Coal news and updates

U.S.-based Drummond said it expects coal production in Colombia this year to reach about 30 million tonnes as it increases mining even as prices remain low, its Colombia president Jose Miguel Linares said on Tuesday.

 

Colombia's second biggest coal miner produced about 26.8 million tonnes last year, up 17.5 percent from 2013. The company is seeking to boost its output even after last year's decline in prices, Linares said.

 

"Despite the low prices, Drummond has no problems and so we are looking to increase production levels," Linares told Reuters in his Bogota office. "Demand in Europe continues," he said, when asked about weak prices.

 

European API2 2015 coal closed trade on Tuesday at $63.15 per tonne, above a nine-year low on Jan. 26 of $55.60 per tonne.

 

Exports in 2015 could be higher than forecast production as the company has stocks it can use, Linares said.

 

However, a court ruling that bans the overnight use of the Fenoco coal train due to noise pollution could cut by 11.5 million tonnes the amount of the mineral miners can transport to ports on the Caribbean Sea, he said.

 

Drummond, a partner in the Fenoco railway, had begun to take measures that could help lift the restriction imposed in January by the Andean country's constitutional court, Linares said, like a reduction of contact between the rails and wagons.

 

The other operators of the railway are Glencore PLC's Prodeco unit and Goldman Sachs Group Inc affiliate Colombian Natural Resources or CNR which is a comparatively small producer.

 

Colombia's biggest coal miner, joint-venture Cerrejon, operates in a more northerly region and has its own private railway, meaning it is not affected.

 

Drummond's operations in Colombia include the open-pit mines Pribbenow and El Descanso in the northern province of Cesar.

 

Linares said the government had conceded an environmental license for the extraction of coal at its Rincon Hondo project, where it will begin the construction phase.

 

Drummond will soon complete the second phase of construction of its direct loading conveyor belt facility at its Caribbean port, allowing it to bolster installed capacity to 60 million tonnes annually.

 

Colombia is the world's fourth-biggest coal exporter, serving mainly the European market for power generation. National production in 2014 rose 3.6 percent to 88.6 million tonnes, the National Mining Agency said on Friday. 

 

 

Source: Reuters