Company Presentation First Half 2014 1 Disclaimer These materials - - PowerPoint PPT Presentation

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PT Toba Bara Sejahtra Tbk (“Toba”)

Company Presentation

First Half 2014

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Disclaimer

These materials have been prepared by PT Toba Bara Sejahtra (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 of the Company should be made after seeking appropriate professional advice.

Table of Contents

Marketing Highlights Corporate Events Operational Highlights Financial Highlights Appendix

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3 5 1 2 4

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Corporate Events

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Annual General Meeting of Shareholders Revolving Loan Facility Signing

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Events in 1H 2014

ISO for ABN

19th March 2014: Company signed US$ 75 million revolving loan facility agreement with BNP Paribas Singapore Branch, Citigroup Global Markets Singapore Pte. Ltd., and Standard Chartered Bank Singapore Branch June 2014: Meeting analysis OHSAS 18001: 2007 and ISO 14001: 2004. ABN received ISO 14001 certification : 2004 for Environmental Management System and OHSAS 18001: 2007 for Safety System. Assessment/Audit was done by Lloyd’s Register Quality Assurance (LRQA) and accreditation given by UKAS (UK) 21st May 2014: Company held 2013 Shareholders’ Annual General Meeting at Bursa Efek Indonesia. Main agenda: Approval

• f

2013 financial statements, approval of use

• f profit, and appointment of public

accountant

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Operational Highlights

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Prime Location Gives Significant Cost Advantage

7 Muara Berau Muara Jawa Makassar Strait

~55 km (total ~120 km)

Balikpapan Samarinda

~65 km Major City Jetty Transhipment Point TMU – IM Hauling Road

Kutai Energi

TMU ABN IM

Major city is less than 50 km Adjacent locations for all 3 mines Close proximity transhipment point & jetty Furthest pit to jetty 25 km, with closest

• ne ~5 km

~5 km IM jetty ABN jetty

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

TMU

IM ABN TMU

Toba’s Concessions

Underpass Infrastructure Loading Speed of 1,800 TPH High Built CPP Cap 10 Mn TPA Hauling Road to IM Mine Ops Commenced at Block 4 Short Coal Hauling Distance < 5km CPP Ramp Up to 6Mn Tons/Annum (TPA) Conveyor for TMU & Others Short Coal Hauling Distance 4km

ABN TMU

Infrastructure & Operational Capabilities

INDOMINING

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Integrate CPP Ops with IM

2008 2009 2010 2011 2012 2013 2014e

TMU IM ABN

Yearly Coal Production

Mt : In Million Tons

Operational Data

2008 2009 2010 2011 2012 2013

Production Volume (Mt)

0,8 2,0 4,0 5,2 5,6 6,5 ABN 0,1 1,1 3,1 3,8 4,4 4,2 IM 0,7 0,9 1,0 1,4 1,0 1,4 TMU

• 0,0

0,2 0,9

Stripping Ratio (x)

11,9 10,5 9,9 12,7 14,9 13,4

Cumulative Production achievement >10 million tons Cumulative Production Achievement >20 million tons

Solid Operating Track Record

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5.6 5.2 4.0 2.0 0.8 6.5 7.2 – 7.8

Note: 2014e: Toba’s Production target in 2014

• Production

volume rose significantly from only ~800,000 tons in 2008 to ~6.5 mn tons in 2013, booking CAGR growth of 52.2%

• ver

relatively short period of 5 years

• IM and TMU both contributed to

Company’s 2013 total production’s higher volume growth of ~40% and ~260% respectively

• Stripping Ratio (SR) decreased

from 14.9x in 2012 to 13.4x in 2013 resulting in lowered mining costs

• TMU’s

production solidly increased from quarterly run- rate of ~84,000 tons in 1Q13 to high of ~420,000 tons in 4Q13 post earlier-than-expected completion of hauling road from TMU-IM via ABN in 2Q13

