PT Adaro Minerals Indonesia Tbk

Part of PT Adaro Energy Indonesia Tbk

Public Expose
Tuesday, September 13, 2022
Disclaimer

These materials have been prepared by PT Adaro Minerals Indonesia Tbk (the “Company”) and have not been independently
verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or
completeness of the information presented or contained in these materials. The Company or any of its affiliates, advisers or
representatives accepts no liability whatsoever for any loss howsoever arising from any information presented or contained in
these materials. The information presented or contained in these materials is subject to change without notice and its accuracy is
not guaranteed.

These materials contain statements that constitute forward-looking statements. These statements include descriptions regarding
the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and
financial condition of the Company. These statements can be recognized by the use of words such as “expects,” “plan,” “will,”
“estimates,” “projects,” “intends,” or words of similar meaning. Such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a
result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking
statements to reflect future events or circumstances.

These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation of any
offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form the basis of, or be
relied upon in any connection with, any contract, commitment or investment decision whatsoever. Any decision to purchase or
subscribe for any securities of the Company should be made after seeking appropriate professional advice.

2
Business Overview
ADMR at a Glance
Focuses on mineral-related business. Indonesia’s leading metallurgical coal producer with
low-cost, efficient operation supported by Adaro Group’s integrated supply chain network.

Large coal reserves and resources base which supports long-term sustainable growth.
Coal reserves: 170.7 Mt. Coal resources: 980 Mt.*

Strong demand profile from blue-chip steel companies. Customers are dominated by Asian countries
including Japan, China, and India.

Offers coal supply diversification for customers in a market dominated by Australia, Canada and
the US.

Close proximity to key markets offers customers with more competitive cost and shorter
transportation time.

Developing aluminium smelter in order to participate in green economy through supporting

materials for electric vehicle.

*Coal Reserves and Resources data is as of August 2021 from independent consultant PT Quantus Consultants Indonesia

4
Company Overview
CCoWs Locations Coal Resources and Reserves
Total Coal Total Coal
Compliance
Company / Locality Reserves Resources
Standard
(Mt) (Mt)
LC - Haju
2.3 4.4 JORC
(Green Coal)
MC - Lampunut
89.6 105.4 JORC
(Metallurgical and Green Coal)
JC - Juloi Northwest
- 629.8 JORC
(Metallurgical)
JC - Bumbun
55.5 174.5 JORC
(Metallurgical)
KC - Luon
17.7 50.9 JORC
(Metallurgical)
SBC - Dahlia Arwana
5.6 15.0 JORC
(Metallurgical)
TOTAL 170.7 980.0

CCoW STAGE COALS

Lahai Green Coal

Maruwai Hard Coking Coal,

Green Coal
Kalteng Met-Coal
Juloi Met-Coal
Sumber Barito Met-Coal

Notes : Operation Production Operation Development 5

Established Infrastructure to Ensure
Operational Excellence
Lampunut Coal Handling and Processing Plant
Crushing Plant : 600 tph
One of the largest CHPPs in
Indonesia in terms of capacity

Reduces ash from 12% ad to 4.5% ad

Washing Plant : 525 tph (max: 550 tph)

WASHING – 3 Process Circuit

DMC Hydrocyclone & Spiral Floatation

1.4 – 50 mm 0.25 – 1.4 mm 0.25 mm 6
Supply Chain: from Coal Terminal to
Vessel Loading Points
Barge-to-barge

Barge-to-vessel

Washing Plant : 525 tph (max: 550 tph)

Bulk Terminal

7
The Value of the Green Economy
Substantial investment opportunities in Indonesia

Value at stake Growing demand for

Green economy Green minerals

$3T
Investment in renewable energy
by 2030

$800B
Global EV sector by 2030

8
The Green Economy
Driving demand for green minerals

Electric vehicle Wind technology Solar technology

13 28 3 26 13 14 13

AI Ni Li Fe AI Si AI
Aluminium Nickel Lithium Iron Aluminium Silicon Aluminium

More Aluminium used in electric Metallurgical coal needed to Polysilicon needed for each
30% vehicles than internal
90 produce Steel for each MW of
7 MW solar PV plant
combustion engines tons wind power tons
Nickel needed in a single car Steel needed for each MW of Aluminium demand from the
35 kg lithium-ion battery pack
120 wind power
4M solar power sector by 2040
tons tons
Lithium needed in a single car 1 Aluminium in a single wind
8 kg lithium-ion battery pack ton turbine

