PEOPLE FIRST

Colombia 2020 | ENERGY | INTERVIEW

No matter the market performance, maintaining a good understanding and relationship with the surrounding communities has always been important to Drummond.

José Miguel Linares
BIOGRAPHY

José Miguel Linares is a lawyer by trade and has been with Drummond since the early stages of its operations in Colombia in the late 1980s, directly participating in the negotiations with the government for mining contracts and setting in motion the purchase of the real estate where the operations are located. After his post as the company's legal and administrative manager, he strategically transitioned to become vice president of corporate affairs. He took on the presidency toward the end of 2012.

How did the company position itself as an industry leader?
Drummond has been taking care of business in times when the market has not been the best. Despite facing low prices, the company has been cost conscious in its operations. We have always taken excellent care of our customers. Looking at the market, we have diversified our customers and moved a large amount of our coal to Asia, which was not the case 10 years ago. At the time, we sold about 50% of our coal to the US. Then, the US started fracking and produced a large amount of oil and gas with it. Its coal-based power plants were converted into gas plants. That forced us to start looking for other markets. Now, we have diversified and sell coal to about 25 different countries all over the world.

How has the company prepared to cope with recent low coal prices?
At the moment, we have an important infrastructure in Colombia in mining, ports, and railroads. Rather than reducing production, we are maintaining the same level of production and exports, with very few variations. We are also trying to maintain and use the infrastructure as best we can with the resources we have. We have 1.4 billion tons in reserves. The other key issue is our CSR programs. Maintaining a good understanding and relationship with the surrounding communities has been important to developing our projects. Having support from the community helped us to obtain all the necessary permits to continue advancing with our remaining plans.

What was the result of the Bettercoal evaluation in 2019?
It was positive. Colombia is in a great position among the countries Bettercoal has been evaluating. Within Colombia, Drummond is in a solid position as well, and the evaluation showed that we made improvements in many areas. There are still some areas where we can make many important improvements, and we are in a constant process of improving these. In general, though, it was a positive evaluation. We were the first company in the world to be audited by Bettercoal in 2014.

What about professional formation?
In terms of our CSR and matching that with our operational needs, the formation and training of workers is one of our key priorities. With that in mind, we put together our in-house training program. Most of the locals in the area have a basic level of education, and we give priority to locals. They do not have access to the level of education needed, so we offer in-house training programs instead of having them attend SENA, the Colombian public institution focused on the development of professional formation programs, which often doesn't offer training in the skillset we need. That is why we do our own training. At Drummond, we employ people from the local area for a full year of paid training with benefits. Today, we have about 60 people in the program, nearly all of whom land a permanent job with us by the end of it. We also offer 20 university scholarships per year for the best students at local public high schools, from families with low incomes. Including those awarded in 2020, we have handed out 150 scholarships. The scholarship not only pays their tuition, but also gives them money for their meals, materials, and transport. Today, we have a large number of graduates who are working for Drummond. They went to schools built by Drummond, with teachers trained by Drummond in one way or another, and received scholarships financed by Drummond to go to university. Now, they have found a job working for Drummond.