Company Presentation August 2013 1 Disclaimer These materials have - - PowerPoint PPT Presentation

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PT Toba Bara Sejahtra Tbk (“Toba”)

Company Presentation

August 2013

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Disclaimer

These materials have been prepared by PT Toba Bara Sejahtra Tbk (the “Company”). These materials may 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

• r 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

• f the Company should be made after seeking appropriate professional advice.

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Content

Financial Highlights 2 5 Corporate Profile & Updates 4 Investment Highlights & Growth Strategies 3 Business Overview & Updates CSR & Environmental Highlights 1

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Corporate Profile & Updates

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5

ABN 66.1% IM 15.7% TMU 18.2%

Toba specializes in thermal coal production and comprises three operating subsidiaries: Adimitra Baratama Nusantara (ABN), Indomining (IM) and Trisensa Mineral Utama (TMU), which hold adjacent concession areas located in East Kalimantan, Indonesia

Toba in Brief

• Substantial and diversified thermal coal

reserves and resources

• JORC-compliant proved and probable reserves of

147 MM tons and measured, indicated and inferred resources of 236 MM tons

• Coal brands with calorific values ranging from

4,700 - 5,800 Kcal / kg GAR

ABN 79.6% IM 15.0% TMU 5.4%

Reserves

%

• Strong growth profile
• Produced 5.2 MM tons of coal in 2011 and grew to

produce around 5.6 MM tons of coal in 2012

• Prime location provides the operational cost edge to

grow as a logistical & operational center for the area

• Continued exploration effort to increase our Reserves and
• Resources. Current reserves only account for 52% of our

total area has been explored

Revenue (1)

%

EBITDA(1)

%

Resources

%

Total: 147 MM Tonnes Total: US$ 425 MM Total: US$ 30 MM Total: 236 MM Tonnes

Note: (1) Last Twelve Month analysis ~ Revenue and EBITDA ABN 73.7% IM 21.8% TMU 4.5% ABN 76.0% IM 19.6% TMU 4.4%

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Toba’s coal quality is in mid-upper range

Coal Specifications

Calorific Value

GAR

Ash Sulphur

4,700 5,800 5,200 5,900 6,000 5,300 4,200 7,200 4,900 6,500 5,000 5,100 4,500 6,700 4,900 4,200 4,100 5,100 6,700 4,200 2,5% 12,0% 1,5% 2,0% 2,5% 3,3% 4,0% 5,5% 5,0% 5,5% 4,0% 8,0% 4,5% 13,0% 7,0% 11,5% 9,0% 2,0% 1,9% 10,9% 0,2% 1,4% 0,1% 0,2% 0,1% 0,1% 0,2% 2,0% 1,0% 0,6% 0,7% 0,5% 0,1% 1,5% 1,0% 0,7% 0,2% 0,5% 0,2% 1,0%

TOBA TOBA TOBA

Source: Broker Reports

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Notes:

• 1. Son of TS founder, Luhut B. Pandjaitan
• 2. Figures are rounded off

Ownership Structure

• 20-year Production

Operation Mining Permit (“IUPOP”) expiring in December 2029

• IUPOP was converted from

Kuasa Pertambangan (“KP”) in 2009

• IUPOP expires in June 2013
• IUPOP was converted from KP in

2010

• IUPOP extension was completed

in March 2013 (First out of 2 extensions: in 2023, with tenor of 10 years each)

• 13-year IUPOP expires in December

2023

• IUPOP was converted from a KP in

2010

• Plantation permit expires in 2036
• 2,990 ha
• 683 ha
• 3,414 ha
• 8,633 ha (Right to Use Land)
• Reserves: 117MT- JORC
• Resources: 156MT- JORC
• Reserve: 22 MT- JORC
• Resources: 37MT- JORC
• Reserves : 8 MT - JORC and

additional 7 MT of internal estimate

• Resources: 43 MT- JORC
• Planted Area: 2,896 ha

License Area

Davit Togar Pandjaitan (1) PT Bara Makmur Abadi PT Toba Sejahtra (“TS”) Roby Budi Prakoso PT Sinergi Sukses Utama 71.8% 0.8% 6.2% 5.1%

PT Toba Bumi Energi (“TBE”)

99.99% (2) 99.99% (2) 3.6% ABN Minorities 49.0% 51.00% 99.99% (2) Public 12.5%

Reserve

90.00%

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Majority Shareholder

Toba believes it benefits from Toba Sejahtra’s experience in the Indonesian coal sector as well as its leadership and experience

Controlling Shareholder with Established Track Record… … Helmed by an Experienced Leader

• A privately owned group founded in 2004 with interests in energy

and plantations

• Its business segments are as follow:

