Mekong Utility Watch

EGAT acquires coal mining rights in Indonesia

Yuthana Praiwan
Bangkok Post
November 29, 2008

Egat International Co (Egat Inter), a subsidiary of the Electricity Generating Authority of Thailand, has received coal exploration and production rights in Sumatra from the Indonesian government, which will strengthen its power generating portfolio overseas.

Egat Inter is the state utility’s third after the SET-listed power producers Egco Group Plc and Ratchaburi Electricity Generating Holding Plc. “This is our way to secure future growth in terms of revenue and power capacity to assure that it can meet Thailand‘s future demand,” Egat governor Sombat Sarntijaree said yesterday. “We hope that Egat Inter will also succeed in acquiring new capacity of 300 to 600 megawatts in the Philippines, where lots of plants are suffering from the financial crisis.”

The rights in Indonesia cover 180,000 rai or 29,000 hectares, according to Prutichai honglertvanichkul, acting managing director of Egat Inter. Egat Inter holds a 90% stake in the Sumatra project, with the rest held by the Thai mining operator Inter Mining and Energy Co. The two parties signed a memorandum of understanding yesterday to co-develop the coal mine.

An exploration and feasibility study will begin in February and over the next six months the partners will also conduct a market study to devise a business plan. “If the study shows [the mine is] economically viable, we would sell coal to local buyers and export some output to Thailand,” Mr Prutichai said.

Egat Inter has received initial rights from the Indonesian government for a total of 15,500 rai or 2,500 hectares in Jumbi province. According to a local survey, the province may have coal reserves of approximately 2.2 billion tonnes, mainly premium quality. Coal prices have remained remained strong despite the current global economic slump, averaging US$70-75 per tonne, down from $80-85 earlier this year, reflecting strong demand remained in the region, he said.

Mr Prutichai added that Egat Inter was also looking at building a power plant at he coal mines if studies showed it would be viable. Another new investment of Egat Inter is the 260-MW Nam Ngiep hydropower plant in Laos, a co-venture with Japan-based Kansai Electric and the Laotian government. It should open in 2015. In Thailand, Mr Sombat said Egat continued to plan to build four coal-fired power plants with a total of 2,800 MW from 2015 onward. Some would use coals from its mines in Indonesia.

Categories: Mekong Utility Watch

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