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2011 production on target despite weather: Cerrejon

TOP Colombian export producer Cerrejon is reportedly holding to its 32 million ton whole-year pro...

Donna Schmidt
2011 production on target despite weather: Cerrejon

Company president Leon Teicher, who said earlier this month he would step down from his post at the end of the year, reportedly told Dow Jones Newswires Cerrejon had produced 23 million tons through mid-September and had built back its coal inventory to about 2 million tons.

Should the intense rains continue in the coming months and cause a production drop, he added, the company should still be capable of meeting its target by pulling from inventory.

Responding to whether the rains may cause the producer to revise its output goal, Teicher told the news service “there’s always that possibility, but one has to be sufficiently flexible to adapt to those conditions”

La Nina rains caused Cerrejon production and transport issues over a few days last year, forcing an operations idle and impacting distribution, but the company used about 1 million tons from its inventory at that time to ensure supply deals would be met.

Teicher reportedly told Dow Jones the recession in the US and Europe, where it focuses its exports, had not resulted in any redirection of sales efforts toward Asian customers.

Cerrejon said last month Asia would represent about 5% of its exports in 2011, down from 10% last year. It referred at the time to US and Europe as its “natural markets”

Cerrejon is owned in equal parts by Xstrata, Anglo American and BHP Billiton. It is still continuing with an expansion plant that will increase its output to 37 million tons in 2014 and 40 million tons in 2015.

Teicher told Dow Jones Colombia’s overall output could exceed 75 million tons this year.

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