Banpu`s 2007 sales may drop as rain disrupts output

Mining Journal

Banpu Pcl, Thailand`s biggest coal miner, said 2007 sales may fall from a year earlier as rain disrupts coal output at mines in Indonesia.

Sales this year may be close to or lower than the 33 billion baht (US$954 million) it booked in 2006, chief executive officer Chanin Vongkulsolkit said at a press conference in Bangkok on Friday.

“The rain was unusually heavy,” Chanin said. “Water was pouring hard into our Jorong mine" in Indonesia`s Kalimantan region, he said.

A drop in coal output will force Banpu to rely on its power-generating business to boost profit growth this year.

The company said August 10 contributions from electricity sales helped it post its highest quarterly profit in almost nine years.

Banpu`s Indonesian mines produced 19.3 million tons of coal, making up more than 70 percent of the company`s total sales of the commodity last year, according to data compiled by Bloomberg.

Miners in the archipelago, including PT Bumi Resources, Asia`s third-largest coal producer by sales, have said that rain dented output in recent weeks.

Banpu will invest US$469 million to build new mines and power plants in 2007 and 2008, the company said in a statement on Friday.

The company also plans to fund part of the investment with an initial public offering of its Indonesia coal mining unit, PT Indo Tambangraya Megah, scheduled in the fourth quarter, chief financial officer Somruedee Chaimongkol said.

She declined to say if the share sale may be delayed because of concerns over the US subprime rout.