By Decree 253 of February 1997, the Colombian government, using its powers under the economic emergency decree, has announced that it will sell its controlling interest in the coal mine known as El Cerrejón North, located in the Guajira region of northern Colombia. El Cerrejón is one of the world's larger coal mines, with an annual output of 16.5 million metric tons of bituminous thermal coal, and total reserves of some 4,600 million metric tons. The government owns a 50% interest in El Cerrejón North (through Carbocol, a state-owned corporation), with the other 50% owned by Intercor, a wholly-owned Colombian subsidiary of Exxon Corporation.
The government decreed that the sale will proceed immediately because of the urgent need to raise funds. Not only is the 50% interest in the area covered by the agreement with Intercor for sale, but additional areas of El Cerrejón holding potential coal reserves may also be sold. Furthermore, the rights to operate a port on the Caribbean coast from which the coal is shipped, and to use the land in the 150 Km railway corridor that connects the mine and the port, are also for sale.
There are no special terms and conditions applicable at the moment, but they are expected to be announced soon by the Ministry of Mines and Energy.
Luis E Nieto