The chief asset is the El Hatillo open pit mine, which Vale previously said had an expected 2008 production of 1.8 million tonnes per annum and would ramp up to 4.5Mtpa by 2011.

The Cerro Largo project is the other major asset, which is still in the exploration phase.

Vale said the two mining concessions had potential for 500Mt of non-audited resources.

As part of the deal with Argos, Vale will also receive logistics assets, including an 8.43% stake of the Feneco consortium, which owns and operates the railroad linking the coal concessions to Rio Cordoba-SPRC port, and 100% of the concession of the SPRC port, which is on the Caribbean coast.

“Since Colombia is the world's third-largest exporter of high-quality thermal coal, given its low level of sulfur and high calorific value, Vale is seeking to build a coal asset platform in the country to enhance our growth options in the coal business,” the major Brazilian miner said upon completing the deal this week.

The final price was $5.8 million higher than what was originally announced by Vale late last year.