Rio Tinto loses out
The importance of road, rail and marine facilities in moving bulk coal was driven home last month with Rio Tinto's (NYSE: RIO,ASX:RIO,LSE:RIO) $3 billion coal write-down of its Mozambique project, due in large to infrastructure concerns.
The Mozambique government's rejection of Rio Tinto's planned barge transport of coal on the Zambezi river on the basis that the river is not suitable for barge navigation has left the company with a project that is, for the most part, worthless accounting-wise.Infrastructure is becoming a major concern for coal companies with numerous large coal deposits globally “stranded” by lack of transportation. But much as lack of infrastructure destroys value, development of new transport facilities can also turn worthless coal deposits into viable and valuable projects. Rio Tinto, for example, is now studying options for building a rail line in Mozambique, according to Reuters. Below is a look at three other coal districts where infrastructure is on the build. Unlocking value from stranded coal deposits for development companies and their investors. Colombia's other coal Colombia is well known for its thermal coal production. The nation put out nearly 86 million metric tons (MT) of coal in 2011. The majority coming from mines in the north, easily shippable on the Caribbean. But the country also holds vast reserves of coal in its central departments of Santander, Boyaca, Cudinamarca and Antioquia. At the beginning of the 1900s, these areas actually represented the majority of Colombian coal production. But recently the country has languished due to a lack of access to export ports. Infrastructure development may help to change that. The Colombian government is currently pushing an aggressive infrastructure-building program—one that envisions more than $50 billion being spent across the country by 2021.