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LONDON, Jan 8 (Reuters) - European physical coal prices jumped on Wednesday as renewed Colombian government scrutiny over coal export operations threatened to restrict supplies to Europe.
The price of coal for delivery in February into Europe's main terminals in Amsterdam, Rotterdam and Antwerp (ARA) was up $3.60 from the previous settlement at $84.75 a tonne at 1750 GMT.
Coal for March delivery was up $0.85 at $80.25 a tonne.
Price gains were fuelled by concern that a government inspection of coal miner Drummond's port facility on Colombia's Atlantic coast on Wednesday could lead to a months-long suspension in exports.
Environment Minister Luz Helena Sarmiento, who travelled on Wednesday to visit Drummond's export facility, will hold a news conference from the site at 2 p.m. local time (1900 GMT).
A mining ministry statement on Wednesday suggested that Drummond's coal-loading operations could be closed by the environment minister after her inspection in spite of arrangements the government made with the company last month.
Traders expect clarification on the issue during the news conference.
At issue is a new law banning coal exporters, including Drummond, from loading ships using cranes from Jan. 1 in favour of a less polluting conveyor belt system.
Drummond expects to comply with the law by March and, following a government deal in December, expected to pay daily fines until the new system was introduced.
Several local news media operations reported that government was expected to announce that Drummond would be ordered to suspend loading coal, which would probably shut down most of its operations in the country.
"With the uncertainty over Drummond, a European player is withholding supplies from the market until there is more clarity on Colombian exports and that's supporting the price basically," a trader said.
On Tuesday, the March ARA contract hit its lowest level since it started trading on the GLOBALcoal platform in December at $79.25 a tonne, trading data showed.
South African cargoes from its Richards Bay export terminal for February delivery were trading $0.15 lower on Wednesday at $80.75 a tonne.
In the Asia-Pacific market, China approved the construction of more than 100 million tonnes of new coal production capacity in 2013 - six times more than a year earlier and equal to 10 percent of U.S. annual usage.
(Reporting by Nina Chestney and Oleg Vukmanovic; editing by Keiron Henderson)
((nina.chestney@thomsonreuters.com)(+44)(0)(207 542 8071)(nina.chestney.thomsonreuters.com@reuters.net))
Keywords: MARKETS COAL/PHYSICAL