Drummond Considers Selling Stake In Coal Business In Colombia

29th Jul 2010 19:13

BOGOTA (Dow Jones)--Alabama-based coal mining company Drummond Co. plans to sell a stake in its coal business in Colombia to raise cash for its expansion plans, a company top official said Thursday. "More than likely we will take a partner for the entirety of the operation because the operations are so integrated," Mike Tracy, Drummond's mining president, told reporters. He said the company might consider selling a majority stake in its business in Colombia. "That's totally open at this point, we are exploring all possibilities," he added. Last week, Drummond announced it had hired Bank of America Merrill Lynch to find a partner for its coal business in Colombia. Tracy declined to say how much money the partner would bring to the company. Privately held Drummond owns two of the country's largest coal mines and an export port in Colombia as well as a stake in a railway. The company expects to produce and export 23 million tons of coal this year, about 20 million from its mine Pribbenow and about 3 million from its other mine El Descanso. The company's expansion plan includes the increase of output in El Descanso to 25 million tons over the next three years. Coal is Colombia's second-largest export, following oil and processed oil products. Coal sales abroad brought in $5.42 billion last year, up from $5.04 billion in 2008. Colombia is the largest coal exporter in Latin America. Drummond is the country's second-largest producer after Carbones del Cerrejon LLC, which is jointly owned by London-listed Xstrata PLC (XTA.LN), Anglo American PLC (AAUKY, AAL.LN) and BHP Billiton (BHP, BHP.AU), each of which own 33.3%. Cerrejon expects to produce around 31 million tons this year. -By Darcy Crowe, Dow Jones Newswires; 57-1-694 00 76; [email protected] (Inti Landauro contributed to this article.) (END) Dow Jones Newswires July 29, 2010 14:13 ET (18:13 GMT)