Brazilian power company MPX Energia plans to secure coal supplies from its own sources before selling power to the free market, according to company president Eduardo Karrer.
MPX is adopting this strategy because it does not want to be exposed to fluctuating coal prices. To this end, MPX is investing in mining rights it acquired in Colombia in March.
"The only way to sell energy to the free market is to have full control of our supply chain with the entire cost structure very well defined," he said in a conference call.
The company in October returned the El Paso concession to the Colombian government because it did not find enough coal.
"We expect to record a US$1.5mn loss in the fourth quarter due to this," Karrer said.
MPX now is focused on the La Guajira area of Colombia.
"We are working hard in that area and we are moving forward as expected," Karrer said.
MPX in Brazil is developing the 720MW Porto do Pecém I, 360MW Porto do Pecém II and 360MW UTE Porto de Itaqui projects. The company already has secured PPAs in the regulated market for the three projects.
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