Goldman Sachs plans to sell its coal mines in Colombia amid environmental concerns
Goldman Sachs wants no more. The American multinational investment banking firm is reportedly planning to sell its coal mines in Columbia, and is even willing to take a loss to do so.
According to sources quoted in The Wall Street Journal, the banking firm has endured intense environmental problems from locals, previously prompting the government to order certain companies in the region to relocate three entire villages.
According to the WSJ, local women and children had formed a human blockade to protest labor issues, shutting down production.
"Certain operational issues have arisen," commodities executives reportedly said.
In addition, coal prices continue to tumble, falling more than 20 percent in three years. Another six precent decline could permanently impair the value of Goldman’s investment.
The firm’s first Columbian coal mine, La Francia, was purchased in 2010 from Canadian Coalcorp Mining; the second mine was purchased in 2012 from Vale. Goldman operated the two mines under its Colombia Natural Resources unit.
Any sale of the coal mines would mark the end of the firm’s rocky sideline as a producer of raw materials, the WSJ said.
In 2013, operations at the La Francia mine in Columbia were suspended after a subcontractor abruptly ended its agreement. According to records, the mine’s activities have been suspended and all machinery was abandoned onsite.
Goldman Sachs said it will not lose more than it invested into the coal mines in Columbia because liability is limited to the unit running the mine.
The investing firm would like to continue with the commodities business and to trade raw materials and associated financial instruments. In 2013, Goldman Sachs reported $1.5 billion revenues from its commodities operations.
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