MPX Colombia identifies 1.74 billion tons of potential coal resources and develops an integrated mining system with capacity to produce up to 20 million tons per year.
This Business Plan contains statements and information about MPX Colombia relating to the future, which reflect the current view and/or expectations ofthe company and its management with respect to its Business Plan. Statements regarding the future include, among others, all statements denoting forecasts or projections, statements which indicate or imply results, performance and future occurrences, and may contain words such as “estimate”, “foresee”, “expect”, “envisage”, or other similar words or expressions commonly used. Such statements aresubject to a number of risks, uncertainties and premises. We hereby advise that the current Business Plan does not contain all the information that an investor should consider before investing in MPX shares and that various important factors could cause the real results to diverge significantly from the plans, objectives, expectations, estimates and intentions expressed in this Business Plan. Underno circumstances shall MPX, MPX Colombia and its subsidiaries, its board members, officers, representatives or employees be held responsible to any third parties (including investors) for decisions taken or investments or business based on information and declarations in this Business Plan, nor for any resulting or indirect losses or similar. MPX does not intend to provide any potentialshareholders with a revised version of declarations relating to the future or any analysis of the differences between these declarations and the actual results. This Business Plan should not be considered a recommendation to buy MPX shares. On buying MPX shares, potential investors should carry out their own analysis and evaluation of MPX, its businesses and activities. The information in this BusinessPlan and its contents are the property of MPX, and may not be reproduced either in whole or in part without prior written consent from MPX.
Business Plan MPX Colombia
1. Executive Summary
MPX Colombia S.A. (“MPX Colombia”), a wholly-owned subsidiary of MPX Energia S.A. (“MPX” or “Company”), was created in 2008, with a team of professional that has over 20 years of experience inthe Colombian coal industry. MPX Colombia’s activities encompass integrated coal mining operations, including production and logistics. The drilling campaign carried out until Feb/2010, with 195 boreholes reporting coal seams out of a total of 266 that have been completed and a total of 90,000 meters drilled, indicates potential resources of 1.74 billion tons of coal. The positive results achievedso far and the acquisition of a strategic site for the construction of a private port secure the development of an integrated coal mining system with an output capacity of 20 million tons per year (Mty). The system will encompass 3 open-cast mines, in Cañaverales, Papayal and San Benito, and underground mining in San Juan. Production shall begin in 2012 and, based on current resource estimates, itmight reach 15 Mty in 2021. Moreover, the Business Plan considers that with the expansion of the drilling campaign to new areas, production shall reach 20 Mty. MPX Colombia’s port (“MPX Port”), to be built in an area of 521 hectares, located at approximately 150 km from the mines, shall start operations in the end of 2013, thus covering coal production volumes expected from 2014 on. Until then,MPX Colombia should be able to export its production through an existing port in Santa Marta or Ciénaga, for which negotiations are already underway, and supply its power plants in Brazil and Chile. Logistics for mine-to-port transportation foresee two stages. The first one, in which coal will be trucked coal from the mines to the MPX Port, will accommodate up to 7 Mty in 2015. From 2016 on,...