SOURCE: MPX Energia S.A.

MPX ENERGIA S.A.

March 16, 2010 12:15 ET

MPX Releases MPX Colombia's Business Plan With 1.74 Billion in Potential Coal Resources and a 20 Mty Integrated Mining System

RIO DE JANEIRO, BRAZIL--(Marketwire - March 16, 2010) - In compliance with article 157 of Law # 6404/76 and with provisions of Instruction 358/02 of the Brazilian Securities Commission (Comissão de Valores Mobiliários, or "CVM"), MPX Energia S.A. ("MPX" or "the Company") (BOVESPA: MPXE3) releases to its shareholders and the market in general the Business Plan ("Business Plan") for its wholly-owned subsidiary, MPX Colombia ("MPX Colombia").

The drilling campaign carried out until Feb/2010, with 195 boreholes reporting coal seams out of a total of 266 that have been completed and a total of 90,000 meters drilled, indicates potential resources of 1.74 billion tons of coal. The positive results achieved so far and the acquisition of a strategic site for the construction of a private port set the basis for the development of an integrated coal mining system with an output capacity of 20 million tons per year (Mty).

The system will encompass 3 open-cast mines, in Cañaverales, Papayal and San Benito, and underground mining in San Juan. Production shall begin in 2012 and, based on current resource estimates, it might reach 15 Mty in 2021. Moreover, the Business Plan considers that with the expansion of the drilling campaign to new areas, production shall reach 20 Mty.

MPX Colombia's port ("MPX Port"), to be built in an area of 521 hectares, located at approximately 150 km from the mines, shall start operations in the end of 2013, thus covering coal production volumes expected from 2014 on. Until then, MPX Colombia should be able to supply its power plants in Brazil and Chile by exporting its production through an existing port in Santa Marta or Ciénaga, for which negotiations are already underway. Planned logistics for mine-to-port transportation foresee two stages. The first one, in which coal will be trucked coal from the mines to the MPX Port, will accommodate up to 7 Mty in 2015. From 2016 on, mine-to-port transportation shall be carried out through a private railway, allowing maximum output capacity to reach 20 Mty.

The aforementioned timeline already accounts for the expected time needed for environmental licensing, granting of concessions, rights of way and expropriations, if necessary.

The chart shows the planned production ramp-up of MPX Colombia's mining projects and also indicates start-up dates for logistics solutions.

To this date, 4 areas have been covered in the drilling campaign. MPX Colombia has identified a total of 1.74 billion tons of potential coal resources in such areas. MPX concessions total 66,225 ha, along 25 km of the coal bearing Cerrejon Formation, according to the report by John T. Boyd Company. In Mar/2010, John T. Boyd certified 144 million tons of reserves and resources with potential for open-cast mining. Additionally, MPX Colombia's geologists have identified 1.6 billion tons of potential coal resources for underground mining in the San Juan area.


                                                Mar/2010

RESOURCES IN SITU BY AREA                  Mt            Type
                                      ------------ ------------------
Cañaverales                                   93.8 Measured/Indicated
                                      ------------ ------------------
San Benito                                    21.9           Measured
                                      ------------ ------------------
Papayal                                       28.2           Measured
                                      ------------ ------------------
TOTAL                                        143.9
                                      ------------ ------------------
San Juan                                     1,600          Potential
                                      ------------ ------------------



RESERVES IN SITU BY AREA                            Mar/2010 (Mt)
                                                   --------------
Cañaverales                                                  27.4
                                                   --------------
San Benito                                                      -
                                                   --------------
Papayal                                                      11.7
                                                   --------------
Total (Certificated by John T. Boyd)                         39.1

  Contingent Reserves*                                       16.7

TOTAL                                                        55.8
                                                   --------------
(*) Considering the expansion of the Northen and Eastern mining
    limits of Cañaverales and Papayal.

The Business Plan as developed, uniting world-class mining assets to efficient logistics solutions, ensures a unique regional integration for MPX Colombia's system, encompassing the Colombian, Brazilian and Chilean markets. The system, as conceived, secures export capacity to MPX Colombia and allows it to capture gains of scale, with resulting increased returns. The full version of the Business Plan can be downloaded from MPX's website (http://ri.mpx.com.br).

On March 16, MPX will host a conference call to discuss the Business Plan for MPX Colombia.

Conference Call (to be held in Portuguese with simultaneous translation to
English)
March 16, 2010
1:00 PM (Brasília) / 12:00 PM (US EDT)

Participants calling from Brazil: + 55 11 4688-6361
Participants calling from US: + 1 888-700-0802
Participants calling from other countries: + 1 786-924-6977
Password: MPX

The presentation and the webcast access link will be available at MPX's website (http://ri.mpx.com.br).

Rio de Janeiro, March 15, 2010.
Eduardo Karrer
CEO and IR Officer

Contact Information

  • Investor Relations:
    Flavia Heller
    +55 21 2555-4244
    Daniel Haddad
    + 55 21 2555-4015
    Maurício Tabet
    +55 21 2555-4241
    ri.mpx@mpx.com.br
    www.mpx.com.br/ri

    Press:
    Roberto Gonzales
    +55 21 2555-4695
    +55 21 8011-0101

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