.[4] The company also gave $25,000 to the National Republican Congressional Campaign that year.[4] In October 2000, Drummond gave $20,000 to the National Republican Senate Campaign.[4]

Lobbying

Corporate Accountability

Labor

Human Rights

Estate of Valmore Lacarno Rodriguez v. Drummond Company
This is the first case to reach trial that cites the Alien Tort Claims Act, a U.S. law created as a part of the Judiciary Act of 1789 that allows foreigners to sue American companies for their conduct abroad.
In 2002, the families of three deceased Colombian labor leaders and the union they belonged to, Sintramienergética, filed suit against Drummond Company, Inc. and its wholly-owned subsidiary Drummond Ltd. in U.S. federal court. The plaintiffs alleged that Drummond hired Colombian paramilitaries to kill and torture the three labor leaders in 2001. Sintramienergética represents workers at Drummond’s coal mining operations in Colombia. The case was brought under the U.S. Alien Tort Claims Act (ATCA), U.S. Torture Victim Protection Act and Alabama state law.
Drummond sought dismissal of the case. In 2003, the court granted dismissal on the state law claims and one of the ATCA claims. The court declined to dismiss the ATCA claims of extrajudicial killing and the denial of rights to associate and to organize. In March 2007, the court ruled that the case against Drummond Ltd. would go to trial but dismissed the case against the parent company of Drummond Company. In June 2007, the district court judge dismissed the wrongful death claims but allowed the war crime allegations under the ATCA. The trial began in July 2007, and after trial, the 10 person jury acquitted Drummond finding that the company was not liable for the deaths of the three murdered labor leaders. On December 11, 2007, the plaintiffs filed to appeal the lower court’s verdict with U.S. Court of Appeals for the 11th Circuit. In December 2008, the 11th Circuit Court of Appeals in Atlanta, Georgia upheld the verdict.[14]
In March 2009, the families of the three murdered men filed another suit against Drummond.[15] This time, a key witness who had been in prison during the trial has been released and is able to testify against Drummond.[16] [17] [18] [19] [20] [21]

Drummond charged in the murders of 67 Colombians
In May 2009, law firms Conrad & Scherer LLP (of Florida) and Ivey Law Firm (of Jasper, Alabama) filed a federal lawsuit against Drummond for the company's involvement in the murders of sixty-seven Colombians.[6] Drummond paid millions of dollars to the paramilitary terrorist group United Self Defense Forces of Colombia (the AUC) to protect the company's property and U.S. workers, and according to the lawsuit, "allowed the AUC terrorists to set up a military base of operations on its property, and supplied electric, food and fuel."[6] The sixty-page lawsuit documents many allegations of violence against people who were perceived as sympathetic to leftist guerilla groups and supportive of local union organizations, including "how hundreds of men, women, and children were terrorized in their homes, on their way to and from work… innocent people killed in or near their homes or kidnapped to never to return home, their spouses and children being beaten and tied up, and people being pulled off buses and summarily executed on the spot."[6] The lawsuit also describes a meeting between Drummond and the AUC in November 2000 where the company ordered the execution of two union leaders.[6]

The law firms represent 252 plaintiffs, who are relatives of the sixty-three men and four women that were murdered.[6] Their names were withheld from the lawsuit in order to prevent repercussions.[6]

The lawsuit was filed in the in US District Court for the Northern District of Alabama Western Division asks for a trial by jury.[6] Defendants named include Drummond Company, Inc., Augusto Jimenez (President of Drummond Ltd. in Colombia), Alfredo Araujo (Drummond's Director of Community Relations in Colombia), and James Atkins (Drummond Chief of Security in Colombia).[6] The charges include wrongful death and violations of the U.S. Alien Tort Act and Torture Victim Protection Act.[6]

In a ruling hailed as a victory for the families of the murdered men, on February 3, 2011, the 11th U.S. Circuit Court of Appeals in Atlanta, Georgia found that the children of three of the murdered men have standing to bring their suit in court.[22]

In a similar situation, in 2007 Chiquita Brands International pled guilty of making substantial payments to the AUC from 1997-2004.[6] Chiquita was forced to stop after a board member reported the illegal payments to the U.S. Justice Department.[6]

Protests against Drummond

July 2007: Protesters demand justice for murdered workers

Protesters with Students for a Democratic Society from Tuscaloosa and Birmingham marched to the Federal Courthouse demanding justice for three Colombian trade unionists murdered in 2001 and 2002.[23] At the time, Drummond was being charged with arranging the murders and was later acquitted.

