Colombia s Non-Traditional Coal Areas

Transcription

1 Colombia s Non-Traditional Coal Areas Carlos F. Barrera Managing Director South America John T. Boyd Company

2 Our Company International Mining and Geological Consultants John T. Boyd Company Denver Pittsburgh Beijing Bogota Chennai Brisbane BOYD Locations Internacional Experience

3 BOYD SERVICES Coal, Minerals, Natural Gas Financial Valuations Mergers and Acquisitions IPO and Technical Reviews Feasibility Studies Reserves and Mine Planning Expert Witness Market Studies Asset Appraisals Contract Evaluations Environmental Exploration and Geology Geotechnical GIS Applications Management Consulting Material Handling and Beneficiation Natural Gas Privatization and Restructuring Transportation Analysis

4 Colombia Work History Continuous and Extensive Work History (1979 Present) Colombian Coal Industry Profile Map To receive a complimentary copy, contact: Colombiamap@jtboyd.com or cbarrera@jtboyd.com

5 Recent Work

6 Improving Conditions and Understanding Servicio Geologico Colombiano (SGC) Contracted two Colombian consortiums for geological mapping 1:100,000 of 108,000 Km2 in 15 months. Group 1: Cesar, Santanders, Arauca, Bolivar, Casanare Departments Group 2: Meta, Huila, Guaviare, Caquetá Departments JOHN T. BOYD designated technical auditors

7 Improving Conditions and Understanding Improving Conditions for Investors Institutional Structure Social & Government Environmental legal / Take Regulatory Framework Mineral Endowment Available Human Resource Infrastructure Incentives IRR Investor Mapping Success Stories

8 Improving Conditions and Understanding Standards of Competence for Mine Rescue Operations (UG) REPORT NUMBER 1 2 REPORT NAME Standards for mines rescue personnel in underground mines. Training courses to provide knowledge and performance levels for Mine Rescue personnel in underground mines. COMPLETE REPORT NAME Standards for mines rescue personnel to be measured against and maintain for underground mines. Training courses to assist and be part of providing the knowledge and performance levels a mine rescue worker requires to fit within a competency framework (Standard, Training, Guidelines and record of competence) to be used in underground mines OBJECTIVE Standards Designed to be a measure of the minimum competence required Training Will provide part of the route to Competency TOPICS Standards are detailed job descriptions that provide a framework of competency. Competence is achieved by a combination of: Skills Experience Knowledge Attitude Training The standards provide the focus for the training to achieve its goals. Training allows trainee to obtain a combination of: Skills Knowledge Performance 3 Guidelines to execute Mine Rescue operations in underground mines. Guidelines to understand and execute why and how mines rescue operations in underground mines are undertaken at an acceptable risk level Guidelines Theoretical basis of knowledge to be implemented Knowledge is what is required to carry out a job Performance is how the knowledge is used effectively in the workplace Procedures & Equipment for Mine Rescue Actions

9 The Coal Sector

10 Projects of National Interes (PIN) 24 Carbon (coal) concessions designated o Minas Paz Del Rio ( Boyaca) only concession not in La Guajira or Cesar 32 Mt La Guajira 32.6 Mt (2016) from four Cerrejon PIN concessions. o +20% projected capacity expansion by Cerrejon and Cañaverales to 42 Mt by Mt Cesar 48.2 Mt (2016) from PIN concessions. o +40% projected capacity expansion to 65 Mt by 2020, driven primarily through Drummond (El Descanso). Combined: ~ 90% of existing production 2016 Drummond surpassed Cerrejon in Production

11 Production Growth Opportunities Projected potential increases from Colombian PIN projects ~ + 30 Mt through 2020 (120 Mt by 2020) Stated Objective: 140 Mt by 2020 Openpit sub-bituminous Cordoba UG opportunities in Cesar, La Guajira Interior: Boyacá 3.1Mt Cundinamarca 2.4Mt Norte Santander 2.1Mt Santander 0.1Mt Antioquia 0.1Mt Source: Ministry of Mines Colombia/Various Industry Sources

12 Development Obstacles Modifying Factors associated with Colombian Interior: - Complex geologic conditions. - Low productivity (thin seams, faulting, steep gradients, underground mining). - Fragmented concession and surface ownership status. - Rugged surface topography with difficult access. - Limited and high cost transportation (infrastructure).

