Colombia has a relatively small proportion of the world’s proven coal reserves. World hard coal reserves have been estimated at 411,321 million t, while those of Colombia are an estimated 6434 million t, or less than 2% of the world’s reserves. In terms of world mining statistics, a similar story emerges: world hard coal production in 2009 was 5990 million t. In the same year, Colombia produced 73 million t, or 1.22% of the total. In terms of world coal trade, however, Colombia is a far more important player: in 2009, total world exports were 836 million t, while Colombia exported 69 million t, or 8.25% of the total, placing it fourth on the league table.
Coal is widespread in Colombia, with a wide range of rank and quality from lignite to anthracite, including met coals. Geological structures can be complex: folding, faulting and overthrusting, with consequent repetition of seams that may result in multiple seam sites with seams up to 7 m or more in thickness and amenable to opencast operations. In less favourable conditions, seams are thinner and more widely separated by interburden and at best are amenable to underground mining.
Coal production is dominated by thermal coal production from the Eocene Cerrejón formation in the Guajira department and the Palaeocene and Lower Eocene Los Cuervos formation in the Cesar department. Favourable geological conditions, have been factors in the development of world class, low operating cost, opencast mines in these areas.
Colombian mining costs for thermal coals from these mines are competitive with those of Indonesia and Australia, amongst other low cost producers.
The main producer in the Guajira department is the Cerrejón mine, owned and operated by a consortium of BHP Billiton, Anglo American and Xstrata. The surface mineable reserves for the current contract are reported to be 330 million t, with total proven reserves to a depth of 300 m reported to be 3000 million t. Total production in 2009 from the Cerrejón basin, as reported by the Colombian Institute of Geology and Mining, Ingeominas, was 31.4 million t. Production from the mine is transported by rail to Puerto Bolívar on the Caribbean for export.
In Cesar, the largest producer is the La Loma (Pribbenow) mine, owned and operated by Drummond, which has also recently begun operations on the Descanso mine. Adjacent mines include La Francia (Goldman Sachs), Calenturitas (Prodeco/Glencore International), and El Hatillo (Vale).
In 2009, Drummond production at La Loma and at Descanso was 18.4 million t and 2.2 million t respectively, while the total production from the department of Cesar was 34 million t.
Colombia’s coal exports are a low ash, low sulphur thermal coal, the benchmark calorific value (CV) from Puerto Bolívar being 11,300 Btu/lb. The International Energy Agency in the Key World Energy Statistics for 2010 has expressed the energy values in thermal coals for the world’s top 10 producers in terms of tonnes of oil equivalent (toe) for 2009. Colombian coals, at 0.65 toe/t, rank second only to Australian coals (0.69 toe/t).
The main infrastructure in place for transport to and at the exporting terminals is currently undergoing expansion and revision. The bulk of coal from the main export producing regions in the northeast of the country is transported by rail, whereas the smaller producers in the centre and centre east of the country use road.
Production from the Cerrejón mine is transported north by rail to Puerto Bolívar on the Caribbean coast. Transportation from the Cesar coalfield use part of the Fenoco (Ferrocarriles del Norte de Colombia S.A.) network northwest to Santa Marta also on the Caribbean coast.
Following representations by a group of local coal producers, ownership of the Fenoco railroad has recently changed as a number of producers, including Coalcorp, Caribe (Vale) and Prodeco, have purchased stakes in the rail line. This has enabled producers other than Drummond, which previously used the full capacity of the railroad, to access the railway to transport coal north to Santa Marta.
The Colombian Government has expressed opposition to barge loading operations in Santa Marta and new ports are being planned to replace existing port capacity. As a result, a consortium of coal mining companies, led by Prodeco, is planning to construct Puerto Nuevo, a new, multi-user, direct ship-loading port facility at Ciénaga on the Caribbean coast linked into the Fenoco railroad system. The capacity at Puerto Nuevo is planned to be in excess of 30 million tpa.
Existing port facilities in Santa Marta include those operated by the mining companies and the publicly owned port at Carbosan, which is planning the addition of rail access to the port. Plans are also underway for construction of a new direct loading facility at Puerto Drummond to replace the existing barge loading operations.
Current work on widening the Panama Canal, planned for completion in 2014, is seen as a key opportunity to increase the thermal coal exports to the Pacific market as it would allow capesize vessels to avoid travelling around the Cape of Good Hope, saving a significant number of days travelling time. Historically, Colombia has been dominant in the Atlantic coal trade, serving both the eastern seaboard of the US and European markets. There has been a recent shift in world trade: coal from the Richards Bay coal terminal in South Africa, which previously competed with Colombian coals in Europe, has been diverted to Asian markets, while Colombian coal now competes with Russian coal in Europe. Exports to the US have also declined, while South America and Asia are growing in importance as markets.
Security in Colombia improved significantly under the regime of the previous president, Alvaro Uribe, and the country’s stability, fiscal and tax structures are viewed as favourable for foreign investment in mining. The coal industry is an important contributor to the economy of the country and is recognised as such.
This article is adapted from February’s regional report. Subscribers can log in here to read the full article.
Read the article online at: https://www.worldcoal.com/coal/10022011/coal_in_colombia/