– Energy: Owns 5 coal mining concessions through Toba and PT Kutai Energi. All of TS' mines are characterized by low production costs and favorable proximity to ports – Oil & Gas: In the exploration phase of the 4,567 sq miles South East Madura Block through subsidiary E&P company PT Energi Mineral Langgeng – Power Plant: Operates a 30 MW coal-fired power plant in Palu, Central Sulawesi and is developing a 120 MW greenfield power plant in Senipah, East Kalimantan – Agribusiness: A 25% stake in a 12,000 ha palm oil plantation in East Kalimantan

• General (Ret.) Luhut B. Pandjaitan is the key shareholder and

founder of Toba Sejahtra group. He is currently the chairman of TS

• Mr. Luhut had a long and illustrious career in the civic service

before turning to the commercial sector. Over the course of thirty years in the Army Special Forces, Mr. Luhut rose to become a four- star general – In 1999, Mr. Luhut retired from the military service to serve as Ambassador for the Republic of Indonesia to Singapore – In 2000, he was appointed Minister of Industry and Trade of the Republic of Indonesia

• Thereafter, Mr. Luhut applied his knowledge and leadership skills to

establish TS in 2004, building it from the ground up into a major business group with interests in energy oil and gas, power and agribusiness

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Initial Public Offering

Listed on IDX 06 July 2012 Number of Shares Offered 210,681,000 shares or 10.47% IPO Proceed IDR 400,293,900,000 Anchor Investor Baring Private Equity Asia (8% at IPO) Ticker Code TOBA

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Ticker Code: Toba

In full amount IDR

IPO (6th Jul 2012) IDR 1900 2nd July 2013 IDR 860

Historical Share Price

Sources: Bloomberg

• Decline in TOBA’s share price reflects lack of liquidity and lack of stock

coverage

• Going forward, we are considering various options to increase liquidity and

coverage

2012 2013

11

2007

• IM commenced

production 2011

• TMU commenced

production

• Toba production

hit 5m tons 2008

• ABN commenced

production

• Operational

adjustment due to drop in coal market 2010

• TS acquired the remaining share

for IM from minority shareholder

• Toba acquired 51.0% of ABN,

52.5% of TBE (IM’s shareholding company) and 51.0% of TMU

• Toba production hit 4m tons

Key Milestones

Strong track record of acquisitions, development of greenfield mines, rapid production ramp-up and experience to adjust operation in a down-market 2007 2008 2009 2010 2011 2012 2013

2012

• Toba acquired the minorities’

shares in TBE and TMU

• IPO/Listed on IDX, 6th July

2012

• Eliminated overlapping issues

with plantation company (PKU) 2009

• ABN & IM production

reached 2m tons 2013

• IM successfully

extended IUPOP until 2023

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Investment Highlights and Growth Strategies

Source: Company data

0.1 1.1 3.1 3.8 4.4 ~ 6,5 0.7 0.9 0.9 1.4 1.0 0.0 0.3

1 2 3 4 5 6 7 2007 2008 2009 2010 2011 2012 2013 TMU Indomining ABN

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Solid Operating Track Record (i)

0,8 2,0 3,9 5,3 5,6

Production Growth

MT = Million Tons

0,2 ~5,8 – 6,4

Forecast

• Toba started exploration at ABN & IM in 2006 and at TMU in 2008
• Production grew at 65% CAGR from initial size of 800k in 2008 to 5.6 MT in 2012
• Toba focuses on Continuous Production Growth and this is supported by available infrastructure

capacity of 13 MT of coal

• Additional 3 MT of capacity is expected to be realized in 3-4Q13 to become total of 16 MT
• Production growth will be driven by TMU and Additional CAPEX will help it fuel growth

ABN IM TMU

Toba is transitioning from Greenfield into growing major player Forecast

0.3

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Toba’s production growth is among the highest in the industry

• ver the last 4 years

Production Growth Comparison 2009 - 2012 CAGR %

Solid Operating Track Record (ii)

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Prime Location Gives Significant Advantage in Cost (i)

Samarinda Mahakam River Muara Jawa Muara Berau Makassar Strait Major City Jetty Transhipment Point

~55 km (total ~120 km) ~65 km

kilometers 12 24 36 48

ABN Kutai Energy

Adjacent locations for all 3 mines

TMU ABN IM

1

17km

ABN Jetty IM Jetty

~ 5 km

Furthest pit to jetty 25km | with closest one ~5km

3

Major city is less than 50 km

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Close proximity transhipment point & jetty

2

Toba owns all infrastructures (coal processing plants, overland conveyors, and jetties), giving significant operating leverage vs other concessions in surrounding areas

Prime Location

TMU - IM Hauling Road Balikpapan Jetty

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Prime Location Gives Significant Advantage in Cost (ii)

Coal Chain Distance (a)

In km

Toba’s transportation costs are low due to its close proximity to the Transhipment Point

Notes : (a) Weighted average distance based on respective production usage of each transportation facility (from pit to vessel) (b) Represent ABN & IM only Source : Broker Reports

(b) 90

29 47 45 39 71 67 10 20 30 40 50 60 70 80 2009 2012

Global Cash Cost Environment & Indonesia’s Position

Average cash cost prices have moved up by close to 50%...

