Colombia to produce 80million tons of coal in 2010
Colombia to produce 80million tons of coal in 2010
Source: London Commodity News.
October 8, 2010
Colombia is on track to produce more than 80mn t of coal this year and as much as 160mn t of coal by 2020, mines and energy minister Carlos Rodado said yesterday. “Colombia is today the tenth-largest producer of coal. Colombia is an important market participant. As of now, we have a more developed thermal coal market, but we hope to further develop metallurgic coal as it has better international prices,” Rodado said in Medellin on the sidelines of a mining seminar. Colombia produced 72.1mn t of coal last year, down by 1.9pc from 2008 amid weak global demand. Colombia found fresh demand from Asia-Pacific customers such as South Korea, India and China. High demand for steel-grade Colombian coking coal from India, China and Brazil is boosting the coking coal market. But heavier than normal rain has started hitting producers, which have been forced to halt mining operations on the rainiest days. Colombia's largest coal miner Cerrejon may revise downwards this year's production and export target of 32mn t as a result of torrential rain, the company said.
International mining and infrastructure firms have expressed interest in financing the Carare railway, which aims to transport as much as 15mn t/yr of coal by 2015, Rodado says. “This is an important project, because metallurgic coal will be able to be exported from the interior of the country,” he says.
The railway project is a key initiative for coking coal miners that use trucks to transport coal over 1,000km along mountainous roads to Caribbean ports. Coking coal producers pay around $43/t to transport coal from the inland state of Cundinamarca to Barranquilla. The rail route could cut costs to about $22/t, coal federation Fenalcarbon said. The 440km railway line would originate in the coal-rich area of Lenguazaque, Cundinamarca, and run to a river terminal near the city of Barrancabermeja. Coal would then be switched to barges and shipped on the Magdalena river to coal ports near Barranquilla, where companies are developing terminals. The Magdalena river will only be able to transport a third of the 15mn t/yr after dredging is carried out. The remaining 10mn t/yr will have to travel along the Pan-American highway by truck until the govt reopens the Central Railway.