9
Developing Our Green Business

Increasing revenue contribution from non-coal to balance

our business
• To optimize the Company’s role as mineral-
related business holding in Adaro Group,
Supporting Government’s plan on green industry and
processing of mineral product ADMR bought 99.67% shares of PT Adaro
Indo Aluminum from PT Alam Tri Daya
Looking to partner with reliable and experienced
Indonesia, on February 25, 2022.
companies

• Seeing the future development of electric

Development process will be conducted in stages
vehicle (EV), the Company is ready to
participate in providing aluminum for the EV’s
Positive LT outlook as aluminum is needed in many
industries including automotive material and support green economy for
sustainable living.
Reduce aluminum imports, create job opportunities and
contribute to state revenue

10
Aluminum Smelter Project in Kaltara
Industrial Park
Scope of project is 1.5mt of Aluminium production

Additional capacity of up to
500,000 tpa of Green Aluminum
powered by Hydro Power which
will be ready by 2029.
Potential replication of Phase I:
Estimated COD: Q4 2029
Additional production capacity of
up to 500,000 tpa aluminum.
Adaro is likely to invest in power
generation in this project.
Estimate COD: Q4 2026
Production Capacity: 500,000 tpa
aluminum with man-power up to
1,000. Adaro is likely to invest in
power generation in this project.
Estimated COD: Q1 2025
Estimated COD: Q1 2025 11
Domestic Supply and Demand Balance

Domestic Supply and Demand of Aluminum

2500

2000

1500
Gap
1000

500 ADMR’s 1st phase

0
2020 2025
Indonesian Production Capacity Indonesian Aluminum Demand

Source: Pre-Feasibility Study Guiyang Aluminum Magnesium Design & Research Institute Corp. Ltd.

The high gap between supply and demand of aluminum in Indonesia will increase the
opportunity for growing the domestic aluminium value chain.

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Solid Performance in HSE

• ADMR implements the Adaro Group’s Adaro Zero

Accident Mindset (AZAM) which emphasizes on
continuous improvements in safety SOPs to improve
workers’ behavior.

Subsidiaries PT Lahai Coal and PT Maruwai Coal

won the Pratama Award for environmental
management from the Ministry of Energy and Mineral
Indicator 1H 22
Resources.
LTIFR 0.00
SR 0.00

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CSR and Green Initiatives

• ADMR applies Adaro Group’s “Adaro Ignites Change” CSR

initiatives and Adaro Group’s initiatives in ESG.

• To improve ESG performance, and as the first step towards

energy efficiency, ADMR and Adaro Power are in the pre-
feasibility study phase of installing a mini-hydro power plant at
our mining site.

14
Industry Overview
Market and Price has been volatile

• The benchmark Platts premium low-volatile hard coking coal price on an FOB Australia basis fell $213/mt quarter on
quarter to end Q2 at $302/mt, while the PLV CFR China price fell $46.25/mt over the same period to $394/mt, amid
increased spot supply and decreased steel demand.

• Falling global steel prices were a key driver of the sharp fall in seaborne met coal prices in Q2. Prices also have the
potential to remain highly volatile as western countries mull further sanctions on Russia and China grapples with how
to revitalize its economy in the wake of COVID-19 lockdowns.

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Robust Long-Term Outlook
Metallurgical Coal Seaborne Demand (Mt)

450
400 • The long-term demand fundamentals for
350 metallurgical coal remain intact, underpinned by
300 economic growth which supports infrastructure
250 growth. Steel production and consumption are
200 forecasted to grow, leading metcoal demand to
150 reach nearly 400 Mt in 2030.
100
50 • India is expected to be the growth driver and
0 China’s demand is forecasted to remain stable in
2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030
the next decade.

China India Japan South Korea Europe South America Others

Source: IHS Markit

“IHS Markit reports, data and information referenced herein (the "IHS Markit Materials")
are the copyrighted property of IHS Markit Ltd. and its subsidiaries (“IHS Markit”).

