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Thailand
Coal trader moves into coal mining
THAI coal importer and distributor Energy Earth
Plc has entered the mining industry through its
acquisition of licensed coal miner PT Tri Tunggal
Pitriati (TTP), which is based in the Indonesian
province of South Kalimantan. TTP owns
two mines with combined reserves of 7.4 million
tonnes and has been awarded contracts
to supply 2 million tonnes of coal to Chinese
power producers over the next four years.
TTP’s Sebamban mine, with reserves of 2
million tonnes, produced its first coal in late
November, and expected to ship its first lot
of 60,000 tonnes to China by the end of
2011.
After a bumpy start to its Indonesian coal
foray when it says it was cheated by a local
trader out of the 10 million baht it paid for the
first lot of coal from Indonesia, Energy Earth
is confident it can move forward after taking
on an Indonesian partner and completing the
share-swap deal worth about 1 billion baht.
Energy Earth’s managing director Khajohnpong
Khamdee, whose family founded the
company as Energy Perfect four years ago,
told local media: “To do business in Indonesia,
you must understand the culture and find
the right partner.”
When Energy Perfect took over the listed
firm Advance Paint & Chemical (Thailand) at
the end of 2010 in a back-door listing, it renamed
itself Energy Earth. Compared with
Thai mining heavyweights Banpu and PTT,
both of which own coal assets in Indonesia,
Earth has taken a different approach.
Khajohnpong Khamdee says, “While PTT
and Banpu have lots of money to spend, our
company is more down-to-earth. We try to
get close to the locals.”
The acquisition of TTP makes Earth the
third-largest listed coal miner after Banpu and
Lanna Resources. The three other coal
traders on the Thai stock exchange - Asia
Green Energy, Unique Mining Services and
Thai Capital - do not own any mines, although
Asia Green has been in talks to acquire
Indonesian coal assets.
The share swap gave Energy Earth five new
shareholders including Nugoon Sri-in, whose
group took over TTP late last year. A former
top executive of National Power Supply,
which is part of the Advance Agro Group,
Khajohnpong Khamdee has sourced Indonesian
coal for the power company since 2007.
He says the transformation from a trader
into a miner is a major step ahead for Energy
Earth to hedge against coal price risks. “This
move is not a risk. In fact, it is an opportunity
to grow our business, as Indonesia has much
more coal than Thailand. Supply is critical in
this business. Having our own mine helps to
secure supply and minimize effects when the
coal price soars.”
Through TTP, Energy Earth is continuing its
search for more coal assets to secure additional
supply including a potential site in Central
Kalimantan province. In October the
company signed a memorandum of understanding
to supply 8.5 million tonnes of coal
to India’s Chettinad Group to fuel its power
plants starting in July 2013.
Khajohnpong Khamdee said that after selling
1.4 million tonnes in the first nine months
of 2011, Energy Earth revised up its annual
sales target from 1.2 million tonnes to 1.6 million,
excluding the first shipment to China.
January/February 2012 | ASIA Miner | 43