Banpu caters to growing demand in Asia

The company operates five coal mines with annual production capacity of 30 million tonnes in Indonesia, the key source of its output to support coal demand in that nation and in other Asean countries, said chief executive officer Chanin Vongkusolkit.
Banpu’s annual revenue from selling the coal it mines at the five Indonesian sites is US$2.3 billion-2.5 billion (Bt72 billion-Bt78.3 billion).
Chanin said India, the Philippines and Vietnam are interesting markets because they are undergoing reforms after suffering slowdowns in the past few years.
Banpu sells 3 million tonnes of coal a year to India and 2.3 million tonnes a year in the Philippines. Both countries are existing markets of Banpu.
The company is negotiating deals with electricity generators in Vietnam to supply coal over there, he said.
Chanin said coal is a key energy resource for all three countries. India is developing its energy infrastructure in a bid to boost its economy.
India imports 100 million tonnes of coal a year from Indonesia. Banpu expects India will increase the volume to 300 million tonnes in the near future to support its growing demand for electricity.
In the Philippines, Chanin noted that even though this country has many coal-fired power plants, the number is not sufficient for the long term, as the country’s growth is accelerating after suffering a slowdown in the past few years. To support this rapid growth, the Philippines needs to import coal to produce electricity.
He said that Vietnam has become a focus for Banpu as its government has allowed coal imports to generate power in a bid to increase electricity revenue. The country is attempting to revive its economy after a period of downturn following overheating. To adjust electricity fees to support growth, Vietnam will have high demand for coal, Chanin said.
The three countries will be bright markets for Banpu aside from Indonesia, where the company now has coal reserves of 400 million tonnes.
The company will not yet inject new investment into its coal operations, as the concession term in Indonesia has 13 years left to go.
Coal sales in 10 countries account for 90 per cent of the firm’s revenue, and the remaining 10 per cent is from the Thai market.
Chanin said that relying solely on coal is too risky. Therefore, it has to consider investment in renewable energy such as wind power.
The company is carefully conducting feasibility studies in renewable energy – both investment through acquisitions, and joint ventures.
“It might be too early to talk about this investment but over the next five to seven years, Banpu will have alternative-power projects in its portfolio,” he said. Chanin last week joined Bangkok Bank at the bank’s Medan branch opening. At the event, he discussed how to invest in Indonesia with mid-sized BBL custom
ers.
Banpu began investing in coal mines in Indonesia in 1991 and is now the biggest Thai investor in the country in terms of investment value. Indonesia is the company’s main source of coal. Banpu is the second-largest coal miner in Indonesia with production capacity of 60 million tonnes per year.
Chanin said doing business in Indonesia carries risks for Banpu. Management is expected to show local people that the firm’s investment can contribute to the growth of their economy while also creating jobs for them and improving their skills.