CHALLENGES AND PROSPECTS FOR THE INDONESIAN MINING INDUSTRY

Why Coal ?

Long term shift in industrialisation for a third of the world’s population will increase global energy consumption by 50% before 2030
China is emerging as a significant net importer of coal (Chinese imports 147 MT increase 41 %, from 2009 to 2010)

• •

Indian coal imports increase by 25 % in 2010. Emerging market demand expected to grow strongly in Asian countries in the future.

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Ministry of Energy and Mineral Resources Geology Resources Center

INDONESIA COAL MAP, 2008

EXPLANATION Coal Bearing Formation : Neogene Paleogene Pre-Tertiary Non-coal bearing
Province limits

Calorific Value (cal/gr, adb)
Low Medium High Very High ( < 5,100 ) (5,100 – 6,100) (6,100 – 7,100) ( > 7,100 )

Index Map

Distribution of Coal Resources

Source: Centre for Geological Resources, 2009

DISTRIBUTION OF LOW RANK COAL (LRC) TO PLTU

120,000

104,756
100,000 93,402

104,842

80,000 60,513 60,000

61,365

65,400

53,554
48,947

40,000
18,712 5,256 5,316 20,960 22,234

20,000
6,760 7,006

Resources Reserves

9,480

0 2002 2003 2004 2005 2006 2007 2008 2009

Source : Geological Agency, 2009

INDONESIAN COAL DEPOSITS
The potential is enormous ˜ 105 Bt of coal resources in Indonesia.  South Sumatra: Resource 22.24 BT and Reserve 2.65 BT  East Kalimantan: Resource 19.56 BT and Reserve 19.56 BT  C. Kalimantan: Resource 54.18 BT and Reserve 8.67 BT  For 2010 coal production estimate reach 320 Mt.  Coal quality and market proximity gives Indonesia a competitive edge.

(Coal Asia Volume 1 2010)

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COAL MINING COMPANY

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PT. ILTHABI BARA UTAMA

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MINE LOCATION
North Pakar (Penoon Block)

PT. Tiwa PT. Tanur Abadi Jaya

PT. Dermaga Energi

PT. Orkida Makmur PT. Sumber Api PT. Cahaya Alam South Pakar (Pakar Block)

PT. Bara Sejati

PT. Apira Utama

PT. Silau Kencana

North Pakar area excluded from this transaction

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Reserves & Resources
• Total resources of 3,697Mt, of which 3,327Mt from 3 JORC compliant concessions
Project
North Pakar Tiwa Abadi (TA) Subtotal - North Concession Area (Ha) 3,785 3,785 Reserves (Mt) Resources (Mt)

Proved Probable Total
N/A N/A N/A N/A N/A N/A

Inferred
300 300

Total
300 300

South Pakar Apira Utama (AU)
(1)

4,996
4,996 3,776 104 170 274 2,171 3,327

Bara Sejati (BS) (1) Cahaya Alam (CA)
(1)

Orkida Makmur (OM) Sumber Api (SA) Silau Kencana (SK)

1,062 2,365 4,996 22,191
25,976

N/A N/A N/A 104
104

N/A N/A N/A 170
170

N/A N/A N/A 274
274

60 110 200

60 110 200

Subtotal - South
Total

2,541 3,327
11 2,841 3,697

Source : (1) JORC Resource Report by SRK Consulting (December 2006) and Statement of Coal Reserves by AMDAD

KRL CONCESSION IN EAST KALIMANTAN

East Kalimantan Project Locations
KUBAH INDAH PROJECT
• • Target resource of 137Mt coking coal (+8000kcal/kg) Production targeted for 2012

JAWANA & BORAMI PROJECTS
• Target resource of 20 – 40Mt coking coal (+7500kcal/kg) • Adjacent to South Gobi’s Mamahak Project (~15Mt JORC Resource Reported)

MBK / BP PROJECTS
• Exploration target of 20Mt of high quality thermal coal (+7,000cal/kg) • Strategic/niche near-term production opportunity • Targeting ramp-up to 1Mtpa coal production in 2011 • Located 15km from Mahakam River
400km

• Historical BHP data, over 5000m drilling conducted • Profit marginsMedan estimated at +US$67/t
Malaysia

• Two 15,000Ha exploration concessions
Malaysia

Brunei

Singapore

Sumatra

Kalimantan
Balikpapan

Sulawesi
Banjarmasin

Jayapura

Papua

I N Jakarta D O N E S I A
GPK PROJECT
• 248Mt JORC resource

TJ PROJECT
• Preliminary mineable target of 205Mt of thermal coal • Production to commence by March 2010 • Potential for 4-5Mtpa operation by 2012 direct selling to Indonesian utility PLN under contract

East Timor

• Near-term production opportunity
• Potential for 3-5Mtpa operation direct selling to Indonesian utility PLN under contract

• Located 15km from Mahakam River

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INFRA STRUCTURES

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Railway and Hauling Road Project in South Sumatra

PT. Rajawali and PT. Bukit Asam (T. Enim – Lampung) 300 km, cost US.$ 1.6 billion Adani Group and PT. Bukit Asam (T. Enim – T. Api-api) 270 km, cost US $ 1.3 billion
PT. Servo Lintas Raya (Muara Enim – Musi River) 228 km Hauling Road

2.65 BT

RAILWAY PLAN IN KALIMANTAN
Central Kalimantan • Telakan to Taboneo Banjarmasin

East Kalimantan • Muara Ancalong Berau

to
2.41 BT

8.67 BT

HEAVY MACHINERY MARKET

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COAL COMPANY CAPITAL EXPENDITURES IN 2011

COMPANY COAL PRODUCTION INCREASES IN 2011

Source: Coal Asia

HEAVY MACHINERY SALES IN INDONESIA

Source: Coal Asia

Heavy Machinery Market Based on Industrial Sectors

25%

Construction Sector

50%

Agriculture Sector and Others

25% Mining sector

Source: Coal Asia

CONCLUSION
1. Indonesia holds 105 billion tons of coal resources, 39% in South
Sumatra 2. Indonesia production in 2010 about 320 Mt, local usage only 70 Mt

or 22%. In the future Indonesia would become one of the biggest coal exporter in the world
3. Chinese imports increase 41% from 2009 to 2010 and India 25%, they will be the biggest coal importer countries in the world

4. Global energy consumption will increase by 50% before 2030 due to increasing industrial growth and population.

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