Coal sales at Thailand’s Banpu drop in 2022

Thailand-based coal and power firm Banpu reported lower coal sales in 2022, as weather-related disruptions and operational challenges at mines affected production.

Banpu sold 30.95mn t of coal in 2022, down from 31.91mn t a year earlier, according to its annual report.

Sales from its Indonesian mines last year slipped to 18.93mn t from 20.07mn t a year earlier. Banpu attributed the fall in Indonesian sales to heavier-than-normal rainfall that affected its operations in key coal-producing Kalimantan region.

It received an average price of $192.69/t for its Indonesian coal in 2022, rising from $104.16/t a year earlier. Its average unit cost of sales rose to $64.90/t from $44.91/t a year earlier, partly because of an increase in royalty payouts and an uptick in fuel prices, Banpu said. The firm produces coal with a calorific value (CV) of GAR 5,300-6,700 kcal/kg coal from its Indonesian operations.

Coal sales from its Australian subsidiary Centennial Coal fell to 8.55mn t in 2022, from 9.82mn t in 2022. The drop was mainly because of operational delays at the Mandalong and Springvale mines, Banpu said, while last year's flooding also dampened its overall mining and hauling operations.

The average price the company received for its Australian coal rose to A$213.06/t ($142.06/t) in 2022 from A$98.90/t a year earlier. The average domestic sale price stood at A$86.41/t, which was even below the production cost of $131.56/t. But this was offset by its average export sale price, which reached A$444.96/t. Domestic sales account for two-thirds of Banpu's total Australian sales volume.

Banpu's Australian operations were also pressured by the coal reservation policy issued by the New South Wales state government. The domestic coal price under the policy is capped at A$125/t for NAR 5,500 kcal/kg coal, or $136.36/t for NAR 6,000 kcal/kg coal. Its Australian mines produce coal with CV of NAR 6,000 kcal/kg.

Banpu's overall average selling price rose last year, as thermal coal prices rose following some volatility in the international market after the Ukraine-Russia conflict. Argus-assessed spot prices for Australian NAR 6,000 kcal/kg coal averaged $359.54/t fob Newcastle last year, up from $135.15/t in 2021. Indonesian GAR 6,500 kcal/kg coal price averaged $242.68/t compared with $121.85/t in 2021, according to Argus assessments.

Banpu said it will not invest in any new coal mining projects as it pivots towards green energy. It will focus on energy efficiency improvements by integrating clean energy, such as solar- and battery-powered solutions, across its mining operations.

The company is also focusing on boosting its power generation capacity, with an emphasis on renewable energy. It expects to increase its equity generation capacity to 6,100MW by 2025, of which 18pc or 1,100MW will be powered by renewables. Its current equity generation capacity is 4,058MW.

By Siew Kuan Yong