Colombia raises coal production target for 2021

Market: Coal
04/10/21

Colombian coal production is expected to rebound by 40pc-50pc in 2021 amid strong international prices and recovering demand in Asia, according to energy and mining minister Diego Mesa.

Colombian output could rise to 67.8mn-72.6mn t this year, from 48.4mn t in 2020, Mesa said. This would be higher than the 60mn t initially expected by the government and Colombian mining association ACM.

"In the case of coal, we are seeing increases in production close to 40pc during the first two quarters. We are also seeing an increase in the demand for coal in Asia, although we will not reach pre-pandemic levels," Mesa said.

Still, ACM said the projections are too optimistic and output is unlikely to surpass 67mn t, as the rampup of production at mines has been slower than the rise in coal prices.

Argus assessed NAR 6,000 kcal/kg coal at $60.25/t fob Puerto Bolivar at the end of last year, compared with a new record of $195/t on 1 October.

Mesa did not break out forecasts for thermal and coking coal and metallurgical coke production.

Coal producer Cerrejon is operating at full capacity regardless of global coal price increases, the firm's president Claudia Bejarano said. Cerrejon's annual exports could reach close to 24.3mn t based on January-August loadings. This would be up from 13.5mn t last year but down from 26.3mn t in 2019.

Drummond expects to produce 31.5mn-33mn t of coal in 2021, near levels achieved before the Covid-19 pandemic. The firm produced 19.7mn t in January-August.

Coal miner Colombian Natural Resources is gradually resuming production after being acquired by an investment firm. The company did not say how much it expects to produce this year, but has revealed a mining plan to produce 1.5mn-2mn t/year by 2022.

Commodities producer Glencore is handing back its titles to the Prodeco unit and it is unclear if or when a new owner will be found.

Booming metallurgic coke exports

Booming metallurgic coke exports to China and rising international demand for steel as economies recover from the pandemic have supported Colombia's metallurgic coke exports, which in turn are bolstering coking coal production.

Colombia, the world's third-largest metallurgical coke exporter, is on track to export around 3.8mn t of metallurgical coke, a record, which will require as much as 4.8mn t of coking coal production in 2021, according to a ministry of mines source.

By Diana Delgado

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