Company’s core business is in the coal production and distribution domestically and overseas, having coal mine projects located in Indonesia as its base for coal production and distribution activities. In addition, the Company has ocean freight transport service business in Singapore to effectively support and manage coal transport for distribution in the Country or delivery to other countries.
Coal Characteristics
Coal is a fossil fuel consisting of volatile matter, moisture, and minerals, with carbon being the primary combustible element. During combustion, volatile matter and moisture are released, leaving a small amount of ash residue. Coal is generally classified into four grades based on calorific value, volatile matter, and fixed carbon, arranged in descending order of quality as follows: (1) Anthracite, (2) Bituminous, (3) Sub-bituminous, and (4) Lignite. In Thailand, the coal most commonly explored and developed for industrial use is lignite. Coal imported from overseas is primarily bituminous coal, which has a higher calorific value than domestically produced lignite. Coal prices are generally determined based on coal quality parameters, including calorific value, moisture content, volatile matter, fixed carbon, ash content, sulfur content, and coal size.
Coal Production
Coal is formed from plant remains that have been compacted, hardened, and chemically altered under heat and pressure over millions of years. The development of a coal mine therefore requires exploration activities to collect and analyze geological data in order to determine coal seam thickness, resource boundaries, coal quality and chemical composition, and commercially recoverable reserves. The information obtained from these exploration serves as the basis for the development of coal deposits. Accordingly, coal production generally consists of three major stages, as follows:
(1) Coal Exploration: Exploration begins with the study of surface geological data and geological structures to identify preliminary target areas. This is followed by scout drilling to examine the accumulation of soil and rock layers and the geological structure of the area in order to confirm the presence of coal deposits. The process also includes the assessment of coal quality and commercially recoverable reserves to support decision-making on the development of the coal deposit for mining operations.
(2) Coal Mining: Prior to commencing mining operations, detailed drilling is conducted to obtain detailed information about the mining area, including coal reserves and coal quality at each level of coal seam formation, as well as the overburden layers. The information obtained is used to develop the mine master plan, which includes cost analysis, mine development methods, as well as the determination of the volume and areas for overburden removal and coal extraction at each stage, together with the selection of appropriate mining equipment and machinery.
(3) Coal Dressing: Coal extracted from mining operations must undergo a coal dressing process to obtain coal that meets the quality requirements of users or customers. The process includes crushing, sizing, screening, and the removal of impurities through screening and washing.
Coal Pricing Policy
Coal pricing is primarily determined based on its calorific value, similar to other types of fuel. The coal selling price for each customer may vary depending on several factors, including order volume, coal specifications such as calorific value, credit terms, and other agreed commercial conditions. These factors are considered to ensure fair and consistent pricing for customers. For imported coal, prices are negotiated with each customer and may be based on various trade terms, such as FOB (Free on Board), CIF (Cost, Insurance and Freight), or delivery directly to the customer’s facility, depending on mutually agreed conditions.
Coal Distribution
For domestic coal distribution, the Company sells coal directly to customers without using trading agents. In overseas markets, coal is sold either directly to customers or through trading agents, primarily on a credit-term basis. The Company grants credit terms selectively to long-term customers with stable financial standing. For new customers, the Company mitigates credit risk by requiring a letter of credit (L/C) issued by the customer. Since commencing operations in 1985, the Company has experienced minimal bad debts from coal sales.
Competitive Strategy
The Company prioritizes service and quality control of the coal products as its marketing strategy, rather than relying solely on pricing competitiveness. Additionally, the Company continuously enhances coal production processes by integrating modern technology to improve operational efficiency and product quality.
Competition
The domestic coal distribution business has been recognized as an oligopoly market, with a limited number of operators supplying both large and small industrial customers. The major competitor is Banpu Public Co., Ltd. Nevertheless, with ownership of high-quality coal mines and substantial mineable reserves, the Company maintains a strong competitive advantage and significant business potential.
Industrial Trend
Subsequent to the significant increase in global coal prices, with the Newcastle coal price index (“NEWC”) reaching an all-time high of USD 434.02 per metric ton in September 2022 amid the global energy crisis resulting from the COVID-19 pandemic and followed by Russia’s invasion of Ukraine, coal prices declined sharply in early 2023 and entered a rebalancing phase. This adjustment was driven by coal producers accelerating production and supply to the market, alongside a decline in natural gas prices as energy supply concerns gradually eased. In addition, the market gained a clearer understanding of the impacts of the Russia-Ukraine war. In 2023, coal prices adjusted to a range of USD 357.75 to USD 122.16 per metric ton, with an average price of approximately USD 172.79 per metric ton. In 2024, coal prices were in the range of USD 146.38 to USD 119.84 per metric ton, with an average price of approximately USD 134.85 per metric ton, during which price volatility declined. In early 2025, coal prices gradually declined from USD 115.18 per metric ton in January 2025 to a low of USD 94.03 per metric ton in April 2025, before gradually increasing to USD 108.27 per metric ton in December 2025. The average coal price for the period from January to December 2025 was USD 105.37 per metric ton. These price movements were mainly due to adjustments in coal production in response to market conditions as prices fell closer to production costs, as well as high inventory levels at mines, ports, and customers’ facilities.
Coal price movements in the Indonesian coal market, as represented by the Indonesia Coal Index (“ICI”), generally aligned with global market trends. However, price responses tended to lag behind and fluctuate within a narrower range compared to the Newcastle coal price index (“NEWC”). This was due to the Indonesian coal products are largely in the range of medium to low calorific value, for which futures trading activities and derivative markets remain limited. In addition, major buyers such as China and India, both of which primarily rely on domestic coal production and consumption. In China, imported coal is mainly used for blending purposes to improve coal quality and/or to optimize energy costs. Meanwhile, India benefits from geographical advantages and geopolitical flexibility, allowing it to source alternative coal supplies from various regions, including South Africa, the United States, and Russia.