Company Operational Performance in 1H14

Quarterly Production & Stripping Ratio (SR)

Production in Thousand Tons

Production Summary

MT: Million Ton

1H13 1H14 Change Comment Sales Volume (Mt) SR (x) 2.80 3.85 14.3 13.6 37.5%

• 4.7%

Sales volume grew significantly in line with production volume growth SR continued to fall resulting in lower mining cost

• Quarterly production run-rate of 1.9

mt has been maintained for last 3 consecutivequarters due to more streamlined mining operations

• 2Q14 volume reached 2.2 mt, up

from 1.9 mt in 1Q14

• Pre-stripping caused SR to rise q-
• -q from 1Q14 to 2Q14
• SR is expected to normalize in

4Q14

10 2.79 4.07 Production volume grew significantly by 45.9% y-o-y from 1H13 to 1H14 mainly driven by border mining at IM and production ramp-up at TMU 45.9% Production Volume (Mt)

1,298 1,501 1,802 1,950 1,911 2,160 15,1x 13,6x 12,7x 12,7x 13,5x 13,8x

5x 10x 15x 20x 500 1,000 1,500 2,000 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

Production volume ('000) Stripping Ratio (SR)

ABN Operational Performance

ABN

TMU IM

PT Kutai Energi

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Quarterly Production & Stripping Ratio

Production in Thousand Tons

 Quarterly production rose from 1 mn mt to 1.2 mn mt in 2Q14, while quarterly run-rate has stabilized at 1.0 – 1.1 mn mt  Higher q-o-q SR from 14.1x to 14.9x in 2Q14 resulted from pre-stripping activity  SR is expected to normalize in 3-4Q14 Key Highlights

Dump Distance (m) 1.723 1.719 1.864 1.843 1.779 1.894 1.842 1,225 925 995 1,188 1,101 1,003 1,213

12,6x 16,6x 14,2x 12,7x 13,1x 14,1x 14,9x 5x 10x 15x 20x 500 1,000 1,500 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Production volume ("000) Stripping Ratio

TMU Operational Performance

ABN IM

PT Kutai Energi

Note: - - - Hauling road

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 Post completion of hauling road at TMU to ABN in 2Q13, production run-rate significantly rose from low of 80-90K per quarter up to average 380K per quarter over last 3 quarters of 4Q13, 1Q14, and 2Q14  SR slightly increased 2.8% q-o-q from 11.4x to 11.7x due to pre-stripping activity. SR dropped y-o-y from 12.7x in 2Q13 to 11.7x in 2Q14 due to better mining operations Key Highlights Quarterly Production & Stripping Ratio

Production in Thousand Tons 85 84 146 275 420 362 379 10,8x 11,2x 12,7x 10,3x 11,1x 11,4x 11,7x 5x 15x 25x 35x 45x 50 100 150 200 250 300 350 400 450 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Production volume ('000) Stripping Ratio

IM Operational Performance

TMU ABN

PT Kutai Energi

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Quarterly Production & Stripping Ratio

Production in Thousand Tons

 Quarterly production run-rate stabilized at 550K in 1Q14 and 2Q14 respectively, up from quarterly run-rate of c.300-350K in 1Q and 2Q13. hence on y-o-y, production volume rose 74.9% from 638K to 1.1 million mt in 1H14  SR fell 6.6% q-o-q to 12.8x in 2Q14 but SR rose on y-o-y basis from 1H13 to 1H14 factoring in higher pre-stripping activity. Pre-stripping is expected to continue in 3Q14 prior to normalizing in 4Q14 Key Highlights

Dump Distance (m) 2.284 1.698 1.662 1.728 1.570 1.904 1.751

272 278 360 339 425 547 570 9,7x 11,2x 12,7x 14,7x 12,8x 13,7x 12,8x 0x 5x 10x 15x 20x 250 500 750 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 Production volume ('000) Stripping Ratio

