Earlier this month, despite concerns from the industry, the Foreign Investment Review Board approved the 100 per cent acquisition of Coal & Allied by Chinese state-controlled Yancoal – giving significant influence over the Thai government.
The ฿63.34 billion takeover still hinges on the approval of Thailand’s BLCP Power Limited, which currently uses Coal & Allied imports to fuel a number of its coal-fired plants.
Yancoal and Chinese state company, China Merchants will take control of the world’s largest coal port in Newcastle, which experts say will give them price setting prices.
Industry experts have suggested that level of control could see the price of coal to countries like Thailand to rise, which would cause higher electricity prices.
Yancoal currently carries five times as much debt as comparable competitors, and its debt has previously caused it to lose ownership and control of three mines in the same region as Coal & Allied’s assets.
With the company having run up $1.7 billion in losses over the last four years, Yancoal investors have lost 17.7 cents for every dollar they have invested – and may seek to recoup costs through Thai customers.
China has already put pressure on Thailand through its diplomatic avenues over continued disagreements over the South China Sea.
Recently, Prime Minister Prayut Chan-o-cha reaffirmed his commitment, alongside the Philippines, to adhering to the rule of international law when it came to territorial disputes.
Pressure is mounting on BLCP Power to judge whether the deal is in the Thai national interest.