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CCX signs letter of intent for $125m sale of Colombian coal project

February 03, 2014 - 15:52 GMT Location: São Paulo

KEYWORDS: CCX , Colombia , Yildirim Holding , EBX Group , Cañaverales , Papayal , San Juan

Coal exploration company CCX, part of Brazil’s EBX Group, has signed a letter of intent to sell its entire project in Colombia to Turkey’s Yildirim Holding for $125 million.

The deal includes the sale of open-pit mines Cañaverales and Papayal and the San Juan underground mine, as well as the associated infrastructure logistics project comprising a railway and a port, CCX said on Monday February 3.

Under the terms of a memorandum of understanding (MoU) signed in October 2013, Yildirim was expected to pay around $450 million for the whole project. Due-diligence has been conducted but no explanation was given for the large change in the value of the deal. 

The $125 million purchase price includes payment of $5 million to CCX to guarantee exclusivity in the negotiations.

The transaction is expected to be closed by the second quarter of this year, through the transfer of CCX mining rights to Yildirim, the Brazilian company said.

Located in the La Guajira region of northern Colombia, Cañaverales and Papayal have 27.3 million tonnes and 15.6 million tonnes of certified coal reserves, respectively.

Each has an estimated output capacity of 2.5 million tpy of coal.

The San Juan underground mine, meanwhile, has proven reserves of 671.8 million tonnes, of which 92% comprise high-quality pulverised coal injection (PCI) material.

The company's port concession for the development of a deep-water private port in Dibulla, La Guajira, was approved by the Colombian government in October.

Ana Paula Camargo
acamargo@steelfirst.com
Twitter: #!/ACamargo_SF

All material subject to strictly enforced copyright laws. © Euromoney Institutional Investor PLC.

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