Coal news and updates

Colombia sees coal output recovering 20% in 2021 – minister

Colombia’s coal output could recover some 20% in 2021 versus last year, Mines and Energy Minister Diego Mesa said, adding that the government expects to award enough blocks in an upcoming oil auction to meet its four-year target.

Coal is a major source of income for Colombia, where production dropped 40% in 2020 to 49.5 million tonnes – an average of just over 12 million tonnes per quarter – due to the twin crises of the coronavirus pandemic and a 91-day strike at major mine Cerrejon.

The South American country, a major world producer, saw quarterly coal production before the pandemic of close to 19 million tonnes and is now seeing output of around 13.7 million to 14 million tonnes, Mesa said in an interview with Reuters.

“We have significant growth,” Mesa said. “We’re not going to hit pre-pandemic levels yet, but we expect growth of close to 20%.”

With the first round of offers by energy companies bidding on blocks in the latest oil and gas auction due to take place on Dec. 1, Mesa said the aim is to reach the government’s target of signing 50 contracts during its four-year term, with 39 deals already agreed.

“The expectation we have is to award at least 10 to 15 areas, which was the initial objective,” Mesa said.

Colombia signed contracts for just four hydrocarbon blocks last year following a bruising year for oil and gas companies.

This year the government is offering 28 blocks in the auction, while businesses have proposed a further 25 areas for potential bids.

The minister recently held talks with the German Energy Agency (DENA) – among other European energy groups and companies – for financing a new center for investigating renewable energies.

“We signed an agreement in a memorandum of understanding with DENA to finance a renewable energy center in Colombia with a regional scope, not only for Colombia but also for other countries,” he said, without giving an investment figure.