Vale Acquires Coal Assets in Colombia

Vale announced that it entered into a purchase and sale agreement to acquire 100% of the export coal assets of Cementos Argos S.A. (Argos), a Colombian cement producer, for $300 million. Located in the Cesar department, Argos coal assets consist of two mining concessions: El Hatillo, an open-pit mine, with expected 2008 production of 1.8 million metric tons (mt) of thermal coal ramping up to full capacity 4.5 million mt/y by 2011; and Cerro Largo, in the exploration stage. Together these mining concessions have potential for 500 million mt of nonaudited geological resources.

Las Cuevas deposit, part of the El Hatillo mining concession, presents the highest potential for additional resources, and Vale has agreed to make an extra payment at fixed price per metric ton of measured and indicated resources exceeding 50 million mt, after a confirmatory drilling campaign to be concluded within two years.

Argos coal logistics assets are also included in the deal.

As featured in Womp 09 Vol 01 -