13 Unrealistic Expectations Typical Colombian Interior Resource/Reserve Estimates * Do not conform with international standards for technical reporting. Inferred * Speculative utilize extrapolation rather than interpolation. * Continuity, thickness and quality down-dip are unknown. * Lack feasibility analysis (mine planning). * In-situ resource tonnages are often misidentified as reserves. Indicated No down-dip exploration Measured Outcrop with drift mine access

14 Resource Reporting Standards Colombian Institute of Geology and Mining Ingeominas Data Spacing Measured = < 250 meters Indicated = 250 to 750 meters Inferred = 750 to 2,250 meters Hypothetical = > 2,250 meters Committee For Mineral Reserves International Reporting Standards * Competent Person Evaluation / Review * Data Spacing based on geologic complexity. * Defined by exploration results. * Requires an expectation of eventual economic extraction. * Consideration of Modifying Factors: [mining, metallurgical, economic, marketing, legal, environmental, social and governmental]

15 Interior Summary Boyacá and Cundinamarca (coking/thermal) Vast majority underground. Continued development of semimechanized operations. 0.3 to 0.6 Mtpa ( ). PIN Minas Paz Del Rio (large scale LW) Growth Drivers: Continued UG mechanization Barging Central Rail Improved highway system Improved environmental licensing

16 Interior Summary The Santanders (Coking + thermal + PCI): Continuous Miner and/or shortwall mining applications (mechanization). Improved open-pit production. Drivers: Continued Mechanization Barging/rail Improved highway systems. Venezuela Ports (PCI growth) Security (Norte)

17 International Experiences PRC Internal Planning ( ) Over 16,000 mines have been closed to-date. Increased productivity targets. Improved worker safety standards. Continued small-mine closure and consolidation mandates. Mechanization of new and existing undergound production capacity.

18 International Experiences Applicable PRC mechanization for Colombian coking coal deposits Thin Seam Mining (< 1.3 m thickness) 20% of PRC Reserves Con-Mech LW (as low as 0.5 m) Thin seam FM LW mining (as low as 0.5 m) Steep gradient FM LW mining (30 to +60 degrees) LW: Longwall FM: Fully Mechanized

19 Thin-Seam Mining Con Mech LW Widely used in less favorable geology LW faces typically 120 m wide Coal cutting with shearer or drill/blast Advantages Minimal CapEx ($ Million USD) Flexible Variable seam thickness Maneuverability with Faulting Adjustable to seam gradient Uncomplicated face relocation Disadvantages Labor intensive -- Low productivity ( Mtpa / face)

20 Thin-Seam Mining FM LW Requires more favorable geology (less faulting) International Experiences Modest CapEx ($ Million USD) Typical Production ( Mtpa / face) FM LW ( m thickness).

21 International Experiences Steep-seam Mining Notable Success Sichuan Province Face length: FM 120 m Seam gradient: 60 degrees Face output capacity (x2 faces): 0.5 Mtpa (2.0 m) 0.3 Mtpa (1.3 m) Staffing: ~500 in total Obstacles Overcome Difficult personnel movement. LW face set-up and relocation. Equipment movement during operation. Face and shield advancement. Irregular roof caving. Coal loading at headgate.

22 Stages of Coal Deposit Development Implementation of new mining methods and mechanization requires a defined development strategy to prove mine planning is technically achievable and economically viable.

23 John T. Boyd Company Mining and Geological Consultants United States - Canonsburg (Headquarters) 4000 Town Center Blvd., Suite 300 Canonsburg, PA 15317, USA jtboydd@jtboyd.com United States - Denver, Colorado th Street, Suite 710S, Denver, CO 80202, USA jtboydd@jtboyd.com Colombia - Bogota jtboydcol@jtboyd.com Australia - Brisbane Level 11, 388 Queen Street, Brisbane, QLD 4000, Australia China - Beijing Suite 504, F/5, Sunjoy Mansion, No.6 RiTan Road, Chaoyang Dist. Beijing , China jtboydcn@jtboyd.com Thank You John T. Boyd Company mining and geological consultants Pittsburgh Colombia - Denver - Australia China - Bogota 2017