Colombia expects to double
its annual coal output by 2019 to 145 million tonnes, but must
overcome the challenges of the economic crisis and delays in
improving its infrastructure, the government said on Thursday.
Mines and Energy Minister Hernan Martinez said the
country’s mining sector contribution to the economy should grow
6.7 percent a year after comparing the domestic industry with
the region’s mining leaders such as Chile and Peru.
“Despite the current world financial crisis and the prices
of coal, Colombia is still among the best not only in terms of
low costs but also because of its quality,” the minister told a
coal conference organized by McCloskey Group.
Colombia is among the top six producers of thermal coal,
which is sold mostly to U.S. and European markets. But its road
network, ports and cargo rail system are underdeveloped and in
some cases insufficient to meet demands of expansion projects
proposed by major exporters working in the Andean country.
Colombia’s main producers are U.S. firm Drummond and
Carbones del Cerrejon, run by BHP Billiton,
Xstrata and Anglo American.
Martinez said plans for improving infrastructure include
the construction or rebuilding 5,000 kilometers of roadway with
an investment of $560 million. Caribbean port work and the
construction and improvement of 1,300 kilometers of railway
lines for cargo are also planned.
Colombia has proven reserves of 7,000 million tonnes of
coal, but could reach as much as 17,000 million tonnes. Most of
the reserves are located in the northeast of the country in
Cesar, Guajira, Santander and Norte de Santander departments.
Global coal prices reached record levels in 2008, but along
with other commodities, prices have fallen as demand eases amid
the financial crisis battering economies across the world.
Some analysts expect world demand for thermal coal to
rebound next year. The Australian Bureau of Agricultural and
Resource Economics forecasts world trade to rise 3.3 percent to
723 million tonnes with supply expected to remain constrained.