Coal production cannot increase overnight: ACM

The president of the Colombian Mining Association (ACM), Juan Camilo Nariño, said that while the rise in coal prices appears to be a sufficient incentive to increase production, this is a process that cannot happen in the short term.

Given the growing global demand for the mineral and the crisis caused by the war in Ukraine and sanctions against Russia, opportunities may arise for increased coal exports from Colombia.

“The reality of the company is that production increases depend on long-term investment, so production capacity cannot be increased overnight,” Nariño said.

However, he clarified that, on the other hand, it is possible to speed up judicial and administrative decisions that will allow to boost production in La Guajira and Cesar.

He said a rise in mineral prices benefits both the companies and the land, which is the main partner of mining activities, in a way that higher prices increase profits, rent payments and royalties.

“In the case of coal, it is important to clarify that the price increase is not reflected in the same proportion as the indicators, due to the management of medium and long-term contracts. However, we will see an increase that will benefit everyone,” the leader said.

For this year, the union expects a coal production of almost 65 million tons.

In addition, he pointed out that the rise in mineral and oil prices includes a rise in inflation affecting both industrial activities and households.

Source: El heraldo