(Many companies went to Venezuela to try their luck)
Everybody went South this year, more exactly to South America.
At least everybody who had money and a name in the coal business; coal trading, and coal mining.
The Colombians had been mining coal for generations North of Bogota as well as around Cucuta. Lately, some new discoveries had been made North of Cucuta on the Colombian side of the Perija mountains bordering Venezuela, the Serrania de Perija. And then, of course, came the project of the Century, of similar size as Armand Hammer’s, Occidental Petroleum and Island Creek’s coal project in China, the large Exxon Project at El Cerrejon.
Exxon had started this jointly with Carbocol S.A., the Colombian Government, and Elsam, the Danish Utility Company, one of the main buyers. This project was located in the Southern end of the Colombian La Guajira Desert in a district called El Cerrejon.
It was projected more than 10 years ago and was timed ready for output and production the exact moment, when the embargo was put on South African coal and coal imports from South Africa were blacklisted. Elsam was transporting the coal to Denmark in two modern cargo carriers, each loading more than 130,000 tons of coal in bulk. Now Carbocol gives allocations to most industrial nations and the output is near 10 million tons a year.
The steam coal from El Cerrejon is not of a very good quality, it is a traditional bituminous coal with medium ash contents, but it has the low sulfur content that the pollution aware Scandinavians prefer.
For the past 5 years a Dutch coal trading company, SSM Coal BV has been buying coal successfully from the Colombian Cucuta area and has been trucking the coal over the Andes Mountains and across the swamps surrounding the Lake of Maracaibo, all 300 miles to a loading port at the lake.
Fifteen years ago, the Venezuelan Ministry of Energy and Mines granted concessions for the exploration and development of the Guasare basin, located not very far from the Colombian El Cerrejon project. Deposits of coal in Guasare were first discovered in 1876. When evaluations carried out by Carbones del Zulia S.A. (Carbozulia), now a subsidiary of Pedevensa (Petroleos de Venezuela, S.A.) determined that the coal was particularly well suited for thermal applications, the development of the Guasare Project focused on producing coal for sale in the world market.
A few years ago, a joint venture comprised of Carbozulia, ACC Venezuela, a subsidiary of ARCO, and AGIPCOAL of the Italian ENI Group was formed to further develop the Guasare coal reserves for world markets.
For the past year, the Guasare project has been producing around 100,000 tons of coal per month. The coal has been trucked to a little Guajira township near El Mojan from where it goes by barges to the large vessels waiting in the Lake of Maracaibo.
The Guasare coal has a slightly better quality than the coal from the Colombian neighbor at El Cerrejon.
Lately, more concessions have been applied for, and various small mining companies have obtained concessions from the Venezuelan Ministry of Mines and Energy. Others, with concessions granted by the local State Government Organization, Zulicop S.A. have started drilling, exploring, exploiting, mining, and exporting. One of these companies, the American Interchem, from Tulsa, Oklahoma, according to rumors invested millions of dollars in Venezuela, but left the country before really making profits.
Many others followed, drawn by the promises of easily accessible concessions, mining locations, and coal seams. They were also attracted by the comparatively short trucking distance to the ports around Maracaibo, short at least, when you compared those 100 miles to the distances from Pennsylvania or Kentucky to reach a port at the U.S. East coast or around New Orleans, Louisiana.
The success stories from El Cerrejon and Guasare, cheap labor force, non-unions, low cost fuel and gas, and promises of being able to take out your profits, meant, that many U.S. mining companies looked for a prosperous future in the Venezuelan states of Zulia, Tachira, and Falcon.
One medium sized mining company had just opened a new coal mine about 120 miles from Maracaibo, South of Machiques, in the Perija Mountains, only 10 miles from the Colombian border.
The coal was plentiful and good. The trucking distance from the mine to the port was less than half the distance from Cucuta.
The other advantage was that the coal did not have to pass the border and you saved the bribes to the National Guard to let the trucks pass unharmed.
Looking at the map shows, that the Lake of Maracaibo is well located to serve world markets. There are many small ports ready to serve the loading of the coal vessels anchoring in the shallow lake. This means cost effective transportation world-wide, and another breed of merchants are looking into the means of coal transportation.
The drug merchants and the cartels are closing in on the smaller ports. What would be easier and better than to hide a ton of cocaine in the dark hulls and hatches of a cargo vessel filled with coal destined for the USA or Europe!
The Mafia was moving in position, very secretly. The black coal and the white coke would move well hand in hand – to reach overseas markets.