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FEATURE: Colombia mulls becoming world's top coke exporter

  • Author
  • Adriana Carvalho
  • Editor
  • Tom Balcerek
  • Commodity
  • Coal Energy Transition Metals Shipping

The Colombian coke industry expects to double its exports in the coming years and surpass China and Poland as the world top exporter.

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"If we manage to reach 10 million mt/year, we would enter the fight for that first place, in a world in which there is a demand for this product and in which we have a great advantage: our quality," said Carlos Cante, the executive president of national federation of coal producers Fenalcarbón, at the close of the International MetCoke Summit 2022, held in Barranquilla late last week.

The Latin American country exported a record 4.2 million mt of coke in 2021, behind only China and Poland, which have been fighting in recent years for the first place with coke exports of 8-9 million mt/year. Brazil, México and some European countries are the top destinations of Colombian coal, according to the federation.

Cante noted that Colombia has a variety of low-phosphorous metallurgical coal, unique in the nation's Norte de Santander region and in a specific region of China.

Several coking coal miners and metallurgical coke producers unveiled plans to lift production in the coming years while noting the potential risks regarding demand.

Carlos Parra, general manager of Milpa, the country's main coke producer, said the company is investing $50 million to increase production to 1 million mt/year, from the current 800,000 mt/year by 2025 – with two projects underway in Boyacá.

Homero Gómez, president of Carbomax, said he plans to invest $400 million to take its capacity from 450,000 mt/year to 1 million mt/year, including the expansion of its metallurgical coal operations.

"With the current national capacity of metallurgical coal (about 7-8 million my/year), we can reach 5 million mt/year of coke, but not more," Parra said. "That is why more exploration is required. However, there is still uncertainty on the part of investors."

Metallurgical coal in Colombia is produced in nearly 1,200 mines located in the Cundinamarca, Boyacá and Norte de Santander regions, where more than 10,000 coke ovens are located.

"We cannot enter the coke projects [spending] many millions of dollars if the government is going to reduce the viability," said Ricardo Blanco, president of Coquecol. He expressed concerns about recent comments made by new Colombian President Gustavo Pietro against oil and coal industries. Coquecol also plans to double its production to 800,000 mt/year with investments in productivity, research, and technology.

The head of Fenalcarbón said the sector is attentive to the growing energy transition and decarbonization goals, noting that the industry has worked on mitigating emissions. But he also expressed that both transitions will be gradual and the global industry will continue requiring coal.

Another challenging issue for the country's growth is transportation infrastructure. Gómez explained that the transport from the industries to the port is almost as expensive as the maritime freight to reach global customer destinations, reiterating the need for investments in railway and port facilities.

Barranquilla is the main port terminal for the export of Colombian coke, responsible for 80% of the shipments.

Additionally, in the context of a global recession, steel demand is falling, and along with it demand for coke. "For this reason, companies are beginning to reduce their operations in order not to have expensive inventories," Cante said. "However, demand will tend to recover and increase."

He noted that Colombia's coke exports in 2022 are expected to be just slightly below the previous year at 4 million mt.