Thai Miner Banpu [BANPU:TB] committed that it will proceed to divest its coal business as planned and speed up its green transition, as reported by Nikkei Asia on January 14. Despite that the company sold up to 45m tons of coal in 2021, the same amount as the previous year, it still obtained remarkable revenue growth from the surged global coal price last year. Citing Banpu Chief Executive Somruedee Chaimongkol, Banpu sees the increased coal price as a windfall that brings the company abundant cash flow to invest in green energy instead of expanding coal production. Specifically, Banpu expects 49% of earnings before interest, taxes, depreciation, and amortization (EBITDA) from the coal business in 2025, compared with the share of 80% in 2020.

The world witnessed a coal demand rebound due to recovering industries last year, especially from those in China. This rise in demand resulted in increased pressure to act on decarbonization and climate change mitigation. As the largest coal mining enterprise in Southeast Asia, Banpu responded by switching its focus to renewables and green energy technologies. The company aims for 20% of EBITDA in 2025 generated from overseas renewable power projects and domestic energy technology business, 20% from the gas businesses in the US, and 11% from traditional power generation. Also, Banpu aims for sustainable growth by diversifying its business in response to the changing market, considering that major coal consumers such as China and India have released timelines to peak carbon emissions and realize carbon neutrality.

Sources:

https://asia.nikkei.com/Editor-s-Picks/Interview/Thai-miner-Banpu-divesting-coal-business-despite-revenue-surge

https://tradingeconomics.com/commodity/coal

https://www.spglobal.com/platts/en/market-insights/latest-news/metals/121721-global-coal-demand-to-grow-6-in-2021-threatening-net-zero-goals-iea