BOGOTA ­­–– Drummond LTD today released results of an internal investigation it has conducted into events that took place at its port facilities in Cienaga on January 12 and 13.  The investigation, which included a review of all of the pertinent details of the accident, found that most of the recent press articles about the incident were factually incorrect, company officials announced.

The findings of this investigation include a full account of the technical and operational functions that made up this unfortunate accident. We very much regret this incident occurred, but we believe it is important to note that all of our actions, both during and after the accident, have been directed at minimizing its effects.  We have also studied ways to avoid any such future incident of this kind.

The company’s review included plans to modify its contingency procedures, as well as steps to comply fully with the Resolution issued to the Company by Autoridad Nacional de Licencias Ambientales (National Agency for Environmental License) on February 6, 2013

Here are the findings of the investigation:

• On January 12 at 2:44 pm barge 115 was loaded at Puerto Drummond pier with approximately 2,957 tonnes.  At 3:30 pm the barge was moved to buoy number two.  At 8 pm the barge was moved to ship Anangel Seafarer and at 9 pm the barge was moored to crane to begin loading operations.  The sea swells were reported to be 2 to 2.5 meters.  Approximately 1100 tonnes were unloaded, which completed top off (loading) of the ship.  3 small bulldozers were then loaded onto the barge and at 11:30 tugboat Rio Toribio removed barge 115 from ship Anangel Seafarer and moved it to ship Cape Elise where the 3 bulldozers were offloaded onto crane Colombia 4.

• At 12:10 am the tugboat removed barge 115 from crane Colombia 4 and anchored it at buoy 23.  By 1 am barge 115 was secured at buoy 23.  The report from the local weather agency indicated waves between 3 and 3.5 meters at that time with winds of 15 to 20 knots.  For the remainder of the shift, it was noted that bad weather prevailed in the loading area and the barge buoy area.  However, inspections of the area during the night by security personnel did not reveal any problem with the barge on buoy.

• At 6:20 am (just after sunrise), the entering shift supervisor observed barge 115 down on the stern end, semi-submerged, and in an emergency situation.  The emergency was assessed and categorized as level two and actions began to proceed as established for such an emergency in the company’s approved emergency plan.

• Pumps were requested from adjacent cranes as well as from on shore at the port facilities.  A tugboat was instructed to take an empty barge to the area of buoy 23 as part of the contingency plan to respond to the emergency.  Two cranes were also brought to assist in the rescue of the barge.  At that time, it was determined that the barge was near to sinking, therefore, full emergency actions were put into effect by the supervisor on site at that time.  Due to safety concerns for the people on board the cranes the decision was made to remove one of the cranes from the area and continue the rescue with crane Colombia 5.

• While awaiting the arrival of the empty barge and due to the rapidly worsening condition of the barge, the determination was made to remove bucketfuls of water, mixed with coal, from the sinking barge and these were dumped into the sea.  The supervisors and managers on board the crane Colombia 5 evaluated and concluded that this measure was having very little effect and the barge was showing signs of sinking further.  With the depth of this area at 12 to 13 meters, there was a risk of total sinking.

• At 10 am the barge’s buoyancy condition was assessed and it was decided that the best option was to move it to shallow water to keep the barge from sinking.  The barge was towed in a direction so as not to risk the blockage of the new public access channel, in the case of total sinking.  It also avoided the buoy anchors so as not to risk breakage of the hull of the barge.  At approximately 12:30 pm the barge touched bottom and additional water was removed using crane Colombia 5.  At 2 pm barge 115 completely re-floated and with its own pumps the flotation holds were emptied to right barge 115.  It was then taken to buoy 1 and moored for inspection and further evaluation.

• On January 15, approximately 1600 tonnes of coal and water were removed from barge 115 and transferred to barge 114.  As of today, the barge remains behind the pier in the work area.  We estimate that the barge still contains approximately 150 tonnes of coal.

• The occurrence of a distressed vessel (the barge) was reported to the Captaincy of Ports in Santa Marta on Sunday, January13.  Drummond’s operational personnel made the report as required by maritime regulations.    The Captaincy subsequently checked the barge in question for general conditions.

• Based on an onsite review of our permit requirements at the time of the incident, Drummond did not determine a requirement to notify ANLA.    In the revised Contingency Plan, both the Captaincy of Ports and ANLA, along with several other governmental offices, will be promptly notified should any similar event occur in the future whether required by regulation or not.

• As per Resolution No. 123 of February 6, 2013 issued by ANLA, the following are the steps Drummond Limited has taken/is taking to allow barge-loading operations at Puerto Drummond to resume:

• The technical team of Puerto Drummond has consulted with the Captain of the Port of Santa Marta and DIMAR in Bogota regarding the existing contingency plan for coal loading activities via barge.

• The revised contingency plan is to go through consultation (socialization) with the municipal mayor of Cienaga, the District Mayor of Santa Marta, and with CLOPAD.

• Drummond will then submit the revised contingency plan to ANLA for approval

Drummond regrets the occurrence of this industrial accident but that is exactly what it was, an industrial accident with no intent to harm the environment but conversely actions were taken to minimize damage to the environment.  Despite the most careful attention to detail and planning to avoid this type of incident, industrial accidents do occur.  Drummond is a large and loyal investor in Colombia that recognizes its responsibility to the environment and to the people of Colombia.  In the aftermath of the accident, and because of the intellectual assault on Drummond by many critics, Drummond feels like a victim themselves.

In the port operations of Drummond in Cienaga since 1995, the Company has had no major accidents.  We do have comprehensive management plans for environmental control at all locations. We have recently made significant investments at the mines which use state of the art environmental control measures by world standards.

We believe that the new, direct ship loading facility which we are currently investing $350 million to build will make our operations even safer in the area, since they will eliminate the need for barges to haul coal. The new direct ship loading system will be operational by the end of this year.

We are proud of our overall record in Colombia. Drummond is a responsible corporate citizen, providing over 8,000 jobs at the various locations and numerous offsite indirect jobs.  Drummond contributes tens of millions of dollars per year to community development projects, taxes and royalties, which are all important to the enhancement of the area.  We are a long time investor in Colombia and we will work for the betterment of Colombia as a whole.

                             #                           #                           #