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Xstrata Looks to Acquire Colombian Coal Miner

By Joel ScanlonJan 10 2011

A bid of $8 billion is expected from Xstrata for Drummond’s Colombian thermal coal arm. The Anglo Swiss mining giant is interested in the company which is the second largest coal mining company of Colombia. It is owned by a family business based in Alabama.

Considering that floods in Queensland in Australia have shut down its major coal production in the country the company is looking for alternatives to generate both thermal and coking coal. Prices have surged for both and Xstrata will not want to be left out. Coal prices have seen a 10% hike in the past month alone.

Other mining giants such as Vale from Brazil and the multinational Rio Tinto were also courting the Colombian coal producer but only Xstrata had managed to table a fully financed offer by the deadline given last month.

The timeframe of the auction has been extended by the Bank of America-Merrill Lynch to allow Vedanta Resources and Essar Global, an Indian company time to arrange for financing. The companies have struggled to get the financing so far and Xstrata is the most likely amongst the courters to secure the deal. It would be the first big acquisition for the company after the recession if it succeeds.

Written by

Joel Scanlon

Joel relocated to Australia in 1995 from the United Kingdom and spent five years working in the mining industry as an exploration geotechnician. His role involved utilizing GIS mapping and CAD software. Upon transitioning to the North Coast of NSW, Australia, Joel embarked on a career as a graphic designer at a well-known consultancy firm. Subsequently, he established a successful web services business catering to companies across the eastern seaboard of Australia. It was during this time that he conceived and launched News-Medical.Net. Joel has been an integral part of AZoNetwork since its inception in 2000. Joel possesses a keen interest in exploring the boundaries of technology, comprehending its potential impact on society, and actively engaging with AI-driven solutions and advancements.

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