Lowest Median Weighted average US$/ton

• Prod. Cash Cost by Country (Thermal Coal)

Cash Cost Curve in 2009 Cash Cost Curve in 2012 Global Cash Cost in 2012

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Cost Reduction

Cost Reduction Initiatives

ABN IM TMU

SR (x) Dump Distance (m) 2012A 2013F SR Dump Distance (m) SR Inftrastruc ture (US$/ton) 15.3x 13.0x 14.9x US$13/ton US$4 – 6 /ton 2,365 2,174 12 – 14x 1500 - 1800 9 – 11x 1800- 2100 9 – 10x

Potential Cost Saving

Up to US$8/ton US$10 - 20 /ton Up to US$8 /ton

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ABN 66.1% IM 15.7% TMU 18.2%

Coal Reserves Coal Resources

(MM Tons) Proved Probable Total Reserves Measured Indicated Inferred Total Resources

ABN 70 47 117 73 70 13 156 IM 11 10 22 24 10 4 37 TMU 5 4 8 9 8 26 43 Total 86 61 147 106 88 43 236

Reserves and resources upside from conversion of resources to reserves and further exploration of concession areas

Notes:

• 1. Differences in totals are due to rounding off
• 2. The Runge Report for ABN was as of 31 December 2011, the PT SMG Consulting Report for IM was as of 1 January 2012 and the Marston Report for TMU

was as of 31 October 2011

Total: 147 MM Tons Total: 236 MM Tons

Substantial Reserves and Resources Support Production Expansion

Coal Reserves and Resources (1) (2) (JORC) Reserves (1)

MM Tons

Resources (1)

MM Tons

ABN 79.6% IM 15.0% TMU 5.4%

Note: Areas already explored

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Substantial Reserves and Resources due to Vast Unexplored Areas and Relatively Long Reserve Life

• Explored 3,704 of 7,087 hectares of concession areas

(52% of total concession area) and drilled 3,512 boreholes as of 31 December 2011

• Additional JORC coal reserves and resources expected to

be discovered, especially at TMU where only 680 hectares

• ut of 3,414 hectares of concession (20% of TMU

concession area) have only been explored

TMU

Source : Broker report

Toba’s reserve life of over 20 years compares favorably with other listed peers Toba’s Concessions Reserve life ~ Industry Comparison

ABN IM TMU

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Recent Coal Market Update

Recent Coal Prices Trend

Range-bound US$77 -95/ton

• Coal Prices have bounced back from high 70’s in 2Q 2013 and now on decline

trend within US$ 77-83/ton

• Going forward, prices are expected to trade within range-bound of US77-95/ton

Source: Newcastle Index 70 80 90 100

Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13Mar-13 Apr-13 May-13 Jun-13

2012 2013

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Strong Relationships with Multinational Customers

Major Customers DRAGON ENERGY GROUP

Major customers provide the stable business support for Toba’s marketing… … minimum marketing fees because Toba handles our own marketing internally

Toba’s Marketing Operations

 Central Marketing Operations of all 3 subsidiaries  Internally developed customer base that allows Toba to have low marketing costs  Balance mix of long term contracts, short term and spot  Active participation in reputable conference and trade shows to promote Toba brand  Enhance marketing strategy to sell directly to end-users

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Business Overview

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Manage cash costs: Lower SR, Shorten Dump Distance Construct hauling road from TMU to IM Share current infrastructures : CPP & Jetty & lower costs Centralize fuel supply Optimize sales through hedging activities Increase our reserves through acquisition and exploration

Strategic Initiatives to Manage Changing Environment

Returning future Profitability Level Strategic Initiatives / Response to Changing Coal Prices 1 2 3 4 5 6

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Executions and Achievements so far… (I)

Manage Cash Cost: lower SR & dump distance

OPERATION

Achievement Execution Initiative

Construct Hauling Road from TMU to IM Share Existing Infrastructure

Adjusted mine plan in 3Q12 and lowered dump distance despite pre- stripping in 1Q13 at ABN Construction commenced end-2012 and was scheduled for completion in 2Q13 TMU commenced infra-sharing using ABN’s road and IM’s CPP & Jetty

