National oil and gas conglomerate PTT Plc expects to sell its coal mining business in Indonesia within the first half of this year as the company plans to focus more on clean energy and mobility.
It is the right time for the sale as global coal prices have risen since the end of last year, said Auttapol Rerkpibun, chief executive and president of PTT.
The Newcastle coal reference price rose by 54% to US$83 per tonne at the end of 2021, up from $53.8 per tonne at the end of 2020, thanks to the recovery of the global economy as the pandemic eased.
Coal prices, which have risen to $264 per tonne, are also being affected by the impact of the Russia-Ukraine war, which is also blamed for the global oil price surge.
The company previously planned to list the coal business, which is operated by its subsidiary Sakari Resources Co (SAR), on the Indonesia Stock Exchange, and revamp coal production through cost control when global coal prices dropped.
The Sebuku and Jembayan coal mines, which are run by SAR, have a combined production capacity of 8-9 million tonnes per year.
It had enjoyed full production but later saw the production decrease due to a drop in global coal prices.
Last year, SAR earned 16.98 billion baht, a 57% rise from the previous year, though sales volume declined by 4.7% to 6.1 million tonnes, down from 6.4 million tonnes in 2020, according to PTT.
The decrease was attributed to a shortage of coal from the Sebuku coal mine. Additional production from Jembayan could not offset the shortfall.
Last year, SAR doubled its earnings before interest, taxes, depreciation and amortisation to 3.98 billion baht.
PTT entered the coal mining segment in 2012 by buying a 55% stake in Singapore-listed coal miner SAR and acquiring the remaining 45% share through a tender offer.
PTT controlled two coal mines in Indonesia and a trading company in Singapore.
