NEW YORK, June 16, 2011 – International law firm Milbank, Tweed, Hadley & McCloy LLP, led by partners David Wolfson and Dan Bartfeld, represented ITOCHU Corporation (“ITOCHU”) in connection with its approximately $1.5 billion investment in Drummond International, LLC, a newly formed company that will be owned 80% by Drummond Company, Inc. (“Drummond”) and 20% by ITOCHU. The new company will own and operate the coal mining operations and transportation infrastructure in Colombia that are currently 100% owned by Drummond.
It is anticipated that the transaction will facilitate coal sales to growing Asian markets, and ITOCHU will have certain rights to exclusively market coal produced by Drummond International into the Japanese market. Drummond International has proven and probable reserves of approximately 2 billion tons, with current production of approximately 27 million tons per year.
“This transaction demonstrates the continued growth of Asian investment in Latin American markets, particularly in the infrastructure and natural resources sectors, and is very significant for the Japanese market,” said Mr. Wolfson.
Mr. Bartfeld added, “We are very honored that Itochu turned to us for help in this landmark transaction. Milbank is uniquely situated to advise on these kinds of transactions because of our tremendous experience in Latin America and our in-depth knowledge of the mining, natural resources and infrastructure industries.”
ITOCHU’s investment in Drummond International will help finance Drummond’s part of the capital program in Colombia which is focused on increasing coal exports. Specifically, the transaction is tied to a capital program over the next five years projected to be more than $1.3 billion, which will increase export capacity to 40-45 million tons per year.
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About Milbank’s Latin America Practice Group
Milbank’s Latin America Practice Group is one of the most successful and diverse practices in the Latin American region. Attorneys in the Group have advised clients on some of the largest and most innovative transactions in nearly every country throughout Latin America, including Argentina, Brazil, Chile, Colombia, the Dominican Republic, Mexico and Peru. The Latin America Practice Group specializes in Securities, M&A, Project Finance, Private Placements and Litigation & Arbitration.