SET-listed mining contractor Sahakol Equipment (SQ) expects to generate total revenue of 27 billion baht from its first mining project in Myanmar through a 28-year concession.
Yesterday, SQ signed an agreement with Golden Lake, its partner in Myanmar, to jointly operate and develop the Mai Khot coal mine in Shan State.
Both parties spent the first batch of 300 million baht to set up a joint venture, Mai Khot Coal, in which SQ holds 70% and Golden Lake 30%.
Of the revenue target of this mine, the coal sales from the venture company will exceed 22 billion baht, while the revenue from coal mining operations by SQ in the first phase will stand at 5 billion baht.
The Mai Khot coal mine is on 13 million square kilometres, rich in high quality sub-bituminous and lignite.
"We expect to sell 300,000 tonnes of coal per year and the Mai Khot coal mine 100 million tonnes in reserves," said Sasavat Sirison, SQ's chief executive.
He said the initial operating target is to export coal to potential customers in the northern region of Thailand. Some coal output will serve Myanmar companies.
"At the same time, we will engage in the excavation operation of soil and coal from the project," Mr Sasavat said. "In the next phase, SQ will study the possibilities in developing coal-fired power plant in Myanmar at 600 megawatts, expecting to conclude by 2019."
He added the power generation is planned to be distributed to Thailand's state grid while SQ also plans to develop the smaller-sized power plant in Shan State for local people.
SQ is in talks with Myanmar's government, he said.
The Mai Khot coal mine is SQ's first upstream project in Myanmar and SQ has operated as a mining contractor in Thailand and Laos, with 34 years of mining service experience.
he Mae Moh mine in Lampang and Hongsa mine in Xayaburi (Laos) are SQ's ongoing projects.
Mr Sasavat said SQ is seeking mining service opportunities in the Indochina region -- Cambodia, Laos, Myanmar, Thailand and Vietnam.
From the new agreement in Myanmar, SQ can secure a backlog worth 35 billion baht, up from 30 billion baht as of the first quarter.
SQ has revenue from mining business, representing 25% and the remaining 75% goes to the construction business.
In 2019, SQ expects revenue to grow by 20% from last year at 3.62 billion baht.
SQ posted first quarter revenue of 1.25 billion baht, up sharply by 49% from the same period last year. Net profit bounced to 92 million baht from a net loss at 39 million baht in the first quarter of 2018.