Drummond Co. Inc. said in a Feb. 21 statement that it welcomes executives of Japan’s ITOCHU Corp. that have relocated to Drummond’s home state of Alabama to help administer ITOCHU’s new stake in Drummond’s coal mining operations in Colombia.
Drummond and affiliates reached a final agreement in October 2011 with ITOCHU on a partnership where Drummond now owns 80% and ITOCHU owns 20% of a new entity, Drummond International LLC, which owns and operates the Colombian coal mining operations and transportation infrastructure. These operations ship heavily into the Gulf and Atlantic coast steam market in the U.S.
ITOCHU now owns 20% of the Colombia operations through a new subsidiary, ITOCHU Coal Americas Inc. (ICA), which is based in Birmingham, Ala. Drummond welcomed ICA to the Birmingham area and its executives: Kazuo Inagaki, President and CEO; Kotaro Suzuki, Executive Vice President Business Development and Marketing; and Takashi Hanaki, CFO. ICA's headquarters is located at 1000 Urban Center Drive, Suite 660, Birmingham, Ala. 35242.
When it announced this deal in June 2011, Drummond said that ITOCHU’s investment in Drummond International will help finance Drummond’s portion of its ongoing capital program in Colombia to expand production. This transaction is tied to a capital program in Colombia over the next five years projected to be over $1.3 bn. This capital program is expected to include the purchase of more efficient mining equipment along with construction of a new direct-loading port mandated by a decree of the Colombian government which will increase export capacity to 40 million to 45 million tons per year. Drummond said at the time that it also believes that this partnership will facilitate the further opening of Asian coal markets to exports from Colombia. Current production at the time of the announcement was about 27 million tons per year.
Founded in 1935, Drummond Co. is a privately-held company that is principally engaged in the business of mining, purchasing, processing and selling of both thermal and metallurgical coal. It also has coal mining operations in Alabama. Drummond is also the largest merchant coke producer in the U.S. and engages in real estate development.