Israel risks losing Colombian coal supplies over Gaza war

Colombia’s trade ministry is calling for a restriction on coal sales to Israel in the latest bid to isolate the Jewish state as the death toll rises in its Gaza campaign. 

The ministry made the recommendation to “limit” shipments of the fuel to a committee that rules on tariffs and foreign trade, according to an internal document seen by Bloomberg and a person with direct knowledge of the matter. 

Israel’s relations have soured with governments across Latin America this year, but until now this has mainly been expressed through diplomatic measures rather than trade sanctions. The Andean nation is Israel’s biggest coal supplier, having sold it about $450 million of the fuel last year. 

The trade ministry said the coal restrictions were intended to “help end the armed conflict”, and should stay in place until it has ended. Alabama-based Drummond Company Inc. and a Colombian subsidiary of Glencore Plc are the only two suppliers. 

More than half of Israel’s coal imports come from Colombia. Still, Oren Helman, former acting chairman of the National Coal Company, said, “There are many sources for coal. Israel also has significant coal reserves, so it will not be caught off guard.”

While coal has accounted for a fifth of Israel’s electricity production, it’s expected to drop to as low as 3% next year. It serves as an emergency backup for two of Israel’s main power stations that can be switched to coal in times of special need.

The government of Turkish President Recep Tayyip Erdogan almost entirely halted trade with Israel last month. 

War of Words

Colombia and Israel have historically had good relations, and have had a free-trade agreement in force since 2020.

But relations between the two countries deteriorated sharply in recent months, with Petro describing the intervention in Gaza as “genocide” while Israeli Prime Minister Benjamin Netanyahu called Petro an “antisemitic supporter of Hamas.” The two countries broke off diplomatic relations in May. 

The committee responsible for deciding on coal exports includes representatives from the trade, finance, and energy ministries, as well as the tax agency. 

The decision on whether to restrict exports could be taken as soon as Thursday, according to the person with direct knowledge of the matter. The Colombian presidency and trade ministry didn’t immediately respond to messages seeking comment sent after normal business hours.