SET-listed coal miner Banpu Plc will continue to expand its power-generating business, aiming to spend US$910 million to expand capacity by as much as 230% to 4,300 megawatts by 2025.
The expansion will be done via a subsidiary, Banpu Power Limited (BPP), which will increase its power-generating capacity to 2,400MW by 2018 with an investment of $110 million, said chief executive Somruedee Chaimongkol.
Then, from 2018-25, the company will raise generating capacity to 4,300MW with another outlay of $800 million.
Banpu, which is Asean's biggest coal miner in terms of production, is poised to expand its renewable power business in the region as well as in Australia, aiming to increase its position in solar power, wind, hydro and geothermal power plants.
"Renewable power in this region has high potential and we want to capture that with this business opportunity," said Mrs Somruedee.
Banpu has rebalanced its business from a coal miner into the power sector over the last several years to alleviate risks stemming from the steep drop in global coal prices.
Of the additional power-generating capacity it has planned, some 1,000MW would be from renewable energy. That means renewable energy would comprise 20% of its total capacity, up from 7%.
"We are confident with our human resources and finances we can achieve our capacity increase goal," she said.
The goal is for revenue from power generation and coal mining to each make up around 40% of the total, with the rest from other businesses. Coal comprises 60% of revenue now and power business 40%.
It also plans an initial public offering of its subsidiary, BPP, on the SET in the second half of this year. The company's financial adviser plans to reveal the amount of funds it expects to raise shortly.
For the coal business, Mrs Somruedee expects the global coal price to rise next year to an average of $56 per tonne once a supply glut subsides.
Coal production this year should equal last year with 45.4 million tonnes from major coal resources in Australia, China, Indonesia and Mongolia, she said.
Banpu implemented a cost-cutting plan to deal with slumping coal prices, lowering production cost in the first half of the year to $43 per tonne from $62 in 2013, said Mrs Somruedee. The cuts covered logistics, transport and maintenance costs.
The company posted a net profit of 281 million baht in the second quarter, reversing a loss of 54.3 million year-on-year.
For the first half of the year, it had a net profit of 98 million baht, up from 14.9 million in the same period last year.
BANPU shares closed yesterday on the Stock Exchange of Thailand at 15.70 baht, down 30 satang, in trade worth 815 million baht.