Goldman Sachs to sell its Colombian coal mines

4 May 2015 (Last Updated May 4th, 2015 18:30)

Goldman Sachs is reportedly planning to sell its coal mines in Columbia amid environmental problems and low coal prices.

Goldman Sachs is reportedly planning to sell its coal mines in Columbia amid environmental problems and low coal prices.

Sources were quoted by The Wall Street Journal as saying that the US firm is negotiating selling the coal mines at a loss.

The investment banking firm purchased its first Columbian coal mine, La Francia, in 2010 from Canadian Coalcorp Mining.

Goldman acquired its second mine from Vale in 2012, and operated the two mines under its Colombia Natural Resources unit.

"The US firm is negotiating selling the coal mines at a loss."

In 2010, the unit recorded revenues of $66m and its sales tripled to $200m the following year; however, the business later recorded losses of more than $200m.

Previously, environmental concerns raised by locals prompted the government to order certain companies in the region to relocate three entire villages.

La Francia mine operations were suspended in early 2013 after a sub-contractor abruptly ended its agreement.

According to Goldman's internal records, the mine's activities were suspended and all machinery was abandoned on the field.

In mid-2013, relatives of the employees blocked access to Goldman's second mine due to labour issues, forcing the company to shutdown production for nine months.

In December last year, Goldman sold its metal warehousing unit to Switzerland-based Reuben Brothers, after a drop in commodities prices.