New Colombia Resources work on coal-hauling rail project

New Colombia Resources (OTCQB: NEWC) said Jan. 31 that it plans a public private partnership with the Agencia Nacional de Infraestructura (ANI) of Colombia to build a railroad that will move its metallurgical coal from central Colombia to export terminals on the northern coast.

New Colombia, which recently changed its name from VSUS Technologies, 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 and its partners will own the project and commence the feasibility study. Once the feasibility study is approved, the consortium would be granted a 30-year railroad concession.

Since the Free Trade Agreement (FTA) with Colombia was approved by the U.S, commerce between Colombia and the U.S. has increased creating a need for more infrastructure projects to move cargo, the company noted. 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. Over 6 million tonnes of cargo is shipped from central Colombia to the ports each year, 3 million tonnes of this is coal. The company said it 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. An ownership stake in a railroad should significantly increase our profit margins,” said John Campo, President of New Colombia.

New Colombia owns 100% of La Tabaquera coal mine in Colombia with an estimated 15 million-17 million tonnes of reserves, 70% of it metallurgical and 30% thermal coal. Once the necessary financing is obtained, the company plans to have three revenue producing business units in Colombia: coal mining; coking oven facilities; and docks, river, and rail transportation to export terminals in Colombia.

New Colombia plans to build or acquire wholly owned river or rail loading facilities on the Magdalena River close to its mines. The coal will be trucked to these distribution centers, and then barged via the Magdalena River or by rail to terminals in Barranquilla, Santa Marta, or Cartagena for export. After the rail projects and the “Road to the Sun” project are completed, New Colombia said it will have one of a few metallurgical coal mines in the world with river, rail, and road access to coal export terminals on both the Atlantic and Pacific oceans.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.