MAC: Mines and Communities

More "black stuff" to be dug out of Latin America

Published by MAC on 2012-02-20
Source: Business News Americas

Colombia's mines and energy minister has asked the interior ministry to start a "prior consultation process" with indigenous communities, for  development of  a Brazilian energy company's US$4  billion coal project.

However, the product won't remain within the country but be exported to Chile and Brazil.

In Brazil itself, local miners are soon expected to start mining coking coal, partly to serve  regional demand by Luxembourg-based steel giant ArcelorMittal.


Minminas tries to speed up prior consultation for US$4bn MPX coal project, startup pushed back - Colombia

By Harvey Beltrán

Business News Americas

13 February 2012

Colombia's mines and energy (Minminas) minister Mauricio Cárdenas has called on the interior ministry to start the prior consultation process with indigenous communities for the development of Brazilian energy company MPX's US$4bn coal project.

"We're calling on the interior ministry to give the order so that tomorrow, without further ado, the prior consultation process can start for the MPX coal and port project, which has been put off for a long time," Cárdenas told journalists in Bogotá.

In Colombia, MPX has the integrated Cañaverales, Papayal and San Juan mines, which have full production capacity of 35Mt/y and are located 150km from the coast. The operation will count on fully integrated logistics comprising rail transportation to deliver coal to a deepwater dedicated port capable of handling capsize vessels.

Final baselines studies are underway for the railway and port, with the preparation of the environmental impact assessments (EIAs) progressing in parallel with public meetings and community consultations, the company said last November.

"This is an essential step in the development of the mining sector but there cannot be delays. We must start the process according to what was stipulated in the original timeframe," Cárdenas said.

The thermal coal produced by MPX in Colombia will supply its power plants in Brazil and Chile, and will also be sold in the global seaborne market.

Change to Project Timeline

MPX said last year that it would start production at its Colombia coal operation at end-2012 to reach 35Mt/y by 2020. However, earlier this month MPX project manager in Colombia, Luis Cáceres, announced that the project will be delayed for at least one year due to the drop in coal prices on the international market, local press reported.

The company may start exporting coal from the Guajira department coal mines during 2014, Cáceres said.

MPX is part of the EBX group, which is owned by Brazilian tycoon Eike Batista. In January this year, Batista said he will spin-off the Colombian coal operations, known as CCX, and list shares in Bogotá and São Paulo.

CCX's mining potential is equivalent to one third of Colombian coal production in 2010 and is equivalent to three times Brazil's annual consumption.

The EBX group includes iron ore miner MMX , oil and gas firm OGX, infrastructure and logistics company LLX and port operator PortX.

Miners to start producing coking coal to supply ArcelorMittal - Brazil

By Frederico Barbosa

Business News Americas

13 February 2012

Brazil's Santa Catarina state coal mining association Siecesc expects local miners to start producing coking coal in the medium term to partially serve the demand from Luxembourg-based steel giant ArcelorMittal in that region, Siecesc CEO Ruy Hülse told BNamericas.

"Our member companies don't have the conditions to produce coking coal in the short term. But we estimate that in 3-5 years we could deliver production of 15,000-18,000t/m," Hülse said.

Last week, ArcelorMittal executives visited coal producers in the state's Criciúma municipality to evaluate the potential production of coking coal.

"Siecesc's member companies currently produce 200,000t/m of thermal coal, mainly for compatriot power company Tractebel," Hülse said.

Search for Suppliers

ArcelorMittal recently started to look for new metallurgical coal suppliers in southern Brazil, the steelmaker's press office confirmed to BNamericas.

The company is searching for coking coal with appropriate properties to use in its coke ovens and blast furnaces.

"These studies are in an early stage and involve aspects of physical and chemical quality, in addition to supply logistics," the company's press office said in an e-mail.

Vega do Sul

In late 2010, ArcelorMittal finished a second galvanizing line at its Vega do Sul galvanized steel facility in Santa Catarina, increasing production capacity by 40% to 1.4Mt/y.

However, in November the company halted the US$300mn expansion project at Vega do Sul due to market conditions.

With the third line, the facility was expected to reach an annual production capacity of 550,000t of galvanized steel and 100,000t of cold rolled steel.

"The resumption of the project will be reassessed in due course," a spokesperson told BNamericas at the time.

In the Americas, ArcelorMittal - the world's largest steelmaker - has operations in Brazil, Argentina, Mexico and Trinidad & Tobago.

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