Thai Banpu aims to acquire coal mine in Indonesia

Thailand?s top coal miner Banpu aims to buy at least one coal mine near its existing operations at Kalimantan in Indonesia later this year in a bid to save costs and boost earnings growth, The Jakarta Globe reported Friday.

No further details about the acquisition plan were provided.

Banpu, which has coal mines in Indonesia, Australia and China and had diversified into the power business, planned to invest US$390 million in 2016, mostly for its Hongsa coal-fired power plant in Laos, Chief Executive Somruedee Chaimongkol told reporters.

Banpu expected to return to net profit this year due to rising profits from the 40 percent-owned Hongsa power plant, which will be fully operational in March, she said. The firm posted a net loss of 1.5 billion baht ($42.06 million) in 2015, hit by weaker coal prices.

It expected to book profit of $70 million from the1800-megawatt Hongsa power plant in 2016, Somruedee said.

The firm is targetting coal output of 46.1 million tons this year, mostly from Indonesian mines, while coal prices have bottomed out and are expected to recover, she said adding global prices had risen to $52 a tonne from an average $49 last year.

Coal contributed about 90 percent of 2015 sales and 50percent of profit, with the rest from the power business. The power business is expected to generate more cash flow to 30-35 percent of core earnings this year from 20 percent last year, she said. (*)