Coal Rising to $100 Sometime in the Near Future

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With so much trouble in the northern latitudes, we’re beginning to look to the tropics for opportunity (more tomorrow). Our colleague in Buenos Aires, Horacio Pozzo, thinks he has spotted an opportunity – in Colombian coal. “Snowstorms in China (which is having its worst winter in 50 years), floods in Queensland, Australia, and energy problems in South African have affected the output of coal in these three countries, the world’s major producers of this fossil fuel, and provoked a record price last Friday,” he writes.

China counts on coal for nearly 70% of its energy, says Horacio. It’s the world’s leading producer…and its leading consumer. The country has had so much trouble getting enough coal to the right place at the right time, it has had to ration energy in 13 provinces, according to China Daily. In 2007, China was an exporter of coal. This year, it looks as though it will have to import 15 million tons.

Naturally, the price of coal has already reacted – up 73% in 2007. And, all of a sudden, the old, dirty business of coal mining has become much more profitable. Who will be the beneficiaries? Horacio is looking at Colombia. Coal exports from Colombia are known to be low in pollutants and high in energy. In 2006, Colombia was the 6th largest exporter of coal worldwide. Of course, the country has major infrastructure limitations. It will take a while to boost its exports considerably. But Chinese demand doesn’t seem to be slowing down and experts see the price of a ton of coal rising to $100 sometime in the near future. Colombian producers can take those kind of figures to the bank…

[Ed. Note: Habla espaol? Quiere ganar dinero?

Latin America is booming. And our colleagues in Buenos Aires, Argentina are well placed to help you profit from the many value opportunities south of the border. They have launched an email report service entitled Informe Moneyweek that covers both Latin American and international investment opportunities. It’s written daily in Spanish by South American market experts, Horacio Pozzo and Paola Pecora. If this is something you would be interested in, I encourage you to click here.

…and by the way, it’s free!

Until Monday,

Bill Bonner
The Daily Reckoning Australia

Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Bill Bonner

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Comments

  1. Coal can’t rise to $100 if they stop measuring it in USD, know what I mean?

    Reply
  2. Columbia as a player in the coal market? Wonder if Chavez has ulterior motives in his saber rattling toward Columbia. He may be smarter than we think.Maybe a replay of Saddam into Kuwait. Who gets to save Columbia, take a guess?

    Reply

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