Banpu plans to increase coal output by 12%

       Banpu Plc will boost its coal output next year by 2010 in anticipation of higher demand as the global economy returns to growth.
       New output will come mainly from its mines in Indonesia, and some from China. Overall output will reach 23 million tonnes in 2010, from an estimated 20.5 million this year, said Banpu president Chanin Vongkusolkit.
       The upswing in output is planned in line with higher demand as the global economy recovers next year, he said.
       "Global demand for coal from the second half onward may recover significantly to cope with a better global economy," he said yesterday.
       The price of coal is expected to rise next year, he said. But it is unlikely to reach July 2008's peak of $170 per tonne.
       Banpu expects this year's group revenue to be on par with 2008-56.8 billion baht, with a net profit of 9.22 billion - despite higher sales volumes driven by cheaper coal prices.
       "Coal prices are sensitive to crude oil prices. Coal prices have been down since the price of crude collapsed last year,"he said.
       Banpu recorded much stronger performance in the second quarter compared with the first, on the back of increased holdings in China, larger sales volumes and higher prices for its highergrade Indonesian coal.
       Banpu's second-quarter consolidated profit totalled 3.98 billion baht, up 73%year-on-year, on sales of 12.93 billion, a 17% increase from a year earlier. Firsthalf profit doubled to 8.78 billion baht from 4.37 billion a year earlier.
       The company plans next year to spend $20 million to expand the operational area of its Indominco mine in Indonesia,increasing output by 2 million tonnes.
       The firm, however, has yet to complete its five-year investment plan, ending in 2013, which it had intended to finish early this year.
       "We had planned to finish the plan early this year, but coal prices have been so volatile. We had to revise the plan to catch up with the economy. But I think we will probably complete it within this year," said Mr Chanin.
       Banpu's previous investment plan ended in 2008, with the company spending $400 million more than the planned $660 million. The additional amount was used to finance the acquisition of coal mines in China.
       The new business plan will focus on increasing the firm's overseas presence and positioning it as one of the coal mining industry's top players in Asia.Banpu will focus on coal and power in Indonesia, China and Australia, said Mr Chanin.
       "Over the past 10 years, we have developed and improved our technology and human skills. We are confident that we are ready to be one of the leaders in Asia," he said.
       Banpu is keen to acquire the Berau coal mine in Indonesia from a local operator. Bidding will open in September.
       The firm has set a $208-million budget for this year, most which will be used to develop coal mines in Indonesia, such as Bontang, Bharinto and Indominco.
       Shares of Banpu closed on the Stock Exchange of Thailand at 398 baht, down 18 baht, in trade worth 1.58 billion baht.