UPDATE 3-Colombia's Cerrejon eyes 40 mln T in coal output

Tue Oct 5, 2010 2:03pm EDT

Related Topics

 * Firm says output hit by heavy rains this year
 * Cerrejon plans to invest $1 bln in expansion plans
 * Company eyes growth in Asia, South America
 (Adds details, background)
 By Javier Mozzo
 BOGOTA, Oct 5 (Reuters) - Colombia's largest coal exporter,
Cerrejon, said on Tuesday heavy rains would reduce coal output
this year and that the firm plans to expand production some 25
percent to 40 million tonnes annually by 2014.
 Colombia, the world's No. 5 coal exporter, has seen a
five-fold increase in foreign investment, especially in oil and
mining, since 2002 due to the country's U.S.-backed offensive
that pushed leftist rebels to remote jungle hideouts.
 "We have expansion projects for the short term and we are
evaluating an expansion to 40 million tonnes, a 25 percent
growth in production and exports," Cerrejon President Leon
Teicher told a conference in the nation's capital, Bogota.
 Teicher said that the firm planned to invest about $1
billion for the expansion and he hoped to have shareholder
approval by the first half of 2011 at which time the company
would start expanding its existing operations.
 When asked if strong rains would have an impact on
production and exports this year, Teicher said: "Strongly." He
did not give further details. The Andean nation has been
battered by heavy rains since June.
 The joint venture, owned equally by BHP Billiton (BLT.L),
Anglo American (AAL.L) and Xstrata XTA.L, has said it expects
to export around 32 million tonnes this year from 30.3 million
tonnes in 2009.
  Graphic on Cerrejon's exports:
  For a Factbox on Cerrejon: [ID:nN05192802]
  Take a Look on Colombia's coal: [ID:nN17159080]
 European utilities and Colombian coal industry sources have
said that heavy rains in Colombia had slowed mining and caused
shipment delays but a fall in Asian demand has limited the
market impact. [ID:nLDE6880VG]
 Colombia's coal exports are just behind world leaders
Indonesia and Australia and it is ranked almost equally with
Russia and South Africa.
 Cerrejon's mining operations are in La Guajira state in
northeast Colombia. Europe makes up more than half of the
company's coal exports, according to the firm's website.
 Teicher said that Europe and the United States remained the
company's principal clients but that interest from Asia and
other South American nations was becoming more and more
important for the firm's exports.
 China's appetite for coal has meant better sales for
exports from Colombia which is a long route from the Asian
giant, although the composition of the Latin American nation's
exports are not expected to change drastically, players say.
 Teicher said that plans to expand and deepen the Panama
Canal, enabling larger bulk vessels to move commodities into
the Pacific markets, would not be a "critical variable" for the
company but it would be important.
  (Writing by Jack Kimball; editing by Jim Marshall)