Lanna to increase Indonesian coal production next year: Report

Thai coal miner Lanna Resources Plc plans to increase its Indonesian coal production by 500,000 tons each year in 2006 and 2007 due to rising demand from industries shifting to coal as cheaper energy amid the skyrocketing oil prices, Bangkok Post reported Wednesday.

Sihasak Arirachakaran, director of business development, said coal output would reach three million tons next year and 3.5 million in 2007. A new concession in East Kalimantan is expected to begin producing in 2007 pending negotiations.

Lanna owns 63.33 percent stake in PT Lanna Harita Indonesia (LHI), a company that operates a coalmine in Tanah Merah, near Banjarmasin, East Kalimantan. LHI has production capacity of around 2 million tons of coal per annum.

He said coal prices had recently raised by 10-15 percent after having been relatively stable for two years. The current CIF price at Si Racha port is US$50-52 per ton excluding transport costs of 260 baht per ton from the port to local users.

By comparison, oil prices have almost doubled over the past two years.

Lanna also runs domestic coal mines at Li in Lamphun but deposits are expected to be exhausted by June. (*)