Provide Financing to IM

FINANCIAL

Optimize Sales through Hedging Streamline Fuel Supply

Maximized current ideal capital structure by using loan to finance new CPP construction and land compensation Made available at Toba’s disposal coal hedging line with notable financial institutions Sourced constant bulk supply from major fuel supplier to allow for good monitoring of effective fuel usage Secured 3-year US$ 15 mn term loan from SCB at competitive lending rate

• f LIBOR + applicable margin

No hedging facilities has been utilized. Sold ~70% of 2013 sales volume using fixed pricing, and securing cash prepayments Cash cost is on track to be lowered ~US$8/t by FY13 Hauling road was completed in May 2013, ahead of schedule TMU’s underwent significant production ramp-up from 25K tons in April 2013 to 72K in June 2013

 

Sourced supply at competitive price, while continuing to seek

• ther sources with better pricing



In Progress In Progress In Progress

Conduct Joint Mine Plan

Maximizing extraction of ~2 MT of high quality coal reserve with low SR ABN & IM commenced joint- border mining end-2012

In Progress

Achievement Execution Initiative

Executions and Achievements so far… (II)

Secure Sales Volume and Maintain this Activity continuously

COMMERCIAL

Achievement Execution Initiative TOBA successfully sold and secured ~ 50-90% of targeted sales volume for 2013

Develop and Implement Corporate Social Responsibility

CORPORATE SOCIAL RESPONSIBILITY / ENVIRONMENT

Achievement Execution Initiative

• Created Educational Program for

local Communities

• Provided health services to local

communities

• Created local employment

Green and Blue Proper Mining awards in East Kalimantan for ABN and IM

• ABN secured ~ 80-90% of 2013

targeted sales

• IM secured one-year contract

with one of its major customers at competitive price

• TMU secured 50% prepayment

from one of buyers

Enhance Marketing Expertise

TOBA negotiates directly with logistics providers Internal marketing team currently handles sales activities

Maximize Cost Efficiency

Lower logistics cost (barging costs) by 18% from 1Q13 to 2Q13

   

TOBA does not depend on third party marketing agent

In Progress

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…Next: Objectives in 2H 2013 (I)

FINANCIAL

Execution Initiative

Finalize Capex

OPERATION

Status Execution Initiative

• Completed Coal Processing Plant

(CPP) at IM to increase production capacity to 6 MT from current capacity of 3 MT

• Processed constructing underpass

at ABN to shorten dump distance and to increase efficiency Status

• Expected to be completed by the

end-3Q13

• Expected to be completed by end-

4Q13

Potential Concession Acquisition

Depending on valuation

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• Seeking concession opportunities in

1H 2013

…Next: Objectives in 2H 2013 (II)

COMMERCIAL

Execution Initiative

Develop and Implement Corporate Social Responsibility

CORPORATE SOCIAL RESPONSIBILITY / ENVIRONMENT

Execution Initiative Aiming to be eligible for mining awards for all three mines

Maximize Cost Efficiency

Aiming to continue lowering logistics cost i.e. by another 10-15%, equivalent to 25% cost savings

Increase Cooperation and Internal integration with Suppliers

Working together with contractors on fleet management and supply parts management with end-providers Status Still in negotiation. Expected to be completed in 2H 2013 Expected to be completed in 2H 2013 Status Expected to be achieved in 1Q14

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Toba’s Milestone 2013

2007 2008 2009 2010 2011 2012

• Hauling Road TMU – IM

completed ahead of schedule

• TMU Production ready

for ramp up to 80 - 100 K tons/month

May’13 Sept’13

• New CPP at IM

expected to be completed

• IM’s capacity

expected to increase up to 6 MMTPA

Oct’13

• 2nd underpass in

ABN expected to be completed

Apr’13

• TMU set up mine
• perations in new

pit (block 4)

• Border-mining at

ABN & IM commenced

Jan’13

• IM entered into

new Mining Contract with RPP for 5 years

Toba is on track in integrating its operation and infrastructure capabilities

………..

