Glencore plans to double Colombia coal output by 2.015

Glencore's Prodeco produced 10 mln tonnes in 2010

Says $1.5 bln of $2.6 bln capital costs already spent

Expects new port to be commissioned by H1 2013

Glencore [GLEN.UL], the world's biggest commodities trader, plans to double Colombian coal output by its Prodeco unit to 20.7 million tonnes by 2015 with capital costs seen at $2.6 billion, its prospectus said.
 

Colombia, the world's No. 5 coal exporter, has seen a boom in investment, especially in the oil and mining sectors, and its high-quality thermal coal production is dominated by Glencore's Prodeco, Cerrejon and U.S. miner Drummond.

 In a 1,637-page prospectus published on Wednesday in London ahead of its planned $11 billion initial public offering this month, Glencore said it expected to have the require infrastructure to expand its Calenturitas and La Jagua mines in the first half of 2011.

 "Prodeco is going through a period of significant expansion, as coal production is planned to increase from 10 million MT (tonnes) per annum in 2010 to 19.9 million MT in 2013 and to 20.7 million MT per annum by 2015," it said.

 "This expansion (has) an estimated capital cost of approximately $2.6 billion of which approximately $1.5 billion has been spent on mining concessions, mining equipment, transport, port and other infrastructure as (end of 2010)."

 Glencore's prospectus said it hoped to tap markets in Europe and the Americas Colombia's traditional destinations for its thermal coal although the Andean nation has sent more and more material to energy-hungry Asian markets.

Glencore said that production its Calenturitas mine in the northern Cesar province would grow 161 percent to 13.6 million tonnes by 2015 compared with last year. 

The mine has a resource base of 400 million tonnes and a life of 20 years, it said.

 At its La Jagua mines, it expects production to increase 48 percent to 7.1 million tonnes this year from 4.8 million tonnes in 2010.

It has a resource base of 140 million tonnes and a life of 20 years, Glencore said. Last year, unionized workers at La Jagua struck for five weeks before a deal was reached.

 "Management foresees an increasing level of (union) membership in future years and it is likely that strike action will remain a key business risk," it said.