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Financial Highlights

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Evolution of Quarterly FOB Cash Cost from 2012-2014

Constant convergence between FOB vessel cash cost and adjusted FOB vessel cash cost underline normalization of SR overquarterly period resulting from more efficient mine operations

Quarterly FOB Vessel Cash Cost In US$/ton

Notes: (1) FOB Vessel Cash Cost = COGS including royalty and selling &marketing expense – depreciation and amortization (2) Adj. FOB vessel cash costs = COGS, including selling & marketing expense and royalty – depreciation & amortization of exploration & development and excluding deferred stripping cost

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67 69 60 57 55 55 53 49 49 52 77 73 63 52 59 56 51 52 52 52 17,7x 16,6x 14,2x 12,0x 15,1x 13,6x 12,7x 12,7x 13,5x 13,8x

0x 3x 6x 9x 12x 15x 18x 20 40 60 80 100 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14

FOB Vessel Cash Cost

FOB Vessel cash cost

• Adj. FOB Vessel cash cost

SR

18.9 38.3 4.6 6.2 0.3 4.1 1H13 1H14 TMU IM ABN

1H 2014 Highlights

EBITDA surged by 74.7% y-o-y from US$ 21.9 mn in 1H13 to US$ 38.3 mn in 1H14 FOB vessel cash cost was lowered by 5.0% y-o-y, resulting from lowered overall SR by 4.7% y-

• -y from 14.3x in 1H13 to 13.6x in

1H14 Production volume expanded 45.9% y-o-y from 2.79 mn tons in 1H13 to 4.07 mn tons in 1H14 on the back

• f

significantly higher volume contributions from ABN,TMU and IM

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Production (in Mt)

Total 2,790 4,070 45.9%

Cash Cost (in US$/ton)

Average

55.0 52.3 5.0%

EBITDA (US$ Mn)

Total 21.9 38.3 104,1%

1 2 3

1,920 2,216 640 1,116 230 740 1H13 1H14 TMU IM ABN 56.6 55.3 55.5 51.1 43.1 45.6 1H13 1H14 TMU IM ABN

12.7 20.7 1H13 1H14 21.9 38.3 1H13 1H14 188.1 246.8 1H13 1H14

1H 2014 Financial Performance

Sales

US$ million

EBITDA

US$ million

Net Income (a)

US$ million Note: (a) Net Income before minority interest (b) Figures are unaudited

• Weaker NEWC Index price impacted ASP by 4.9% from US$ 67.20/ton in 1H13 to US$ 63.88/ton in

1H14, while sales still grew 31.7% from US$ 188.10 mn in 1H13 to US$ 246.83 mn in 1H14 due to 37.5% increasein sales volume oversame period

• EBITDA surged 74.7% y-o-y resulting from higher sales volume and better mine plan execution, hence

lowering mining costs in process. Combination of Company’s on-going cost efficiency initiatives and improvement in sales and marketing activity positively boosted EBITDA margin from 11.7% in 1H13 to 15.5% in 1H14

• Total comprehensive income (before minority interest) stood at US$ 20.61 million in 1H14, up by 62.7% from

