Brazilian miner Companhia Vale do Rio Doce (Vale) announced on December 23, that the company entered into a purchase and sale agreement to acquire hundred percent of the export coal assets of Cementos Argos S.A. (Argos), Colombia-based cement producer and one of the largest cement producers in Latin America, for US$ 300 million.
Since Colombia is the world's third largest exporter of high-quality thermal coal, given its low level of sulfur and high calorific value, Vale is seeking to build a coal asset platform in the country to enhance its growth options in the coal business.
Cesar department, Argos's coal assets, which is located in the major Colombian coal producing region, include El Hatillo, open pit mine, with expected 2008 production of 1.8 million mt of thermal coal ramping up to full capacity, and Cerro Largo, under exploration stage. Both of these mining concessions have potential for 500 million metric tons of non-audited geological resources.
Vale has agreed to make an extra payment to Las Cuevas deposit, part of the El Hatillo mining concession, 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.