Expansion of Cerrejon Coal: BHP to spend US$437 million

BHP Billiton today announced approval of a US$437 million (BHP Billiton share) investment to expand the Cerrejon Coal mine in La Guajira, Colombia.

BHP Billiton’s investment represents one third of the US$1,311 million expansion to be undertaken by Cerrejon Coal, with joint venture partners Anglo American and Xstrata contributing equal investment in the project.

The expansion, known as the P40 Project, will enable Cerrejon Coal’s saleable thermal coal production to increase by 8 million tonnes per annum (mtpa) to approximately 40mtpa.

Construction will commence in the 2011 calendar year with completion expected in the 2013 calendar year. Ramp up to expanded capacity of 40mtpa is expected by the end of the 2015 calendar year.
The expansion project will see BHP Billiton’s estimated share of production and sales from this long life, tier 1 asset increase from 10.7mtpa to 13.3mtpa.

BHP Billiton Energy Coal President, Jimmy Wilson, said: “Today’s announcement highlights our commitment to invest in growth throughout the cycle and to continue to produce at maximum volumes to take advantage of the strong demand for energy coal.”

The project scope includes a second berth and dual quadrant shiploader at Cerrejon’s 100 percent owned and operated Puerto Bolivar, along with necessary mine, rail and associated supply chain infrastructure.
BHP Billiton owns 33.3 percent of Cerrejon Coal in equal portion with joint venture partners Anglo American and Xstrata.