MPX Energia SA (MPXE3), the energy company controlled by Brazilian billionaire Eike Batista, is negotiating supply contracts to sell coal from its Colombian unit as it prepares to start production by the end of next year.
MPX is talking to possible customers in Asia, Europe and the U. S. and expects to announce the contracts in the first half of next year, Chief Executive Officer Eduardo Karrer said late yesterday in an interview in Rio de Janeiro, where the company is based. Output from its open-pit mine is set to start in the fourth quarter of 2012, he said.
We have expectations of having thermal coal of very good quality, which would guarantee us steady sales of these products in the international market, Karrer said, declining to name the companies involved in the talks. Colombia will increase its coal exports by a lot.
MPX, the only one of Batista s five publicly traded start- ups whose shares have risen in Sao Paulo trading this year, is exploring for coal in the Colombian province of La Guajira and plans to produce 35 million tons by 2020. Xstrata Plc (XTA), BHP Billiton Ltd. (BHP) and Anglo American Plc (AAL) are expanding capacity at nearby Cerrejon, the world s biggest open-pit coal mine for exports, to 40 million tons a year by 2015 as part of a $1. 3 billion investment.
Brazil, Chile Demand
MPX also plans to export its Colombian coal to Brazil and Chile, which would help integrate the Latin American economies, Karrer said. The international market is growing at a rate that can absorb the production increases, he said.
Demand for coal is rising as China and India, the world s fastest-growing major economies, produce more electricity and steel, prompting companies to increase output amid near-record prices. Energy coal may average about $130 a ton this year, up from $98 a ton last year, Morgan Stanley said July 26.
MPX gained 4 centavos, or 1. 2 percent, to close at 35. 40 reais in Sao Paulo trading yesterday. The stock has jumped 45 percent this year, compared with a 23 percent decline for Brazil s benchmark Bovespa index.
Courtesy: Bloom Berg
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