For decades, coal has been one of the pillars of Colombia’s economy. Alongside oil, it helped finance public spending, supported thousands of jobs, and positioned the country as one of the world’s leading coal exporters. Thermal coal, in particular, became a key part of Colombia’s mining-energy sector, with most production concentrated in the departments of La Guajira, Cesar, and Córdoba and almost entirely destined for international markets.
Official data from Colombia’s mining authorities show that more than 90% of the country’s coal is produced through open-pit mining and exported abroad. At its peak in the late 2010s, Colombia shipped over 70 million tons of coal per year. Even in 2024, despite growing challenges, the country remained among the world’s top coal exporters, with an estimated 57 million tons shipped overseas.
Yet the picture has changed significantly. What was once a stable source of export income is now facing a combination of falling prices, declining competitiveness, and policy uncertainty. Together, these factors are reshaping the coal industry and raising serious concerns for jobs, regional economies, and Colombia’s broader economic model.
Falling exports and weaker production
One of the clearest signs of trouble is the drop in coal export value. Coal was responsible for more than 21% of Colombia’s total exports in 2022 and over 70% of mining export value, a key contributor to the country’s trade balance. In recent years however, while export volumes have not collapsed entirely, revenues have fallen sharply due to lower international prices. According to Colombia’s National Administrative Department of Statistics (DANE), exports of coal, coke, and briquettes fell by 60% between 2022 and 2025, from US$12.289 billion to US$4.901 billion.
That importance makes recent declines more painful. In 2023, coal exports fell slightly in volume, but export revenues dropped by nearly 25% as global prices weakened. In 2024, shipments were uneven throughout the year, with brief recoveries followed by renewed declines. This volatility has made planning difficult for producers and has reduced the flow of foreign currency into the economy.
Production trends tell a similar story. Colombia’s total coal output has stabilized around 60 to 66 million tons per year according to mining sector data, well below the levels reached a decade ago. Large producers have begun adjusting their operations accordingly. Cerrejon, one of Latin America’s largest open-pit coal mines, announced plans to cut annual production by between 5 and 10 million tons, citing low prices, high transport costs, and operational challenges.
Lower production directly affects exports, tax revenue, and royalties. It also signals that the sector is entering a period of structural adjustment rather than facing a short-term slowdown.
Policy decisions and regulatory pressure
Government policy has played an important role in shaping the current environment for coal. Under president Petro in particular, Colombia has placed greater emphasis on energy transition, environmental commitments, and fiscal reform. While these goals respond to global climate concerns, they have also introduced new challenges for traditional fossil fuel and mining industries.
One of the most impactful decisions was the ban on coal exports to Israel in 2024. Colombia had been an important supplier to that market, and the sudden halt in exports led to steep declines in export revenues during key months. In some periods, the value of coal exports fell by nearly half compared to the previous year, highlighting how quickly policy decisions can affect commodity trade.
Fiscal measures have also added pressure. A temporary tax on fossil fuel production, including coal, was introduced to raise emergency funds. While designed as a short-term measure, industry representatives argue that additional taxes, combined with existing royalties and regulatory costs, increase production expenses at a time when international prices are already low.
As highlighted by the newspaper El Tiempo, the Colombian Coal Mining Federation (Fenalcarbon) has warned that a global oversupply of coal and coke inventories, combined with a sharp decline in international prices, has significantly weakened the industry’s margins.
According to the association, these external pressures have been compounded by a series of tax and administrative measures implemented in Colombia over the past three years, further eroding the sector’s international competitiveness.
Fenalcarbon also pointed out that in 2025, exports of coal-related products fell by 21.2% in volume and 31.8% in revenue compared to 2024. This decline has resulted in significant job losses across the entire value chain and lower levels of cargo transportation, amplifying the economic impact on mining regions and logistics corridors.
The scale of these losses highlights how deeply coal mining is intertwined with regional labor markets and local economies, particularly in mining-dependent departments. Fenalcarbon cautions that without a stabilization in production and clearer policy conditions, job destruction could accelerate, further weakening fiscal revenues and exacerbating social pressures in communities where alternative sources of formal employment remain limited.
Colombia is losing ground in global markets
Colombia’s coal challenges cannot be separated from changes in the global energy market. While coal continues to play a role in electricity generation and industry, especially in parts of Asia, demand has weakened in traditional markets such as Europe and North America, where governments are accelerating the shift toward cleaner energy sources.
At the same time, competition has intensified. Countries such as Australia and Indonesia have expanded their coal exports and benefit from geographic advantages that lower shipping costs to major Asian buyers. For Colombia, long shipping distances represent a structural disadvantage. Voyages to Asia can take more than 50 days, making Colombian coal more expensive to deliver compared to competitors located closer to demand centers.
This means Colombian producers must compete not only on coal quality, which remains high, but also on price and logistics. As transport costs rise and prices fall, maintaining market share becomes increasingly difficult.
Jobs and regional economies under strain
The impact of the coal slowdown is felt most strongly in mining regions. In departments such as La Guajira and Cesar, coal mining has long been a major source of formal employment and local income. Large operations support thousands of direct jobs and many more indirect ones in transport, services, and local commerce.
When production slows or exports fall, these jobs are at risk. Companies reduce shifts, delay hiring, or cut back operations, affecting household incomes and local businesses. The effects extend beyond workers. Local governments depend heavily on mining royalties and taxes to fund schools, health care, infrastructure, and social programs. As revenues decline, public budgets come under pressure.
The situation is particularly difficult for small- and medium-sized mining operations, which make up nearly 98% of coal mining titles in Colombia. These producers often lack the financial reserves to withstand prolonged downturns and are more vulnerable to price swings and regulatory costs.
The current downturn in the industry poses a direct threat to the long-term sustainability of Colombia’s coal sector. As reported by the newspaper El Tiempo, Fenelcarbon notes that a 19% drop in coal production over the past two years — equivalent to roughly 10 million metric tons — has already triggered severe employment losses.
According to industry estimates, this contraction is leading to the elimination of more than 25,000 direct jobs and approximately 100,000 indirect jobs across the broader coal value chain, including transport, port operations, contractors, and local service providers.
Rethinking coal’s role in Colombia’s economy
The current downturn highlights broader questions about Colombia’s development strategy. Coal has long been a key driver of export revenue and fiscal income, but reliance on commodities exposes the economy to global price cycles and structural changes in energy demand.
Efforts to diversify the economy are already underway, including investments in renewable energy, agriculture, manufacturing, and services. However, transitioning away from coal is complex. Mining workers may not easily move into other sectors, and coal-dependent regions often lack the infrastructure needed to attract new industries quickly.
For now, coal still matters. It remains a vital component of Colombia’s mining-energy sector and a significant source of income for many regions. But its role is clearly changing. Managing that transition — while protecting jobs, supporting communities, and maintaining economic stability — will be one of Colombia’s central policy challenges in the years ahead.
The decline of coal is not just an industry story. It is a test of how Colombia adapts to global economic shifts while ensuring that the costs of change do not fall disproportionately on the regions and workers who powered the country’s growth for decades.
In this context, and given the current economic landscape, critical questions emerge: How can Colombia safeguard jobs, fiscal stability, and regional development as its coal industry steadily loses ground in global markets? And is the country prepared to absorb the social and economic costs of an accelerated coal decline without a fully developed alternative engine of growth?