Thailand?s Lanna to acquire RI coal mime

Thailand based Lanna Resources PCL is planning to acquire at least one coal mine in Indonesia this year with an approximate investment outlay of US$20 million-$30 million, a report said Saturday.

The company is also interested in investing in a coal-fired power plant in Indonesia (especially since the coal price has dropped) and an alternative-energy based power plants in Thailand.

?Last year, we operated the ethanol business or our performance would have looked worse. Therefore, we need to diversify risk as coal mining business is on downward trend and nobody knows when coal price will recover,? the company?s executive, who preferred not to disclose his name, told Dealstreetasia.com.

The company has been negotiating with some coal mining operators in Indonesia. ?We are targeting a mid-sized company, which has total reserve of 20-30 million tons. We should be able to close the deal with at least one company this year,? the source added.

?Indonesian partners have asked us to co-invest in coalfired power plants because we have our own coal mines, which will help secure the fuel for the plants. However , we have not taken any decision, yet, because it requires a huge investment,? the source added.

It also plans to form a joint venture with its prospective partner to invest around 1 billion baht ($30.86 million) in renewable energy-based power plants, in a bid to reduce the electricity cost in the company.

This year it will focus on lowering production cost and maintaining its sales in line with coal prices in the global market.

Initially, it targets to sell 5-6 million tonnes this year,similar to its sales volume in 2014. However, this depends on the global prices. If the price goes up, it will accelerate selling. On the contrary, it may reduce the production capacity if the price is down.

Lanna?s 2014 performance registered a total net profit of430.47 million baht, down 15.16 per cent from 2013. Of the net profit, 225.89million baht came from coal mining, a shrink of 39 per cent from the previous year, and 143.82 million baht from ethanol business, up 62 per cent year on year.

Lanna currently has two production and distribution coal mining bases in Indonesia. It holds 55 per cent stake in LHI mine, which has a reserve of at least 64 million tons and an annual production capacity of three million tons. Additionally, it shares 65 per cent in SGP mine, which has at least 45 million tons of reserve and a production capacity of three million tons a year. (*)