Company Reveals Plans for Railroad Extension for Coal Exports
CORAL SPRINGS, Florida, January 31, 2013 /PRNewswire/ --
New Colombia Resources, Inc. (OTC: NEWC) announced today its plans of a Public Private Partnership for a potential $350Million project with the Agencia Nacional de Infraestructura (ANI) of Colombia to build a railroad that will move its high quality metallurgical coal from central Colombia to export terminals on the northern coast. The Company is in talks with consultants to develop a pre-feasibility study to submit to the ANI. Once the pre-feasibility study is approved by the ANI, New Colombia Resources and its partners will own the project and commence the feasibility study. Once the feasibility study is approved, the consortium will be granted a 30 year railroad concession. "An ownership stake in a railroad should significantly increase our profit margins," stated John Campo, President of New Colombia Resources, Inc. (OTC: NEWC).
Since the Free Trade Agreement (FTA) with Colombia was approved by the United States, commerce between Colombia and the U.S. has increased creating a need for more infrastructure projects to move cargo. Shipping containers from the ports of Barranquilla and Cartagena are mostly trucked 500 miles to the capital city of Bogota with over 7 Million people. The pre-feasibility study will identify shippers, with letters of intent, that need to move cargo to and from the ports. The railroad will move coal north and assorted goods south. Fuel prices in Colombia are over $ 5/gallon; this project will not only cut costs for shippers but significantly reduce traffic congestion and emissions related pollution. Over 6 MM tonnes of cargo is shipped from central Colombia to the ports each year, 3 MM tonnes of this is coal. NEWC expects this amount to increase substantially once all the exploration projects in the area are developed.
"Central Colombia has some of the highest quality coal reserves in the world, our job is to not only get it out of the ground, but move it to the export terminals. One of the biggest problems coal companies face in Colombia is getting coal to the ports, producers in the region are trucking coal to the ports at a profit. We have identified several large multi-national companies that are exploring in our area that would benefit from this railroad." stated John Campo.
With regards to the Free Trade Agreement, the mining industry is optimistic about wielding Congress and the courts this year to push an agenda focused on expanding mining on federal lands and coal export capacity, as well as fighting EPA's greenhouse gas regulations. "There's not one corner of the Congress where we don't have strong friends," said Rich Nolan, the National Mining Association's senior vice president for government affairs. Globally, coal consumption is expected to increase 2.6 percent annually by 2017, according to the International Energy Agency's recent Medium-Term Coal Market Report. Global coal demand could reach 4.32 billion tons of oil equivalent, threatening oil as the top energy source. In comparison, oil consumption is forecast to be 4.4 billion tons. Coal names across the board have been losing steam for over a year, as the industry struggles in the face of cheaper natural gas, regulatory pressure and the global slowdown. However, signs of stabilization continue to be seen at large Coal Producing companies such as Walter Energy, Inc. (NYSE: WLT), Alpha Natural Resources, Inc. (NYSE: ANR) and Peabody Energy's (NYSE: BTU) latest financial results are providing a lift for industry shares.
Walter Energy, Inc. (NYSE: WLT) produces and exports metallurgical coal for the steel industry primarily in the United States. The company also produces thermal and industrial coal, anthracite, metallurgical coke, coal bed methane gas, and other related products. Alpha Natural Resources, Inc. (NYSE: ANR), together with its subsidiaries, engages in producing, processing, and selling steam and metallurgical coal in the United States. Peabody Energy's (NYSE: BTU) engages in the mining of coal. It mines, prepares, and sells thermal coal to electric utilities and metallurgical coal to industrial customers. The company owns interests in 30 coal mining operations located in the United States and Australia, as well as owns joint venture interest in a Venezuela mine.
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