TOKYO -- Major Indonesian coal miner Adaro Energy, which in recent years has entered the power-plant business at home, is looking to build power plants in neighboring countries in Southeast Asia.
President and Chief Executive Garibaldi Thohir said that following a successful deal late last year with Electricity Generating Authority of Thailand, or EGAT, in which Adaro will supply coal for more than 20 years, he realized the company's ability to commit to a long-term supply agreement for coal-fired power plants that could give it an advantage in the sector.
"We are looking [into] projects in the Philippines, Myanmar [and] other places outside Indonesia -- especially in Southeast Asia," Thohir told the Nikkei Asian Review on the sidelines of the 19th Nikkei Global Management Forum in Tokyo on Tuesday. "[I've seen] more and more similar opportunities."
Thohir and his business partners bought Adaro from Australia's New Hope in 2005. Over the past few years, Adaro has been expanding into the power-plant business. It has a portfolio of 2,260 megawatts in three coal-fired power-plant projects in Indonesia. These include a 2,000-megawatt power plant on the main island of Java, which will be one of Indonesia's largest power plants once construction is completed -- targeted for 2020.
The company has been exporting 80% of its coal output, but it now is also looking to invest in coal-fired power plants overseas.
Building power plants, while helping it secure long-term contracts for coal supply, is among Adaro's efforts to diversify its business.
Additionally, the company acquired a metallurgical coal mine from its Australian business partner, BHP Billiton, in Kalimantan on the island of Borneo last year. It is seeking to use the mine to supply coking coal for iron and steel factories, a move that will help Adaro diversify from supplying thermal coal for power plants.
Adaro has also begun to move into a "second phase of development" of its power business. Thohir said the company "is ready" to invest in renewable energy, having developed a small solar power plant for its own use "for learning" and is looking into bidding for five to six renewable-energy projects offered by the Indonesian government.
He said despite its solid coal mining and exports business, Adaro started its diversification efforts to become an "integrated energy producer" in 2008, adding that the cyclical nature of the commodity business makes diversification necessary in order for mining companies to survive.
"I call it 'self-disruption.' I have to disrupt the business in order for us to survive," Thohir said. "I know one day all this solar power [and] wind power will come whether we like it or not. So I have to be ready for the next move."
Despite its drive to diversify and efforts by some regional governments -- including Indonesia -- to embrace renewable energy, Thohir still believes the future of coal will be promising in emerging Asia because of countries' huge needs to expand their power capacity in order to grow.
Thohir said total recoverable reserves of coal around the world are estimated at 1,083 billion tons -- enough to last approximately 210 years at 2004 consumption levels -- making coal "the most reliable, most cost-efficient" energy source to support growth.