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Integration of three (3) mines

• Benchmarking and

sharing between departments and functions

• Optimize and

coordinate mine planning and logistics

• Centrally coordinate

and streamline corporate finance, legal, human resource and CSR functions

• Joint mine plan and

infrastructure sharing

1

Increase coal reserve and resource

• Continue exploration

activities to increase proven and probable reserves as only 52% has been explored to JORC standard

• Consider opportunities

to acquire coal concessions with significant reserves

3

Strengthen existing and develop new customer relationships

• Supply a higher

proportion of sales volume to end users, while maintaining relationships with existing coal traders

• Target customers in

Japan, Taiwan, South Korea, China, Vietnam and Hong Kong, South East Asia and India

4

Continue to focus on health and safety, environmental track record and commitment to CSR

• Maintain and enhance

high international

• perating standards,

utilize automated mining methods to minimize accidents and enhance safety

• Foster community ties

through development programs as well as job creation

5

Organically increase coal production levels

• Expand coal production

through increased production and mine development activities

• Strengthen

relationships with third party mining contractors and work closely with them to improve their productivity

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Toba’s Business Strategies

Growing Reserves and Maintain Profitability at Different Cycles

Toba’s Operational Performance in 2Q 2013

Quarterly Production & Stripping Ratio (SR)

Thousand Tons

Production Summary

1Q13 2Q13 Change Comment Production (Mn tons) SR (x) 1.29 1.50 15.1 13.6 1.44 1.37 Sales volume in 1Q13 was slightly higher than in 2Q13 mainly due to inventory clearance accumulated from 4Q12

• 4.9%

16.6%

• 9.9%

Q-o-Q production in 2Q13 increased by 16.6% resulting from completion of pre-stripping at ABN and TMU SR fell due to completion of pre-stripping at ABN Sales (Mn tons)

1,097 1,373 1,574 1,587 1,287 1,501 17.6x 16.6x 14.2x 12.1x 15.1x 13.6x

5x 10x 15x 20x 500 1,000 1,500 2,000 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q2013 2Q2013

Production volume Stripping Ratio (SR)

• Production volume of 2.8

MMT in 1H 2013 was 44%

• f our FY 2013 production

target

• To achieve FY target of

5.8MT-6.4MT, TMU is expected to be instrumental in boosting

• verall

growth via continued ramp-up

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ABN Operational Performance

Production & Stripping Ratio

Thousand Tons

 Despite higher than anticipated rainfall delayed operational activities in 1H13, ABN still managed to increase production by 7.6% from 1Q13 to 2Q13  ABN’s 2nd underpass is currently under construction and expected to be completed by 4Q13 with aim to lower OB dump distance  At 14.2x SR, for every 100 meter-decrease in dump distance is expected to reduce cost by~US$0.73/ton, contributing to ~US$ 4.3/ton in FOB cash cost saving

Operational Advantage & Focus

Short coal hauling distance 4km High Built Crusher Cap 10 mm ton/year Barge Loading Jetty Loading Speed of up to 1,800 ton/hour Under-pass: Capitalizing on Infra Strength

1 2 3 4

ABN

Key Highlights

TMU IM

PT Kutai Energi 884 1,078 1,224 1,225 925 995 17.6x 17.1x 14.7x 12.6x 16.6x 14.2x

5x 10x 15x 20x 500 1,000 1,500 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q2013 2Q 2013 Production volume (mt) Stripping ratio

Dump distance (m) 2,492 2,461 1,978 1,723 1,719 1,864

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IM Operational Performance

 IM’s production in 2Q13 increased by 30% Q-o-Q, contributed by higher production volume from border mining  On y-o-y basis, dump distance fell by ~1000m, decreased by 40%  At 13x SR, for every 100 meter-decrease in dump distance is expected to reduce cost by~US$0.71/ton, contributing to ~US$ 7.6/ton in FOB cash cost saving Key Highlights Production & Stripping Ratio

Thousand Tons

Operational Advantage & Focus

Short coal hauling dist. < 5km CPP Ramp up to 6MM TPY Conveyor for TMU & Others Cross Border Mining with ABN

1 2 3 4

TMU ABN

PT Kutai Energi

190 236 265 272 278 360

14.6x 14.5x 13.1x 9.7x 11.2x 12.7x

0x 5x 10x 15x 20x 250 500 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013

Production volume (mt) Stripping ratio

Dump distance (m)

1,693 2,740 2,136 2,284 1,698 1,662

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TMU Operational Performance

Key Highlights Production & Stripping Ratio

Thousand Tons

Operational Advantage & Focus

 TMU’s production in 2Q13 increased by 74% Q-o-Q, mainly due to strong contribution from recently-opened Block 4  TMU’s hauling road to IM was completed ahead of schedule in end-May

• 2013. To date, IM has been using IM’s CPP and jetty facilities for coal

shipment  In June 2013, production reached 72,000 tons/month, rising 125% from 32,000 tons/month in January 2013. This level of productivity is expected to be maintained for the rest of year 16-17km Hauling Road to ABN is completed Integrate CPP Ops with IM Mine operations commenced at Block 4

1 2 3

ABN IM

PT Kutai Energi

Note: - - - Hauling road

23 59 85 90 84 146

45.6x 14.4x 17.0x 10.8x 11.2x 12.7x

5x 15x 25x 35x 45x 50 100 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Production volume Stripping Ratio 32 34 22 25 50 72 10 20 30 40 50 60 70 80 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13

TMU Coal Production (ktons)

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Financial Highlights

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Financial Performance First Half 2013

• In 2Q13, SR was

lowered by 10%, while production increased by 17%...

