Energy giant PTT Plc plans to relist its Indonesian coal mining business on the Indonesia stock market within two years when global coal prices are expected to rebound, says chief financial adviser Surong Bulakul.
PTT’s chief financial adviser Surong Bulakul disclosed PTT’s plan to relist Sakari on the Indonesia stock market has been delayed for many years on the low price of coal.
PTT entered the coal mining business in 2008 by acquiring a 94% share of Sakari Resources Co, which operates the Sebuku, Jambayan and Laung coal mines. The Indonesian company was delisted from the Singapore Stock Exchange after the acquisition.
“We considered relisting Sakari on the Indonesia stock market for many years, but the low coal price convinced us to delay the listing,” said Mr Surong.
The global coal price stands at US$74-75 per tonne, the lowest in many years.
To cope with the downturn in the coal business, PTT plans to cut costs, restructure administration such as human resources and logistics, and increase production efficiency.
“We plan to cut operation costs to under $60 per tonne, from $65 at present. We will relist Sakari on the Indonesia bourse when the price moves above $90,” said Mr Surong.
PTT expects the global coal price to reach $80 by the end of the year, boosted by increased demand from the power sectors in China, India and Japan. The gross margin for coal sales is also projected to double to $20 per tonne from $10 last year.
Nonetheless, Sakari is reducing its coal production this year to 8-10 million tonnes, down from 11 million tonnes in 2013. Earlier, PTT planned to produce 15-17 million tonnes per year from the Indonesian mines.
Although the coal price is low, Mr Surong said PTT continues to actively explore investment opportunities for coal mines in Asia because the future potential of the business remains high.
Apart from Indonesia, PTT has coal mining businesses in Brunei and Madagascar, with a combined total capacity of 15 million tonnes per year.
Shares of PTT closed Friday on the Stock Exchange of Thailand at 292 baht, down one baht, in trade worth 792 million baht.