ANGLO American, Xstrata and BHP Billiton have approved a $1.3bn (£789m) expansion of the Cerrejon mine, home to one of the world’s largest coal deposits, in Colombia.
The diversified miners said yesterday they would invest equal amounts in the project that will increase production and export capacity by 8m tonnes per annum (mtpa) to 40 mtpa by the end of 2015.
Construction is set to start in the third quarter and be completed by 2013. The project will expand the mine, coal handling facilities and the port.
Cerrejon contains an estimated 5bn tonnes of coal, of which 2.1bn tonnes are at a measured and indicated export quality status.
Last year, Cerrejon exported 31.5m tonnes but produced only 30.3m tonnes due to heavy rains that battered the nation.
“Today’s announcement highlights our commitment to invest in growth throughout the cycle and to continue to produce at maximum volumes to take advantage of the strong demand for energy coal,” said BHP energy coal president Jimmy Wilson.
Cerrejon president Leon Teicher said in an interview that he hoped the 32m tonne exports would fetch the firm $3.2bn this year.
“We have almost all the 2011 production sold, and external prices are high. For 2012, we don’t see a substantial fall in prices,” he said yesterday.
FAST FACTS | COLOMBIAN COAL
● Colombia's coal industry is currently dominated by big thermal producers such as Cerrejon, Glencore and Drummond.
● Cerrejon, owned by BHP, Anglo American and Xstrata, exported 31.5m tonnes last year
City A.M. Reporter