Banpu plans US$15-20m for coal investment in 2001

Banpu plans US$15-20m for coal investment in 2001

BANGKOK (AFX-ASIA): Banpu Plc chief executive officer Chanin Vongkusolkit said the company plans to spend US$15-20 million on investment next year, mainly on new coal mines in Indonesia.

"The money will be utilized for investment in our coal business in Indonesia and the investment is aimed at seeking new sources of coal," Chanin told AFX-ASIA in an interview.

He said funding of the new investment will be partly from cash on hand and partly from cashflow.

Chanin said the coal industry in Asia is expected to continue to growth at a rate of 5-10 percent per annum next year.

Currently, capacity at Banpu's coal operation in Indonesia runs at 3.0 million tons a year "but we have no plan to boost capacity there from current levels," he said.

Chanin said some 40 percent is exported to Thailand while 20 percent is sold in Indonesia and the balance of 40 percent shipped to other countries.

He said the company aims to be a regional coal company in order to diversify risks.

Banpu recently bought a 10 percent stake in Lanna Lignite Plc in order to add value to the company and "because Lanna Lignite has better quality coal in terms of higher heat values," he said.

Lanna Lignite produces 1.0 million tons of coal per year and it will commence operation at its new source in Indonesia next year, he said.

"The investment in Lanna Lignite is for the long-term. However, Banpu has no plan to increase our holding in Lanna," he added.

Banpu has also bought a stake of some 8.0 percent in recently listed Ratchaburi Electricity Generating Holding Plc, which is also for the longer term.

"We view Ratchaburi as adding value and creating synergy for the company. Furthermore, the risks on any investment in Ratchaburi are very low because its plants are cost-effective and have economies of scale," he said.

In terms of assets, Banpu's investment in both the power generation business and coal business are about equal and will probably remain so for some time, he said.