The coal market and industry have rebalanced under current economic conditions. Coal prices are expected to remain stable in 2026; however, increased volatility may arise from geopolitical developments, trade protection policies, and more severe climate-related events, which could have greater impacts on mining operations, logistics activities, and manufacturing operations. In addition, policy measures implemented by both coal-consuming and coal-producing countries to enhance energy security and to strengthen domestic industry protection may also contribute to market volatility.
In the short term, coal prices are expected to increase, supported by demand from China and India, driven by increased coal consumption for residential heating during the winter period from November 2025 to February 2026.
COAL BUSINESS ACTIVITIES
Domestic Coal Business
The Company imports coal from its joint-venture mines and other sources in Indonesia for distribution to customers in Thailand. Coal is distributed both through direct delivery to customers and through stock maintained at the Ayutthaya Coal Distribution Center, located in Nakhon Luang District, Phra Nakhon Si Ayutthaya Province, from which coal is further distributed to customers. The Ayutthaya Coal Distribution Center has a total area of 31 rai and 56.40 square wah and has the capacity to store up to 200,000 metric tons of coal. In 2025, the Company held an estimated 6 percent share of the domestic coal market for industrial consumption, excluding coal used for power generation by independent power producers and small power producers. Coal consumption in Thailand in 2025 was primarily used in the cement industry, accounting for approximately 30 percent, while the remaining 70 percent was used for power generation and other industries. This excludes coal consumption for electricity generation by the Electricity Generating Authority of Thailand (“EGAT”). Coal consumption is expected to continue expanding in the future, as coal provides a lower cost per unit of calorific value compared with oil and other fuels.
Overseas Coal Business
The Company has invested in coal mining operations in Indonesia for more than 22 years. Coal produced from the Company’s joint-venture mines in Indonesia is imported and distributed to customers in Thailand, as well as exported to other countries, particularly in the Asian region, including India, Japan, South Korea, Taiwan, and Hong Kong. The coal produced and distributed by the Company is recognized for its consistent quality and reliability, earning the trust of customers in both domestic and international markets. As a result, the Company has established a strong reputation in the coal industry in the Asian region.
PT. Lanna Harita Indonesia (“LHI”), a subsidiary registered in Indonesia, in which Lanna Resources Public Company Limited holds a direct shareholding of 55 percent of the paid-up capital, engages in coal mining operations in Samarinda and Kutai, East Kalimantan, Indonesia. LHI has been granted a Coal Contract of Work (CCOW) by the Government of Indonesia for a concession period of 30 years, commencing in 2001. The coal mine has remaining coal reserves of not less than 15 million metric tons. In 2025, LHI produced and sold approximately 3.5 million metric tons of coal, and plans to maintain production and sales at approximately 3.5 million metric tons per year through 2025 and subsequent years, in line with its production plan.
PT. Singlurus Pratama (“SGP”), a subsidiary registered in Indonesia, in which Lanna Resources Public Company Limited holds a direct shareholding of 65 percent of the paid-up capital, engages in coal mining operations in Kutai, East Kalimantan, Indonesia. SGP has been granted a Coal Contract of Work (CCOW) by the Government of Indonesia with a concession period of 30 years, commencing in 2009. The coal mine has remaining coal reserves of not less than 29 million metric tons. In 2025, SGP produced and sold approximately 4.25 million metric tons of coal. SGP has also developed a new coal deposit within its concession area, namely the Margomulyo Block (“MG”), with production and sales commencing in the third quarter of 2024, with an expected production capacity of approximately 1.5–2.0 million metric tons per year. Coal produced from the MG deposit will utilize the port and jetty facilities of the Argosari Block (“AG”), which is currently in operation. SGP has completed the construction of a second coal preparation plant and the improvement of the coal stockyard area at the jetty, increasing storage capacity to 200,000 metric tons. In addition, SGP has completed the construction and improvement of the jetty facilities, including the installation of an additional coal conveyor belt approximately 1.70 kilometers in length extending to the offshore jetty to support coal production and distribution from both the AG and MG deposits. Total coal production and sales are planned to reach approximately 5 million metric tons in 2026, and approximately 4.5 million metric tons per year thereafter, according to the Company’s production plan. The coal produced is of high calorific value with low sulphur content, which is expected to support strong market demand and good profit margins.
PT. Pesona Khatulistiwa Nusantara (“PKN”), an associated company in Indonesia, in which Lanna Resources Public Company Limited holds a direct shareholding of 10 percent of the total shares, engages in coal mining operations in Bulungan, North Kalimantan, Indonesia. PKN has been granted a Coal Contract of Work (CCOW) by the Government of Indonesia with a concession period of 30 years, commencing in 2009. The coal mine has remaining coal reserves of not less than 120 million metric tons from two major coal deposits. Coal production and sales in 2025 is approximately 5.45 million metric tons, while production and sales in 2026 are planned at approximately 5 million metric tons.
United Bulk Shipping Pte. Ltd. (“UBS”), an associated company in Singapore, in which Lanna Resources Public Company Limited holds a direct shareholding of 49 percent of the paid-up capital, engages in ocean freight shipping and coal trading businesses. UBS supports the Company’s coal business by managing the transportation of imported coal for distribution in Thailand and export to other countries, thereby enhancing logistics efficiency and maintaining competitive transportation costs.
