Barely a year after acquiring its second coal mine in Colombia, U.S. investment bank Goldman Sachs is said to be mulling a quick exit from the market, driven by “operational issues” and dramatically lower prices for the commodity.
The potential mine sale, WSJ.com reports, would put an end to Goldman’s rocky involvement in raw-materials production:
Goldman has faced protests, falling coal prices, an environmental law and the Federal Reserve considering limits on the ways commercial banks can produce, store and sell raw materials, as it struggled to make the investment pay off.
It is understood that Goldman has been quietly seeking a buyer for its $3 billion Colombian Natural Resources (CNR) since it was forced to stop exporting coal in Jan. 2014 due to the country’s new environmental regulations. And while CNR resumed exporting coal via the Carbosan terminal at the publicly owned Santa Marta port in February, it is said Goldman has had enough.
According to industry insiders, mining tycoon Mick Davis has shown interest in the operation, which continued to produce coal last year without exporting it. In 2013, the CNR produced around 3.5 million tonnes of coal, about 4% of the country’s total output of around 82 million tonnes that year.
Goldman, the biggest trading firm on Wall Street, began orchestrating its exit early last year. In May 2014, the bank analysts published a report saying that, with Chinese demand for imported coal past its peak, seaborne thermal coal consumption would grow a mere 2% a year on average to 2018. This, they added, would leave coal prices too weak to generate profitable investment from new mines and infrastructure.
Late last year, Goldman unloaded all of its power plants, an aluminum-storage business and said it would also sell its uranium assets.