Banpu Plc, Asean's largest coal miner, is planning capital investments of more than $466 million over the next six years.

The investment will lift the company's coal production to 33.5 million tonnes per year by 2015, from its target of 23 million tonnes next year.

Only marginal revenue growth is predicted over the next year despite a forecast production increase of 12% from the current 20.5 million tonnes, chief executive Chanin Vongkusolkit said yesterday.

Of the total investments planned for 2010-15, about $190 million will be spent on expanding Indonesian-based coal mines; $22 million will be used to lift output in China; and $255 million to complete the $400-million Hongsa Lignite thermal power project in Laos.

The six-year capital expenditure will only be spent on existing projects. Additional investments could be made as the company is exploring new coal mining opportunities in Indonesia, Australia and China, Mr Chanin said.

"Our new investments will pretty much concentrate on the coal business which we expect to have healthy demand growth over the next 10 to 20 years," he said. "At the same time, Banpu will reduce our profile in the power business focusing only on projects that ... support our coal operations."

The company is considering bank loans and bond issues to finance the investments.

Its debt-to-equity ratio ceiling is projected at 1:1, meaning that Banpu has room to borrow about 40 billion baht on top of its existing liability of approximately 10 billion baht, he said.

Banpu is currently involved in a bid to acquire Indonesia's Berau coal mine, which has an annual production capacity of 15 million tonnes.

While its third-quarter financial results beat market expectations, Mr Chanin said Banpu's performance would weaken in the fourth quarter due to lower coal prices and maintenance closures at the BLCP power plant, in which Banpu holds an equal stake with Electricity Generating Plc (Egco).

The coal miner reported a third-quarter increase in net profit of 22% year-on-year to 3.8 billion baht - beating the market consensus of 3.1 billion - as revenue slid 3% on falling coal prices.

Nine-month earnings jumped to 12.58 billion baht from 7.48 billion baht a year earlier on revenue of 40.43 billion, an increase of 18.7%.

"Overall performance this year is better than our projection even though we anticipate both revenue and profit to weaken in the last quarter," Mr Chanin said.

Banpu has set a final-quarter delivery target of 6.6 million tonnes of coal, generating revenue of 16 billion baht. Turnover in 2009 is forecast at 57 billion baht, an increase of 14% over last year.

Despite expected weaker fourth-quarter results, UOB Kay Hian Securities upgraded Banpu's 2009 earnings estimates by 7% to 14.38 billion baht, compared with 9.23 billion last year, citing higher production and better-than-expected year-to-date results.

Shares of Banpu closed yesterday on the Stock Exchange of Thailand at 462 baht, up 14 baht, in trade worth 1.9 billion baht.