• …resulting in 6%

decline in adj FOB Vessel cash cost

• ASP slightly rose by 3%

despite 8% Q-o-Q fall in NEWC Index…

Notes (a) FOB vessel cash costs: COGS, Selling Expenses, Royalty,excluding depreciation fixed assets and amortization of exploration and development (b)

• Adj. FOB vessel cash costs: COGS, Selling Expenses, Royalty excluding depreciation fixed asset and amortization of

exploration and development asset & without accounting for component of deferred striping cost (c) YTD means YTD until June 2013

• … EBITDA and Net

Income increased by 32% and 11% respectively

1 2 3

TOBA 1Q 2013 2Q 2013 YTD 2013 Change % Operation Sales Volume kton 1.435 1.367 2.802

• 5%

Coal production kton 1.287 1.500 2.787 17% Stripping Ratio x 15.1 13.6 14.3

• 10%

NEWC Index US$/ton 93.0 85.9 89.5

• 8%

Per Ton Basis ASP US$/ton 66.4 68.1 67.2 3% FOB Vessel Cash Cost US$/ton 55.4 54.9 55.2

• 1%
• Adj. FOB Vessel Cash Cost US$/ton

59.3 56.0 57.7

• 6%

EBITDA US$/ton 6.6 9.1 7.8 39% Financial Sales US$'000 94,942 93,138 188,079

• 2%

Gross Profit US$'000 14,392 16,692 31,084 16% Operating Profit US$'000 7,745 10,655 18,400 38% EBITDA US$'000 9,448 12,486 21,934 32% Net Income before Minority Interest US$'000 5,975 6,616 12,591 11% Ratio Gross Profit Margin % 15.2% 17.9% 16.5% 18% EBITDA Margin % 10.0% 13.4% 11.7% 35% Net Profit Margin % 6.3% 7.1% 6.7% 13%

37

Financial Performance – 1H 2013 vs 1H 2012

Note (a) FOB vessel cash costs: COGS, Royalty, Selling Expenses excluding depreciation and amortization

• Coal production grew 13% (yoy)

driven by TMU and border mining at IM

(a)

1H 2012 1H 2013 Change % Operation Sales Volume million ton 2.45 2.80 14.1 Coal Production million ton 2.47 2.79 13.0 Striping Ratio x 17.1 14.3 (16.4) NEWC Index US$/ton 105.3 89.5 (15.0) Financials Sales US$ Million 202.86 188.10 (7.3%) Gross Profit US$ Million 35.90 31.10 (13.4%) Operating Profit US$ Million 25.11 17.82 (29.0%) EBITDA US$ Million 27.63 21.92 (20.7%) Net Income US$ Million 18.15 12.65 (30.3%) Net Income after Minority US$ Million 9.73 6.61 (32.1%) Interest Ratio Gross Profit Margin % 0.18 0.17 (6.6%) EBITDA Margin % 0.14 0.12 (14.4%) Net Profit Margin % 8.95 6.73 (24.8%) Per Ton Basis ASP US$/ton 82.6 67.2 (18.6%) FOB Vessel Cash Cost US$/ton 67.6 55.0 (18.6%)

• EBITDA declined 20.7%

attributable to 18.6% drop in ASP, but compensated by lower COGS and increased sales volume

• Toba’s 1H13 production achieved

44% of 2013 highest production target of 6.4 million tons

• FOB vessel cash cost slashed by

18.6% yoy mainly due to lower SR and shortened dump distance

38

Evolution of FOB Vessel Cash Cost

• n Quarterly Basis

ABN IM 1Q 2012 2Q 2012 3Q 2012 4Q 2012 2Q 2013

• Adj. FOB vessel

cash cost (b) US$74/ton US$73/ton US$64/ton US$66/ton US$64/ton US$49/ton SR 17,6x 17,1x 14,7x 12,6x 14,6x 14,5x 13,1x 10,5x 14,2x 12,9x US$56/ton US$53/ton US$51/ton US$61/ton

Notes (a) FOB vessel cash costs: COGS, Selling Expenses, Royalty,excluding depreciation fixed assets and amortization of exploration and development (b) Adj. FOB vessel cash costs: COGS, Selling Expenses, Royalty excluding depreciation fixed asset and amortization of exploration and development asset & without accounting for component of deferred striping cost

FOB vessel cash cost (a) US$65/ton US$68/ton US$61/ton US$57/ton US$56/ton US$74/ton US$71/ton US$57/ton US$57/ton US$57/ton

