Engineering work advances on Colombia's Fenoco coal railway

BOGOTA, May 21 (Reuters) - Engineering work to enable Colombia's Fenoco coal railway to resume overnight operation has been progressing after protestors had interrupted it in late April, a local government authority said on Thursday.

The Constitutional Court halted the line's overnight use in February after residents of one town complained about noise from passing trains, cutting the line's capacity by one quarter. The ruling said, however, that the line could reopen if noise levels were lowered.

Fenoco is owned by three coal mining companies - U.S.-based Drummond, Glencore (Xetra: A1JAGV - news) 's Prodeco and Goldman Sachs Group Inc's CNR (Shanghai: 601299.SS - news) .

The railway initially faced protests from residents in Bosconia municipality when it began building gabions, or sound-insulating walls, late last month, but a press officer at the town hall said these ended after a couple of days.

"Things are calm," she said. "The works are under way, and they are building the walls."

Fenoco officials declined to confirm whether the work was under way following requests from Reuters over the last few weeks.

Mines and Energy Minister Tomas Gonzalez said in late April he expected construction of the walls, which are 2.5 km (1.9 miles) long, to take about two months.

Drummond has said it is rescheduling the arrival of some ships collecting coal to help freight companies avoid port demurrage charges due to delays stemming from the railway restriction.

Local newspaper La Republica reported on Thursday that National Mining Agency chief Natalia Gutierrez cut the 2015 forecast for coal output to 87 million tonnes from 97.8 million. The report said first-quarter coal output was 23.2 million tonnes.

The agency could not immediately confirm the figures.

The chief executive officer of CMC (Shanghai: 600327.SS - news) , the exclusive exporter of coal for Colombia's biggest miner, joint venture Cerrejon, estimated on Wednesday that the railway restriction had prevented around 3 million tonnes being shipped so far.

Cerrejon has its own private railway and is not affected by the restriction on Fenoco. (Reporting by Peter Murphy; Editing by Lisa Von Ahn)