London Mining, the UK-based developer and operator of mines to supply the global steel industry, has bought the remaining 80% stake in Colombia's International Coal Co (ICC) that it did not own for US$5.5M in cash and 3.5 million shares.
It has potential further consideration of up to US$8.5M and up to 6.3 million shares depending on the performance of the Colombian coking coal business.
London Mining expects capital expenditure of US$40M over the next 18 months.
The company said for ICC, it targeted 250 kilotonnes per annum (KTPA) of coking coal within 18 to 24 months and up to 400 KTPA of coke, with first coke production within 12 months.
London Mining says that its acquisition of ICC further supports its strategy of becoming a mid tier supplier to the steel industry and will provide it with the platform to develop a Colombian coking coal business.
The coking coal industry in Colombia is currently fragmented and under-invested, says London Mining and it believes it is one of the first well-capitalised international investors to invest in this region.
Colombia is an emerging coking coal region, with production levels at around 3 mtpa annum and estimated total reserves of 2 bt.
ICC will provide near-term coke and coking coal production, deliverable logistics solutions and scalable coking coal production.
London Mining’s acquisition of ICC will allow immediate funding of the construction of the coke ovens following detailed preparatory work already carried out by ICC.