• Adj. FOB vessel

cash cost (b) SR FOB vessel cash cost (a)

TMU

• Adj. FOB vessel

cash cost (b) SR FOB vessel cash cost (a) US$76/ton US$69/ton US$64/ton 45,6x 14,4x 10,9x 10,8x 12,7x US$42/ton US$66/ton US$128/ton US$56/ton US$41/ton US$52/ton US$64/ton

1Q 2013

16,6x 11,3x US$62/ton US$57/ton US$56/ton US$55/ton 11,2x US$44/ton US$49/ton

39

Toba Commands Strong Bargaining Power with Contractor(s)

Toba is a quality partner, consistent in fulfilling its liabilities with business partners even during worst of times. This enables it to demand excellent services and top quality heavy equipment to perform its mining activities

ABN Petrosea 44 34 40 ABN internal Indomining RCI na 58 57 Indomining internal TMU STA 90 45 30 TMU internal Kideco Jaya Agung Petrosea 47 41 PTRO Financial Statement Santan Batubara Petrosea 62 82 PTRO Financial Statement Gunung Bayan Pratam Petrosea 76 114 PTRO Financial Statement Berau Coal BUMA 120 159 DOID Financial Statement Gunung Bayan Pratam BUMA 93 140 DOID Financial Statement Adaro Indonesia BUMA 65 130 DOID Financial Statement Arutmin Indonesia Darma Henwa 85 138 DEWA Financial Statement Berau Coal Darma Henwa 124 169 DEWA Financial Statement Kaltim Prima Coal Darma Henwa 22 44 DEWA Financial Statement Arutmin Indonesia ABM 47 46 ABM Financial Statement Total 73 103 Source AP Days 30 Jun Customer Contractor AP Days 31 Des AP Days 31 Mar

N/A

40

Note (a) FOB Vessel Cash Costs exclude G&A, royalty, marketing fee, depreciation of fixed asset, and amortization of exploration asset, while including deferred striping cost

Toba’s Cash Costs Comparisons

• ABN can operate in higher SR

relative to peers mainly due to lower transportations costs from location advantages

SR 16,6x 11,3x 7,2x 11,7x

FOB Vessel Cash Cost (a)

US$/ton

• The FOB Vessel Cash Cost

calculation excludes marketing fees, in which HRUM and ITMG paid significant amount

• ABN’s cash cost and SR was

high in 1Q 2013 mainly due to pre-stripping activities in Pit 1

1Q 2013 Figures

41

Balance Sheet

• Total Assets as of June 2013 increased

by 13% from December 2012

• Cash and cash equivalent rose by 47%

compared to December 2012

• Shareholders Equity surged by 4% from

December 2012 to June 2013, reflecting positive growth return

Balance Sheet

US$’000

Despite decreasing trend in Coal index price, we have successfully grown total assets through stronger equity base

Dec-12 Mar-13 Jun-13

Movement (Jun'13 - Dec'12)

Cash and cash equivalents 36,307 60,348 53,289 47% Fixed Assets 34,053 35,678 41,337 21% Others 191,166 187,232 199,681 4% Total Assets 261,526 283,258 294,307 13% Debt 49,033 43,352 55,804 14% Other Liabilities 101,549 122,991 123,395 22% Total Liabilities 150,582 166,343 179,199 19% Shareholders Equity 110,944 116,915 115,108 4% Total Net debt/Equity 44% 37% 48%

114 97 90 87 93 86 80 85 90 95 100 105 110 115 120 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1 Q 2013 2Q 2013

NEWC Index Price (US$/tons)

34 16 39 36 60 53 35 35 44 49 43 56 10 20 30 40 50 60 70 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Cash Debt

42

Debt and Cash Position

Net Debt Position

US$ Mn

2% 34% 6% 11% Net Cash 3% Net Debt to Equity

Cash balance rose from US$16.5 mn in 2Q12 to US$53.3mn in 2Q13, causing net debt position to improve from US$18.5mn in 2Q12 to US$3.0mn in 2Q13

Jun-12 Jun-13

Cash Generated from Operation 17,348 30,293 Income Tax Payment (37,284) (4,962) Interest income/expenses (747) (791) Cash flow from Operation (20,683) 24,540 Cash flow from Investment (108,205) 4,162 Cash flow from Financing 86,547 (11,304) Movement in cash flow (42,341) 17,399 Change in Cash due to forex 257 (416.80) Beginning Cash 58,573 36,307 Ending Cash 16,489 53,289

43

Strong Cash Flow Generation

• During current volatile coal market, Toba
• pts to predominantly enter into fixed

pricing contracts with buyers and yet is still able to secure sales on cash prepayment basis at competitive pricing

