National oil and gas conglomerate PTT Plc has decided to sell its Indonesian coal mining business for US$471 million as the firm continues to move towards clean energy.
"It is the right time for the sale as global coal prices have risen since the end of last year," said Auttapol Rerkpiboon, chief executive and president of PTT.
The Newcastle coal futures reference price closed at $407.9 per tonne yesterday, according to Investing.com.
The price stood at $83 per tonne at the end of 2021, an increase from $53.8 per tonne in 2020, thanks to a recovery in the global economy as the pandemic eased. The prices were also driven by huge demand among European nations after they joined the US in restricting oil and gas imports from Russia, following its invasion of Ukraine.
PTT sold two coal mines to PT Astrindo Nusantara Infrastruktur Tbk (Astrindo), a company listed on the Indonesia Stock Exchange, through a buyout deal, according to a letter submitted to the Stock Exchange of Thailand.
The Sebuku and Jembayan coal mines have a combined production capacity of 8-9 million tonnes per year.
The sale was made through PTT's wholly owned PTT International Holdings Co (PTTIH), the owner of PTT Mining Co which operates the mines.
PTTIH and Astrindo signed a share purchase agreement on Monday in Bali. The transaction is expected to be completed in the fourth quarter of this year.
This transaction will divest all of PTT's investments in the coal business, which is aligned with PTT's strategy towards clean energy and mobility.
PTT entered the coal mining segment in 2012 by buying a 55% stake in Singapore-listed coal miner Sakari Resources Co and acquiring the remaining 45% share through a tender offer. The business also included a coal trading company in Singapore.
Ray Gerungan, president director of Astrindo, said the mine purchase from PTT is in line with the company's long-term plan to enter the upstream coal business.
PTT continues to step up efforts to promote clean energy under the Thai government's plan to achieve carbon neutrality, a balance between carbon dioxide emissions and reduction, by 2050.
