Batista’s Colombia Coal Mines Sale Latest Deal as Empire Shrinks
CCX Carvao da Colombia SA (CCXC3), Batista’s coal unit, will sell its Canaverales and Papayal open-pit mines to Transwell Enterprises Inc., the company said in a Sept. 13 regulatory filing after the close of the market. Both deposits, located in La Guajira province, have an estimated production capacity of 2.5 million metric tons per year. Transwell also has agreed to use CCX’s port and railway infrastructure as part of the deal, the company said.
Batista, who was Brazil’s richest person until November, is selling assets and ceded control of some of his energy, mining and logistics ventures to raise cash amid an investor confidence crisis triggered by missed targets and ballooning debt. MMX Mineracao & Metalicos SA, the entrepreneur’s iron-ore unit, last week agreed to sell control of a port in Rio de Janeiro state to Trafigura Beheer BV and Mubadala Development Co.
Canaverales holds 27.3 million metric tons of coal reserves while Papayal’s reserves amount to 15.6 million tons, CCX said. The company is keeping full ownership of its flagship San Juan underground mine, which has 671.8 million tons in reserves, and the associated logistics project, it said.
CCX didn’t reply to an e-mail from Bloomberg News yesterday seeking comment.
San Juan Project
Batista, 56, created CCX in May 2012 through a spinoff from his power generation unit MPX Energia SA, targeting 35 million metric tons of thermal coal output by 2020 from its three mines. The company estimated in an Aug. 2012 filing that developing its San Juan project would require $5.5 billion, including costs to start production in 2017 and achieve full capacity five years after that.
Rio-based CCX, which Batista said in 2011 may be worth as much as $6 billion, has a market value of 304.5 million reais ($133.5 million) after being the last of the six units listed by the tycoon in Sao Paulo. Shares of the company gained 171 percent since reaching a record low on July 3, on speculation CCX would sell assets. On Sept. 13, the stock, which rose 14 percent, was the best performer on the Brazilian Ibovespa Small Cap index.
Batista, once worth $34.5 billion, last month agreed to relinquish control of his LLX Logistica SA logistics unit to private-equity firm EIG Global Energy Partners LLC, following a deal to share control of MPX with EON SE, Germany’s largest utility. His OGX Petroleo & Gas Participacoes SA oil business is likely to ask bondholders for more cash during debt-restructuring negotiations, to avoid filing for bankruptcy protection, Chief Executive Officer Luiz Carneiro said Sept. 12.
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