• Positive cash position increased by

223% from US$ 16mn in 1H 2012 to US$ 53mn in 1H 2013 mainly due to prepayment and lower SR

Cash Flow Statements

US$’000 Extraordinary transaction: Significant CF from Investment & Financing as a result of minority restructuring

44

CSR & Environmental Highlights

5

45

• Toba is continuously developing and implementing its corporate social responsibility programs

– Creating educational opportunities for local communities including renovating schools, training teachers, providing post-graduate educational assistance and creating a literacy program for adults and a scholarship program for school-aged children – Providing health services to the local communities – Helping groups of farmers plant crops of vegetables and bamboo and assisting with land rehabilitation – Creating local employment opportunities by sourcing some of the Company’s site workforce from the neighboring areas

Helping Farmers Plant Crops Creating Educational Opportunities Providing Health Services

Toba is Committed to Being a Responsible Corporate Citizen

46

Awards

Ernst & Young Social Entrepreneur of the Year 2011 East Kalimantan Green Proper Mining Award ABN (For 3 Consecutive Years) East Kalimantan Blue Proper Mining Award Indomining (For 2 Consecutive Years)

47

Recognition

Forbes Indonesia ranks PT Toba Bara Sejahtra as one of Indonesia’s Top 50 companies

Note: Ranking was based, among

• thers, on 5-year average ROA,

3- year sales growth, 3-year EPS growth and governance

48

Appendix

49

• Current production capacity (31 December 2012):

– Crusher: 10 MM tonnes p.a. – Conveyor: 10 MM tonnes p.a.

• Produces two varieties of blended thermal coal

– ABN 52: Marketed CV(1) of 5,200 kcal / kg GAR – ABN 55: Marketed CV of 5,500 kcal / kg GAR – ABN 58 : Marketed CV of 5,800 kcal / kg GAR

• Substantially all of the owners of the land within ABN’s

concession area have been compensated and ABN has been granted the exclusive right to mine those areas

• Area: 2,990 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
• Type of license: IUPOP
• Expiry date: 1 December 2029
• Commencement of production: September 2008
• 2012 production: 4.4 MM tonnes
• Mining consultant: PT Runge Indonesia

ABN: Coal Concession Overview

IM TMU

ABN Jetty

ABN

Overview Operations Marketing

• Historically sold between 50%-100% of its annual production through

long-term (longer than 1 year) with coal trading companies – The remainder were sold on the spot market

• Currently, IM sells coal to buyers based on fixed priced contracts up

to one year, backed with pre-determined cash prepayments

Note:

• 1. Calorific value

50

• Current production capacity (31 December 2012):

– Crusher: 3.0 MM tonnes p.a. – Conveyor: 4.5 MM tonnes p.a.

• Produced one variety of blended thermal coal “Indomining”

with marketed CV(1) of 5,700 kcal / kg GAR in 2012 – May produce additional varieties of blended thermal coal in the future

• Has compensated the majority all of the owners of the land

within its concession area for their land and has been granted the exclusive right to mine those areas

• Area: 683 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
• Type of license: IUPOP
• Expiry date: IUPOP effective until 2023 and can be renewed for

another 10 years

• Production commencement: August 2007
• 2012 production: 1 MM tonnes
• Mining consultant: PT SMG Consultants

IM: Coal Concession Overview

IM TMU

Overview Operations Marketing

• Historically sold approximately 50% of its annual production through

short-term (one year or shorter) contracts with coal trading companies – Clients include Glencore, Flame, Peabody, Dragon, Aempire

• The remainder are sold on the spot market
• Currently, IM sells coal to buyers based on fixed priced contracts up to
• ne year, backed with pre-determined cash prepayments

IM Jetty

Note:

• 1. Calorific value

ABN

51

• Current production capacity (31 December 2012):

– Crusher: 1.4 MM tons p.a.

• Produces one variety of blended thermal coal “Trisensa-

47”, with marketed CV(1) of 4,700 kcal / kg GAR – May produce additional varieties of blended thermal coal in the future

• Area: 3,414 ha
• Location: Loa Janan, Muara Jawa and Sanga-Sanga,

Kutai Kartanegara, East Kalimantan

• Type of license: IUPOP
• Expiry date: 14 December 2023
• Commencement of production: October 2011
• 2012 coal production: ~257,000 tons
• Mining consultant: Marston & Marston

TMU: Coal Concession Overview

Overview Operations & Marketing

Note:

• 1. Calorific value

Kutai Energi haul road and jetty (17 km)

IM ABN TMU

Sungai Sangasanga Sungai Dondang Pulau Seribu

Jetty KE

Completed haul road to ABN and IM (25 km)