MPX Energia SA an energy company controlled by Brazilian billionaire Eike Batista will invest USD 1.9 billion over a decade to tap Colombian coal deposits and meet rising electricity demand in other South American nations.

Rio de Janeiro based MPX in filing to the Brazilian securities regulator said that mine projects near the Colombian cities of Canaverales, Papayal and San Benito will start in 2012 and produce 15 million metric tons of coal a year by 2021. The projects have potential resources of 1.74 billion tons of coal.

MPX plans to ship some of the coal to Brazil and Chile to fuel electricity plants. BHP Billiton Ltd, Anglo American Plc and Xstrata Plc also tap coal reserves in Colombia, where President Alvaro Uribe has lured international investments in mines and oil fields by repelling guerilla groups and boosting infrastructure security since 2002. He leaves office in August.

Mr Eduardo Karrer CEO of MPX Energia SA said that the Brazilian company may seek a partner to develop its Colombian coal projects. He said that “We have more good projects than our capacity to invest.”

MPX is in negotiations to use the existing Colombian ports of Santa Marta and Cienaga to ship coal until its new port starts operating. MPX will open its own port in late 2013 to export from Colombia, where it is exploring for more coal deposits.

MPX is tapping coal reserves in the La Guajira province, where the Cerrejon mine is also located. BHP, Anglo American and Xstrata each own a third of Cerrejon, the world’s largest open- pit coal mine, which will produce as much as 32 million tons this year.

(Sourced from Bloomberg)