Colombia

Drummond Company, Inc. and its affiliates mine coal in Colombia through an 80% ownership interest in Drummond International, LLC, a joint venture with a subsidiary of ITOCHU Corporation  formed in October 2011. Drummond International, through its subsidiaries including Drummond Ltd., owns and operates coal mining and transportation infrastructure in Colombia. Drummond Company, Inc. manages the operations of Drummond International.

During the late 1980's, a subsidiary of Drummond Company acquired the mining rights to significant coal reserves located in northern Colombia. Development commenced in the early 1990’s. The characteristics of Drummond’s Colombian coal compare favorably with those of other internationally marketed steam coals. Drummond coal is one of the lowest sulfur and ash coals currently exported from Colombia.

Drummond’s Colombian steam coal meets worldwide sulfur regulations and is also very low in NOx emissions, which is highly desirable to utility plants required to lower these emissions. In addition, Drummond affiliates market Colombian steam coal internationally to over 15 countries.

The Drummond International operation includes the Mina Pribbenow and El Descanso open-pit coal mines located in the Cesar Coal Basin near La Loma; Puerto Drummond, a deep-water ocean port on the Caribbean Sea near Santa Marta; and coal transportation and handling facilities. Drummond transports the coal from the mines 120 miles by railcar on the renovated portion of the Colombian National Railroad System and National Highway directly to Puerto Drummond, the deep-water ocean port. This port has the capability to load all sizes of vessels from handy-size up to the largest capesize.

Heavy investment in production infrastructure over the last few years has allowed Drummond to grow shipments of Colombian coal from one million tons in 1995 to 24 million tons in 2010. Enabling this growth has been the innovative use of a conveyance system and apron feeders to move coal and overburden at our Colombian mines.

Through proper management of the coal loading process, Drummond has been able to consistently produce a high quality product to world utility markets.