4 Min Read
* 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]
ASIA AND THE PANAMA CANAL
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)