US$ 12.67 mn in 1HQ13

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All figures are in million US$ unless otherwise stated 1Q14 2Q14 Changes 1H13 1H14 Changes Operation Sales Volume Mn ton 1,93 1,92 (0,5%) 2,80 3,85 37,5% Production Volume Mn ton 1,91 2,16 13,1% 2,79 4,07 45,9% Stripping Ratio (SR) x 13,50 13,79 2,1% 14,30 13,63 (4,7%) FOB Vessel Cash Cost US$/ton 48,90 52,32 7,0% 55,00 52,26 (5,0%) NEWC Index Price US$/ton 78,10 73,05 (6,5%) 89,54 75,55 (15,6%) Average Selling Price (ASP) US$/ton 62,90 64,81 3,0% 67,20 63,88 (4,9%) Financial Performance Profit (Loss) 1Q14 2Q14 Changes 1H13 1H14 Changes Sales US$ Mn 122,00 124,83 2,3% 188,10 246,83 31,2% Cost of Goods Sold US$ Mn 98,40 103,77 5,5% 156,99 202,17 28,8% Gross Profit US$ Mn 23,60 21,06 (10,8%) 31,10 44,66 43,6% Operating Profit US$ Mn 17,67 14,75 (16,5%) 17,82 32,42 81,9% EBITDA US$ Mn 21,10 17,20 (18,5%) 21,92 38,30 74,7% Profit for the Period US$ Mn 12,80 7,92 (38,1%) 12,65 20,72 63,8% Capex US$ Mn 5,50 2,27 (58,7%) 9,62 7,77 (19,2%) Financial Ratios Gross Profit Margin % 19,4% 16,9% 16,5% 18,1% EBITDA Margin % 17,3% 13,8% 11,7% 15,5% Operating Profit Margin % 14,5% 11,8% 9,5% 13,1% Financial and Operational Highlights EBITDA increased 74.7% y-o-y to US$ 38.3 mn in 1H14 attributable to increased production and lower cash cost by 45.9% and -5.0% respectively

Financial Performance

Note Figures are unaudited

Despite weaker ASP, Sales rose 31.2% y-o-y to US$ 246.83 mn in 1H14 due to 37.5% sales volume growth

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On q-o-q, EBITDA dropped 18.5% to US$ 17.20 mn in 2Q14 stemming from US$ 2.9 mn worth

• f one-off items booked in 1H14

Impact of one-off items filters down to 2Q14 bottom line, hence resulting in lower profitability compared to 1Q14

Balance Sheet

Consolidated Balance Sheet

In Thousand US$

Net Debt to EBITDA & EBITDA to Interest Expense

In Million US$

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• Total assets rose 6.3% to US$ 331.31 mn in 1H14

from US$ 311.65 mn as per end-June 2014

• Over same period, total liabilities increased 5.8% to

US$ 191.61 mn as interest bearing debt rose by 3.5% to US$ 57.83 mn

• Total equity in 1H14 increased 1.3% to US$ 139.70

mn from US$ 130.48 mn, attributable to additional income for the period

Dec-13 Jun-14 Changes (%) Cash and Cash Equivalents 63.302 53.300 (15,8) Fixed Assets 49.033 47.713 (2,7) Others 199.314 230.294 15,5 Total Assets 311.649 331.307 6,3 Trade Payable 62.217 84.825 36,3 Interest Bearing Debt 55.858 57.830 3,5 Advances from Customers 27.906 15.723 (43,7)

Others

35.187 33.230 (5,6) Total Liabilities 181.168 191.608 5,8 Shareholders Equity 130.481 139.699 7,1

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Marketing Highlights

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2.0 2.5 0.7 0.5 0.2 0.9 1H13 1H14 TMU IM ABN

Marketing Performance

37.5%

Contracted Sales Sales Volume, Y-o-Y (in Mn Tons) Product Contribution (GAR) Marketing Highlights

29%

2.80 3.85 21

15% 22% 51% 1% 10%

4700 GAR 5200 GAR 5600 GAR 5800 GAR 5900 GAR

• Average NEWC Index declined by 15.5% from

US$ 89.5/ton in 1H13 to US$ 75.6/ton in 1H14

• Sales volume increased by 37.5%, y-o-y from

2.80 mn tons in 1H13 to 3.85 mn tons in 1H14

• ~80-90% of 2014 sales volume has been secured
• Total sales are mainly contributed from 5200 GAR

and 5600 GAR products

Majority of 2014 sales volume has been contracted with buyers at fixed price

80 - 90% 10 - 20%

Contracted Non Contracted

1H14 Marketing & Sales – Quality & Diversified Buyers

Note: Total Sales 1H14: 3,85 Mt

Initiatives Undertaken:

