Drummond transport fees to help finance railroad

US coal and energy firm Drummond will fund US$35mn to finance part of a US$180mn new railroad to transport coal from its four mines in northeast Colombia's Cesar department to ports on the Atlantic coast, a mining ministry spokesperson told BNamericas. The money will come in the form of advanced payments to the state for transporting the coal along the 220km line that will link the La Loma mine in Cesar with Magdalena department's Cienaga port. Drummond says it intends to double investment in Colombia over the next four years as a result of its El Descanso discovery in Cesar, whose reserves are estimated at 900Mt of coal. According to the ministry official, the government estimates coal production will reach a record high this year with exports of 54Mt worth more than US$2bn, while Drummond forecasts its Colombian coal exports will to go from 13.5Mt in 2002 to 16Mt this year. Other major players in Colombia's coal industry include Anglo-Australian resources group BHP Billiton (NYSE: BHP), Switzerland's Glencore, London-based Anglo American (LSE: AL) and local miner and port operator Carboandes. Colombia has produced an average 38Mt/y of coal over the last 10 years, and has probable reserves of 6.66Bt plus 3.0Bt of proven reserves in different departments of the country. In 2001, Colombia achieved its last record production of 43.4Mt, and exported about 70% of that. Of exports, the US bought 19%, with 15% going to Germany and Britain and 8% to Portugal.