Global energy trader Vitol has signed a four-year deal to take 1 million tonnes of export capacity at Colombia's 3 million tonnes a year Carbonsan port in Santa Marta, sources familiar with the deal said on Monday.
Vitol has been seeking coal mining and logistical assets in key exporting countries for the past several years.
Colombia is the world's fifth-largest coal exporter and ships around 61 million tonnes of thermal coal a year to Europe, the United States. and increasingly to Asia.
Colombian coal producer Coalcorp Mining Inc (CCJ.TO) is still for sale despite agreeing to sell its La Francia mine to a to a Goldman Sachs Group (GS.N) subsidiary in a deal worth $200 million [ID:nSGE6060ED], the sources said.
The Goldman sale may not be concluded and other potential buyers are still circling, including Vitol and traders Glencore, the sources said.
"If I was Goldman, I wouldn't be happy about buying a mine on the assumption that there's port access and now there isn't any," a Colombian industry source said.
"The Vitol deal is a take-or-pay contract and it'd be difficult to fill that capacity without coal from Goldman," the source said.
Coalcorp's mine assets would be difficult to run profitably without deep experience of Colombian coal industry and strong logistics, they said.
The La Francia mine will be difficult to develop because it its reserves are a few kilometres from a town and the coal quality is below original expectations, they added.
Coal from the Caypa mine is high-quality but the production is small and needs to be blended with other coals.
The company said in a statement on its website on Jan. 21 there would be a special shareholders' meeting on Feb. 11 to discuss the Goldman deal and subject it to a vote.
Coalcorp exports via Carbosan in Santa Marta. If the Goldman deal is concluded, Goldman will have to negotiate use of the Santa Marta port with Vitol, the sources said.
As part of the deal, Coalcorp will supply about 2.4 million tonnes a year of thermal coal to Goldman.
Goldman is one of the banks which have become significant players in physical coal trading. The majority of Constellation Energy Group's (CEG.N) physical coal traders joined Goldman when Constellation sold its London-based commodity business to Goldman last year.
Source: Reuters
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