17
Operational &
Financial Highlight
Strong Production & Sales
Growing Production with Low Strip Ratio Expanding Sales (in million tons)

10,0 3,0
2.3
9,0 8.7
8.4 2,0
8.6 1.4 1.3
8,0 1.0
7.7 0.9
1,0
7,0

6,0 0,0
5.2 2018 2019 2020 2021 1H22
5,0
4.2
Broad Market Demand (1H22)
4,0 3.5
3,0 Others
2.3 2.2 2.3
2.2 1.9 16%
2,0 1.5 Japan
1.0 1.1 36%
1,0

0,0 India
2018 2019 2020 2021 1H22 21%
Overburden removal (in million bcm)
Coal production (in million tonnes) China Others: Indonesia and Europe
27%
Strip ratio

19
Improved and Solid Performance

Improved Sales Volume Supports Higher Royalties Solid Financial Condition

250
219.7 48.9%
1H22
66.0%
200

148.2 34.1%
150 134.5 2021
121.9 52.3%
104.4
100 -23.2%
2020
-9.1%
50 25.6
17.8 24.7 -0.8%
15.6 14.1
2019
0 -11.6%
2018 2019 2020 2021 1H22
-41.5% 2018
14.7%

Cost of revenue (in $ million) Operating expense (in $ million) Net profit margin Gross profit margin

20
Continue to Deliver Consistent Results
OPERATIONAL PERFORMANCE 1H22 1H21 Change (%)
Production (Mt) 1.5 1.4 7.00
OB removal (Mbcm) 3.5 3.1 14.8
Sales (Mt) 1.3 1.2 9.4

FINANCIAL PERFORMANCE 1H22 1H21 Change (%)

(US$ million, except earning per share)
Net revenue 435.7 164.2 165.4
Gross profit 287.4 61.8 365.2
Net profit 204.1 34.5 491.1
Operating Income 272.7 50.7 438.2
Operational EBITDA 288.1 66.6 332.9
Interest bearing debt 561.2 487.1 15.2
Net debt 193.0 434.1 -55.5
Capital expenditure 0.9 4.2 -78.5
Cash 368.2 53.0 595.0
Free cash flow 236.9 32. 6 627.6
Earnings per share (full amount) 0.0049 0.0047 4.7

21
Continue to Deliver Consistent Results

FINANCIAL RATIO 1H22 1H21 Change

Gross profit margin 66.0% 37.6% 28.3 bps
Net profit margin 46.9% 21.0% 25.8 bps
Operating margin 62.6% 30.9% 31.7 bps
Operational EBITDA margin 66.1% 40.5% 25.6 bps
Net debt (cash) to equity 0.5x 1.9x -75.5%
Net debt (cash) to last 12 months Operational EBITDA 0.7x 6.6x -89.9%
Cash from operations to capex 298.5x 6.7x 4,384.7%

22
FY22 Projections

Coal Capital
Production Strip ratio Expenditure
(in Mt) (in $ million)

1H22A FY22F 1H22A FY22F 1H22A FY22F

1.5 2.8-3.3 2.3X 2.4X 0.9 25-30

• ADMR’s performance is in line with the Company’s FY22 projections. Coal

production has reached around 50% of the FY22 target in 1H22.
• Strip ratio is slightly lower than guidance due to inclement weather and heavy
equipment supply.
• Capex absorption is expected to be higher in the third and fourth quarter of 2022.

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Conclusions and Takeaways

• Volatile metallurgical coal prices in 1H22 were affected by the geopolitical events in Europe and global
steel price movements.
• Strong coal demand in 2022 supported the 143% increase in our average selling price (ASP) in the first
semester of 2022 compared to the first semester of 2021.
• ADMR’s competitive strength is a large coal reserve and resource base which supports long-term
sustainable growth, great product quality, strong demand profile from blue-chip steel companies, also a
low-cost mine operation.
• In the 1H22, ADMR’s performance is in line with the 2022 projections.
• ADMR is developing its aluminium business to participate in the Green economy through supporting the
EV battery segment.

24
Thank You