Bids for the full or part sale of privately held U.S.-headquartered miner Drummond Co’s Colombian coal operations are due by the end of next week and the firm aims to achieve $6-$8 billion for the full sale, sources close to Drummond and potential bidders said.
Drummond has been looking tentatively for a buyer for several years but said in July it had hired Bank of America Merrill Lynch to advise on a sale or the taking on of a partner.
“It’s well known that we’re looking for a full sale or a partner and that bids are due in shortly,” a source close to the company said on Thursday.
“Whether it’s a full sale or a stake or nothing at all entirely depends on what’s offered,” the source said.
Potential bidders said Drummond had indicated to them it was seeking $6-$8 billion for the full sale of its Colombian operations.
“Drummond have opened their war room and have been talking to various interested parties. They’ve indicated they want $6-$8 billion and there aren’t many companies with that kind of cash to spend,” one potential buyer said.
Potential buyers include trading and mining giant Glencore, whose Prodeco Colombian operations are adjacent to Drummonds’, Xstrata which is in Colombian coal joint venture Cerrejon with Anglo American and BHP Billiton, Vale and Rio Tinto.
Drummond, which aims to export 24 million tons of thermal coal in 2010, is Colombia’s second-largest coal exporter.
Colombia, the world’s fifth-largest global coal exporter, in 2010 began shipping extensively to Asia as well as its traditional coal markets in Europe and the United States. (Jackie Cowhig / Reuters)