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Output, exports in Colombia up last year

MAJOR coal players in Colombia played a big role in a year-on-year production jump of more than 1...

Donna Schmidt

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According to Reuters, the production rise totaled 15.4%, up to 85.8 million tonnes, and the 16% increase in exports totaled 79.2Mt for the year.

The largest spikes were from Glencore’s Prodeco, Drummond, Vale and a local division of Goldman Sachs, which operate in the Cesar province.

The regulator told the news service that the second largest coal exporter in Colombia, Drummond, which entered an 80:20 joint venture with Japanese firm Itochu last year, realized a 9.5% rise in output at its La Loma and El Descanso mines to 23Mt in 2011.

At the same time, output at Glencore's Prodeco went up 44% to 14.4Mt in 2011 versus the prior year, the regulator said.

Also, according to Reuters, the Guajira state – home to the largest exporter Cerrejon – jumped 7% to 33.3Mt year-on-year.

Colombia, the fourth largest coal exporter in the world, exports nearly all of its production. Most of it is transported to the United States and Europe.

While the regulator did not indicate to Reuters the impetus for the increase, nearly all of the country’s major coal players are in the mid of mining expansions set to up output.

Colombia’s mining minister said recently that 2012 coal production in the South American country is expected to total 97Mt.

Earlier last week, it was reported that Goldman Sachs, in an effort to secure strategic port access, was top suitor in an auction for Brazilian producer Vale’s Colombian coal assets.

According to a Reuters report on Tuesday, Vale is seeking at least $US306 million, the amount it paid for the operations and facilities in 2008.

Unidentified sources said buyer interest was weak because of the high price.

Vale reportedly wants to divest the operations because they are smaller and higher-cost than those of fellow miners Cerrejon, Drummond and Glencore.

The sources said Goldman’s main attraction to Vale’s asset portfolio in the South American country was port access. It currently pays to use the Carbosans port and Vale’s harbor.

A deal adding in Vale’s share of rail transport would double its Fenoco railway capacity to 7Mt.

The source said the auction could be completed by the end of the month.

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