Despite a number of challenges ranging from abnormally dry weather to a strengthening domestic currency and a months-long shutdown at one of the country’s largest coal producers, Colombia’s Ministry of Mines and Energy is still predicting coal output to grow by 4% this year to 89.1 million t.
Coal production: back to 2012
According to Reuters, this would bring the country’s coal production back to the level seen in 2012, before labour disputes hit output last year. The country’s largest coal producer, Cerrejon, lost a month’s production in a strike, while number two producer, Drummond, lost 53 days in July and August. Cerrejon produced 33 million t in 2013, down from the 34.6 million t produced in 2012.
Despite the bullish forecasts for this year, the country faces a number of challenges to boosting its coal production. Mines in the northern La Guajira Province could be forced to close should the El Nino weather pattern causes longer-than-usual dry spell, raising dust levels above statutory limits.
Coal costs and competition
The country also faces competition from the US, whose coal is now competing with Colombia’s on the international markets, while a strengthening local currency is pushing up the cost of Colombian coal at a time when prices are falling in Europe – the traditional destination for Colombian coal. European coal prices has dropped 15% this year with contracts for June delivered to Amsterdam, Rotterdam and Antwerp trading at US$ 73.25/t.
Edited from various sources by Jonathan Rowland
Read the article online at: https://www.worldcoal.com/coal/16052014/colombia_targets_rising_coal_output_coal853/