* Drumond export shortfall to be 4.5 to 5.5 million tonnes

* But price impact to be limited as other producers step in

* European coal stocks will also mitigate Colombian shortfall

Colombia’s coal export difficulties will reduce its supplies to Europe this year by almost 10 percent but the shortfall will not have a big market impact as other producers step in and high stock levels lessen the impact, analysts said.

Colombia typically supplies around 50 million tonnes a year of hard coal to Europe, making up almost 20 percent of European imports.

The Colombian government passed a law last year requiring coal producers to build direct ship-loading facilities in their ports by Jan. 1, 2014. These enclosed conveyor belts, which pour coal direct into vessels’ holds, reduce the pollution associated with the use of cranes and barges.

But U.S. mining company Drummond, which provides around a third of Colombia’s exports, had to halt loading at its port as it has yet to finish building its system, which it expects to have in place in March.

Following reports of the export ban, European physical coal prices rose almost 8 percent as supplies tightened during Europe’s peak winter energy demand period.

Deutsche Bank said on Tuesday that a halt to Drummond loadings from Colombia would probably remove 5.5 million tonnes of supply in the first three months - which would equate to roughly 10 percent of annual exports - assuming that direct loading becomes available by the end of March.

Despite the reduction in Colombian exports, French Bank Societe Generale said it did not expect Drummond’s export ban to have a long lasting impact on Europe’s coal markets, where around 70 percent of Colombia’s coal goes to.

“We estimate that the maximum impact should be equal to 80 days. In terms of lost volumes, we estimate the impact to be approximately equal to 4.5 million tonnes assuming there is no resolution of issues before the end of March,” Societe Generale’s Paolo Coghe said in a research note, also on Tuesday.

He added that he did not expect the price rally that followed the ban to last for long.

Societe Generale said that other coal suppliers such as the United States could step in to make up for lost Colombian cargoes and that healthy European coal stocks of almost 6.5 million tonnes at the end of December would also mitigate the Colombian shortfall.

“All in all, we believe the impact of Drummond’s lost volumes on the seaborne market will be limited both in time and in magnitude,” the bank said.