SOURCE: MPX Energia S.A.

March 27, 2008 09:25 ET

MPX Signs Two Options for the Purchase of Mining Rights in Colombia

RIO DE JANEIRO, BRAZIL--(Marketwire - March 27, 2008) - MPX Energia S.A. (BOVESPA: MPXE3), hereby informs that, in accordance with its Business Plan, it has signed two options for the purchase of mining rights in Colombia (the "Options"), a country recognized for its abundant coal reserves for energy generation purposes and with one of the lowest operating costs in the world. The total value to be paid for the Options is US$ 18 million, which will be disbursed through the next 3 years.

The Options encompass two well known thermal coal producing areas in Colombia, Cesár and La Guajira, comprising together an area of almost 58.5 thousand hectares, close to the main operating coal mines of the regions, and with potential geological resources estimated to be above 150 million tons. The coal from these regions is recognized for its outstanding quality, with calorific value normally higher than 6,000 kcal/kg (10,800 BTU/lb) and low percentages of ashes and sulfur.

Once confirming the coal availability at the estimated quantities and specifications, these areas, along with the Seival Mine, should be sufficient to meet the coal requirements of the first phase of MPX units dedicated to supply energy to the free market.

The mining rights at La Guajira region cover an area of 49,887 hectares and are located near Cerrejón mine, which is owned by a consortium formed by BHP, Anglo American and Xstrata and is currently producing around 28 million tons of coal per year. The mining rights at Cesár region, in its turn, involve an area of 8,606.6 hectares close to Pribbenow mine, operated by Drummond and with an annual production of approximately 24 million tons of coal.

In both cases there are logistic alternatives already identified for handling coal from the exploring areas to Colombians ports, which still have potential to be optimized based on existing projects for infrastructure improvement at ports and railways throughout Colombia. The overseas freight from Colombia to MPX projects are highly competitive, with average costs in line with the Company expectations. Among the next steps it can be highlighted the execution of a comprehensive survey program, the preparation of a mining plan and an environmental licensing plan, as well as detailing the necessary logistic infrastructure, thus allowing the beginning of coal exploration in time to supply MPX's thermoelectric projects, since the expectations of the Company are met.

MPX believes that it will be possible to also enlarge the coal supply also to its units dedicated to the regulated market as well as take advantage of opportunities of selling coal in the international market, maximizing its profitability through an integrated operation among its three business units: raw materials supply, the power generation units and the power trading.

MPX invites its shareholders, investors and analysts to participate in the conference call to discuss the subject:

                         Conference Call
                             English
                          March 27, 2008
                      11:00 a.m. (US-EDT)
                      12:00 p.m. (Brasília)
                    Phone: +1 (973) 935-8893
                     Access code: 41208549
                    Replay: +1 (706) 645-9291
                     Access code: 41208549

Obs: the conference call will be available only in English.
Participants should connect 10 minutes prior to the conference.

For additional information, please contact Andrea Pereira, Investor Relations Manager - Phone + 55 21 2555-5279.

Contact Information

  • Contact
    Andrea Pereira
    Investor Relations Manager
    Phone + 55 21 2555-5279