Contact Information

Drummond Co., Inc.
P.O. Box 10246
Birmingham, Alabama 35202
Tel: (205) 945-6300 Website: http://www.drummondco.com/

Articles and Resources

Sources

  1. 1.0 1.1 1.2 1.3 1.4 Drummond, Drummond, Drummond website, accessed June 2008.
  2. Dave Murray, "BHP Billiton Coal CSG Anlayst Visit: Hunter Valley Energy Coal", BHP Billiton, November 2nd, 2007.
  3. Ivette E. Torres, "The Mineral Industry of Colombia", U.S. Geological Survey, U.S. Department of the Interior, December 2007.
  4. 4.0 4.1 4.2 4.3 4.4 4.5 David Bacon, "The Colombian Connection", "In These Times", July 23, 2001.
  5. International Rights Advocates, "Juan Aquas Romero, et al. v. Drummond Company Inc., et al.", Plaintiff's Opening Brief, December 11, 2007.
  6. 6.00 6.01 6.02 6.03 6.04 6.05 6.06 6.07 6.08 6.09 6.10 6.11 6.12 6.13 "Federal lawsuit alleges U.S. mining company Drummond paid millions to Colombian paramilitary terrorists who killed 67; including "execution" of union leaders", "Reuters", May 28, 2009.
  7. "Children of slain Colombian coal miners sue Drummond Co. in Birmingham federal court", "Birmingham News", March 20, 2009.
  8. 8.0 8.1 Hannah Aronowitz, "Drummond paid Colombian paramilitaries: WikiLeaks" Colombia Reports, March 16, 2011.
  9. Benjy Hansen-Bundy, "Caribbean coal spill coverup investigated", Colombia Reports, February 1, 2013.
  10. Drummond Company, "Mines:Colombia", Drummond Company website, accessed February 2013.
  11. 11.0 11.1 Patrick Rupinski, "Alabama miners nervous about the future of coal", "Tuscaloosa News", May 17, 2009.
  12. Dave Helms (2010-10-27). Alabama State Port Authority approves $360 million to upgrade infrastructure. Press Register. Retrieved on 2010-10-27.
  13. 13.0 13.1 Dan Murtaugh, "Port Authority wants to pass along costs of coal terminal upgrade" al.com, February 23, 2011.
  14. "Georgia court upholds verdict clearing Drummond in Colombian killings", "Birmingham News", December 28, 2009.
  15. "Children of slain Colombian coal miners sue Drummond Co. in Birmingham federal court", "Birmingham News", March 20, 2009.
  16. International Rights Advocates, "Juan Aquas Romero, et al. v. Drummond Company Inc., et al.", Plaintiff's Opening Brief, December 11, 2007.
  17. Kyle Whitmore, "Alabama Company Is Exonerated in Murders at Colombian Mine", New York Times, July 27, 2007.
  18. Drummon Ltd. "Drummond does not negotiate with illegal groups; the Company emphatically rejects all charges against the company and its executives", Press Release, March 21, 2007.
  19. Hugh Bronstein, "Drummond case shows danger facing Colombian unions”, Reuters, November 16, 2006.
  20. Andrew Gumbel, "US firm sued after mine union leaders' deaths", Independent [UK], March 25, 2002.
  21. Drummond Ltd. "Drummond's Colombian Operations"
  22. U.S. Court of Appeals, 11th Circuit [http://www.ca11.uscourts.gov/opinions/ops/200916216.pdf Appeal from the United States District Court for the Northern District of Alabama, D. C. Docket No. 09-00557-CV-RDP], February 3, 2011
  23. Jim Toweill, Birmingham protest: "Who is a terrorist? Drummond is a terrorist!", Fight Back! News website, July 2007.

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