Colombia’s largest coal producer, Cerrejon, plans to spend around 50-60 percent of a $1.3 billion expansion budget on construction and the rest on equipment, its president said on Wednesday.
The company’s plans to boost output to 40 million tonnes per year are key as the Andean country hopes to double coal output. Colombia is the world’s No. 4 coal exporter.
President Leon Teicher of Cerrejon — a joint venture between BHP Billiton, Anglo American and Xstrata — said that construction has already started and that it would go until 2013.
“Basically what we’re doing is adding another berth and another shiploader at the port. That is the bottleneck that we’re breaking,” Teicher told journalists. “Then we’re adding a substantial amount of mining equipment to mine 25 percent more tonnes (of coal) and 25 percent more waste material. We’re adding rolling stock equipment, railroad equipment and some construction along the railway line.”
Teicher said production — currently at 32 million tonnes per year — would rise to 34 million tonnes in 2013, 37 million tonnes in 2014 and 40 million tonnes in 2015. “The deposit permits it, the market wants it.” Colombia’s coal industry is dominated by major producers with their own port and rail facilities such as Cerrejon, Glencore and U.S. miner Drummond.
Cerrejon plans to build a second berth at its port with two loading points and also another shiploader with a capacity of 12,000 tonnes per hour, Teicher said. “There will be dredging. That’s an important part of the investment.” Cerrejon may decide to take on some debt to fund the expansion, although Teicher said the shareholders had the money to fund the project.