• Maintaining well-diversified customer base consisting of mainly reputable international traders, while also

growing the no of end-users

• Generating good quality sales backed by quality buyers and favorable terms of payment
• Achieved tighter discount rate to reference market price with ASP of US$ 65-68/ton

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Major customers provide the stable business support for Toba’s marketing… Major Customers Export Destination by Country

40.2% 13.6% 19.3% 13.4% 6.7% 1.9% 0.5% 0.5% 0.5% 3.4%

China Taiwan Korea India Philippines Thailand Malaysia Japan Domestic Others

12.8% 17.0% 7.7% 7.3% 8.1% 3.9% 3.4% 8.4% 23.5% 7.9% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0%

THANK YOU

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Appendix

Growth - Industry Comparables

Production 20 mn> Production 10 – 20 mn Production < 10 mn

39% 35% 36% 31% 42% 65% 32% 160% 41% 40% 16%

EBITDA Growth (2013 vs 2012 YoY )

In million US$

2013 2012

TOBA posted highest EBITDA growth in 2013 amongst publicly listed coal producers...

Source: Internal research; Audited financial statement publicly listed co for period ended 2013

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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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Toba specializes in thermal coal production and comprises three operating subsidiaries: Adimitra

Baratama Nusantara (ABN), Indomining (IM) and TrisensaMineral 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 Mn 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

Reserves

%

Strong growth profile & upside potential

• Produced 5.6 Mn tons of coal in 2012 and grew to

produce around 6.5 Mn tons of coal in 2013

• Prime location provides 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%

• f total area, hence vast area remains unexplored

Revenue (1)

%

EBITDA(1)

%

Resources

%

Total: 147 MnTons Total: US$ 247 Million Total: US$ 38 Million Total: 236 Mn Tons

Notes: Revenue and EBITDA as per 12 last months

ABN 80% IM 15% TMU 5% ABN 66% IM 16% TMU 18%

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ABN 61% IM 23% TMU 16% ABN 76% TMU 12% IM 13%

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: 117 MT- JORC
• Resources: 156 MT- 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

Coal Mining

• PT Toba Bara

Sejahtra Tbk

• PT Kutai

Energi

• PT Pusaka

Jaya Palu Power

• PT

Kartanegara Energi Perkasa

Power 29

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

• 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

• PT Tritunggal

Sentra Buana (Palm Oil)

• PT Toba

Pengembang Sejahtra (Property)

• Others

Other Industry

Established in 2004, PT Toba Sejahtra (TS) is a fast growing Indonesian enterprise with industries, ranging from Energy Sector such as Natural Resources, Power, and Agriculture (Palm Oil) to Property

2007

• IM commenced

production at 200k tons 2011

• TMU commenced production
• Toba production hit 5m tons

2008

• ABN commenced

production at 100k tons

• Toba underwent
• perational 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 since Inception

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

30 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

Initial Public Offering

Key Message during 2013

• Maximizing productivity and

coal sales amid weak coal industry

Proven production achievement where at end-2013 posted volume of 6.5 million tons, above 2013 production target of 5.8 – 6.4 million tons

• Undergoing continuous

efficiency program to improve profitability and competitiveness

A series

• f

projects were completed throughout 2013 to facilitate efficiency program, including “hauling road” and “underpass”

• Increasing financial

capability to foster corporate growth

Good financial standings where cash rose to US$ 63.3 million at end-2013, up by 74.3% from December 2012, while supported by available loan facilities from internationally reputable banks

• Supporting and actively

being involved in Corporate Social Responsibility (CSR)

Actively participating in the development in CSR, and receiving several mining proper awards in 2013 31

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

2

Toba’s Business Strategies

Growing Reserves and Maintain Profitability at Different Cycles

32

• 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

33

• 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 34

• 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

KutaiEnergi 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)

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