Gaza war: Colombia banning coal exports to Israel would hit foreign investment

In a bid to pressure the government of Prime Minister Benjamin Netanyahu to end the conflict in Gaza, Colombia is set to impose a ban on coal exports to Israel.

The ministers of foreign affairs, finance, energy and trade decided to halt sales of the fuel to the Jewish state, according to a draft decree published Friday on Colombia’s trade minis. President Gustavo Petro, who has already severed diplomatic ties with Israel in May over the Gaza conflict, is now considering this additional economic measure.

However, this proposed ban has sparked controversy within Colombia. The country’s private mining association voiced strong opposition late Thursday, arguing that such a ban would violate international trade agreements and undermine market confidence and foreign investment. They stressed that disrupting coal exports could have serious repercussions for the economy and Colombia’s standing in global markets.

Bloomberg reported that this potential prohibition follows a series of diplomatic tensions between Colombia and Israel, initiated by President Petro’s administration, which has adopted a critical stance towards Israel’s actions in Gaza. The proposed ban on coal, a significant export commodity, is seen as a further step in Colombia’s effort to exert international pressure.

The unfolding situation highlights the complex interplay between diplomatic policy and economic interests, with Colombia weighing its moral and political positions against the potential economic fallout from disrupting its coal exports.

A source at the commerce ministry told Reuters there currently exists no order, resolution or decree which would prohibit or restrict coal exports to Israel.

Petro has strongly criticized Israeli Prime Minister Benjamin Netanyahu and Colombia has requested to join South Africa’s genocide case against Israel at the International Court of Justice.

Colombia, the world’s fifth largest coal producer, sent 56.7 million metric tons of coal abroad last year, including 3 million tons to Israel, about 5.4% of total exports, according to government data.

“This decision would not comply with international commitments by Colombia that should be respected and puts at risk the confidence of markets and foreign investment,” the Colombian Mining Association (ACM) said in a statement.

Israel is a key destination for Colombian coal and shipments there generate about $165 million a year in taxes, royalties and other contributions.

A free trade agreement between Israel and Colombia has been in force since 2020 and the ACM said that deal prevents imports and export restrictions between the two countries.

With inputs from Reuters.