Peabody buys quarter interest in Paso Diablo

U.S. cola giant Peabody Energy (BTU-N) has completed its acquisition of a 25.5% satke in the Paso Diablo open-pit coal mine in Venezuela. The vendor, RAG Coal International, bagged US$32.5 million.

Paso Diablo produces 6.5 to 7.0 million tonnes coal per year, with output being exported to electricity generators and steelmakers in North America and Europe.

Peabody says that, on a pro forma basis, the 2003 earnings contribution for the 25.5 percent ownership would have been US$8 million.

“This transaction provides a good strategic fit and investment in a high-quality operation,” said Peabody CEO Irl F. Engelhardt in a release.

Paso Diablo is owned by a joint venture consisting of Carbones del Guasare (CdG), a Venezuelan government entity; Peabody; and Anglo American (AAUK-Q).

Paso Diablo is the largest of a number of coal mines that extend down the mountains to the west of Lake Maricaibo in Venezuela’s northeastern state of Zulia.

Peabody is the world’s largest private-sector coal company, with 2003 sales of 203 million tons of coal and $2.8 billion in revenues. Its coal products fuel more than 10% of all U.S. electricity and more than 2.5 percent of worldwide electricity.

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