The SET-listed Banpu Plc, Asean's leading coal miner, plans to increase its investment in the power sector in a bid to lower risks stemming from volatile coal prices.
Chief executive Chanin Vongkusolkit said the company expects to lift its profit from power business to 30-40% of Banpu's earnings from almost 20% last year.
"We will probably increase investments in countries such as Thailand and its neighbours," he said, adding that Banpu will either develop projects from scratch or purchase existing assets.
Thailand's energy demand increases each year, but Mr Chanin said there are limits to resources and potential areas for investment.
Although the coal market has already bottomed out with increasing imports into India, he said prices remain sensitive and Chinese demand is still unstable.
"2012 was a tough year for the coal industry worldwide, with average thermal benchmark coal prices falling by more than 20%. That decline was due to an unprecedented surge of US coal for export," said Mr Chanin.
"The root cause was the preference for gas-fired power domestically on top of continued supply growth from Indonesia and Australia."
Banpu plans to invest almost US$1.25 billion from 2012-15 - $378 million in power, $200 million in Mongolia, $425 million in Australia and $245 million in Indonesia.
The company projects the sale of 48 million tonnes of coal this year, up from 43.8 million in 2012, including 29 million tonnes from Indonesian mines, 15 million from Australia and 3 million from China.
Banpu's Indonesian mines target a further 10% cut in operating costs through productivity improvements to help offset the impact of softening coal prices.
In Australia, operating costs will also be reduced by another 5-7%, said Mr Chanin.
China's Gaohe mine is working on land acquisitions for a railroad spur, while the Hebi mine expects to post normalised output this year.
In Mongolia, the Tsant Uul mine will start production next year.
In addition to power sector sales, Tsant Uul is also considering the potential of selling to the coal chemicals market in China.
Shares of BANPU closed yesterday on the SET at 384 baht, up four baht, in trade worth 321 million baht.