Thai oil and gas conglomerate, PTT Group's board of directors gave the go-ahead for PTT Mining of Hong Kong (PTTML), a coal mining business, to be transferred to Indonesia-based PT Astrindo Nusantara Infrastruktur Tbk (Astrindo), an investment company focused on integrated energy infrastructure, for US$ 471 million on August 2, 2022.
PTTML currently owns coal concessions in Brunei Darussalam, Madagascar, and three coal mines in Kalimantan, Indonesia. The transaction is expected to be completed by 4Q22, according to Nikkei Asia.
"The divestment of the coal business is in line with PTT's strategy towards sustainability and clean energy and the company's new vision of "Powering Life with Future Energy and Beyond," the president and CEO of PTT Auttapol Rerkpiboon responded.
When it comes to energy, the Thai government has set the target to reduce fossil fuel-based energy consumption, reduce its reliance on natural gas, increase the proportion of electricity generated from renewable sources and liberalize the energy market – for all people to have inclusive and equitable access to energy.
Under the PTT Group Clean and Green Strategy, PTT Group aims to reduce greenhouse gas emissions from its operations by 20% compared to the business-as-usual scenarios by 2030 – a target that also aligns with Thailand's national target.
To fulfill this goal, PTT Group has steered its direction towards green energy from fossil fuels. PTTML's case best exemplifies the conglomerate's net zero transition commitment.
PTT Group has been supporting national efforts to reduce greenhouse gas emissions through social development projects.
Since 2020, PTT Group has been preparing to apply carbon pricing tools to investment decision processes, as well as preparing for the introduction of a carbon trading system or carbon tax.
The Group has also applied the circular economy concept to the development of green innovations. For instance, it opened the Café Amazon at PTT Station Sam Yan under the "Circular Living" concept, which uses more than 70% of recycled waste as materials for store decorations.
While the world pushes towards net-zero emissions, Astrindo continues to invest in coal plants.
Astrindo's long-term strategy seems to have little to do with current coal price volatility, as the company is more focused on creating an integrated infrastructure platform that reduces emissions today, in the area of transportation and logistics.
"The acquisition of PTTML appears opportunistic given the current prices of global coal. But our intention to buy coal mines started well before the recent surge in prices," said Ray Anthony Gerungan, the president director of Astrindo.
Coal is expected to trade at US$432.62/MT by the end of this quarter, according to Trading Economics global macro models and analysts' expectations.
Astrindo envisions expanding the platform towards carbon-neutral industries. More particularly, integrated coal mine operations involve mining and infrastructure for a coal port for efficient transportation.
Highlights of PTT Group's net zero transition in 2022
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Source: PTT Group. Compiled by DIGITIMES Asia in August 2022.