By James Wellstead — Exclusive to Coal Investing News
While it rarely grabs coal market headlines, Colombia is a major coal player globally. With reserve estimates ranging between twelve and 60 billion tons, Colombia exports more than 90 percent of its production annually, sending more than 75 MT abroad in 2011. The Colombian government believes the country will play an even bigger role in coming years, with exports projected to hit 100 MT by 2015. Located on both the Atlantic and Pacific oceans, Colombia is the number one thermal coal exporter to the US, representing 75 percent of US thermal coal imports in 2010. American coal miners have long been key foreign proponents of Colombia's coal resources. Subsidiaries of US-based Drummond Company, Inc. have been developing coal since the early 1990s at the Mina Pribbenow and El Descanso open-pit coal mines located in the Cesar Coal Basin near La Loma in the northern coastal region of Colombia. But growing Chinese and Indian coal demand has also brought Colombian coal to the attention of producers looking to supply growing Asian markets. "Colombia is like the last frontier for many of these investors," mining and energy minister Mauricio Cardenas told Platts last November. More recently, Brazilian mining giants Vale (NYSE: VALE), Votorantim, and EBX Group, which belongs to Eike Batista, Brazil's richest man, have also taken stakes in the region. Mergers and acquisitions likely A key theme in coal markets in 2012 will be merger and acquisition activity, and Colombia is sure to be a part of this trend. Colombia's coal sector is currently in transition, ahead of the coming expansions within the country, as firms reshuffle their priorities.