Company Presentation March 2014 1 Disclaimer These materials have - - PowerPoint PPT Presentation

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PT Toba Bara Sejahtra Tbk (“Toba”)

Company Presentation

March 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.

Content

Performance Corporate Profile Investment Highlights & Growth Strategies Business Overview 2014 General Guidance

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3 6 5 1 2 4 CSR & Environmental Highlights

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Corporate Profile

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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

Reserves

%

Strong growth profile & upside potential

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

produce around 6.5 MM 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 MM Tons Total: US$ 422 Million Total: US$ 59 Million Total: 236 MM Tons

Note: (1) Revenue and EBITDA as per 2013 results

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

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ABN 74% IM 22% TMU 6% ABN 78% IM 14% TMU 6%

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

Coal Mining

• PT Toba Bara

Sejahtra Tbk

• PT Kutai

Energi

• PT Pusaka

Jaya Palu Power

• PT

Kartanegara Energi Perkasa

Power 7

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 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

8 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

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Investment Highlights and Growth Strategies

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Samarinda Sungai Mahakam

Muara Jawa

Muara Berau Makassar Strait Major City Jetty Transhipment Point ~55 Km (total ~120 Km) ~65 Km

ABN Kutai Energy

Adjacent locations for all 3 mines

TMU ABN IM ABN Jetty

IM Jetty

~ 5 km 17km

Furthest pit to jetty 25km | with closest one ~5km Major city is less than 50 km Close proximity transhipment point & jetty

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

Prime Location Gives Significant Cost Advantage (i)

Balikpapan

TMU - IM Hauling Road ~ 120 km

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Prime Location Gives Significant Cost Advantage (ii)

Coal Chain Distance (a)

In km

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

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Note: Areas already explored

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

• nly

680 hectares

• ut
• f

3,414 hectares

• f

concession (20% of TMU concession area) have

• nly 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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2008 2009 2010 2011 2012 2013 2014e

TMU IM ABN

Yearly Coal Production

Mt : In Million Tons

Operational Data

• Production

volume rose significantly from

• nly

800,000 tons in 2008 to 6.5 m tons in 2013, booking CAGR growth

• f

41.5%

• ver

relatively short period of 5 yrs

• IM and TMU both contributed

to total production’s higher volume growth of 40% and 200% respectively

• Stripping Ratio (SR) fell from

14.9x in 2012 to 13.4x in 2013 due to lowered mining costs

• TMU’s production increased

from only 88,000 tons in 1Q13 to high of 414,000 tons in 4Q13 post earlier-than- expected completion

• f

hauling road from TMU-IM via ABN in 2Q13

2008 2009 2010 2011 2012 2013

Production Volume ('mn ton)

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

Evolution of Quarterly FOB Cash Cost from 2012-2013

Significant decrease in FOB vessel cash cost from US$ 57 in 4Q12 to US$ 49.0/ton in 4Q13 stemmed from lower mining cost (overburden removal and dump distance account for two of Toba’s major cost components)

Quarterly FOB Vessel Cash Cost In US$/ton

Notes:

Quarterly cash costs figures are audited

(1) FOB Vessel Cash Cost = COGS including royalty and selling 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 77 73 63 52 59 56 51 51

17.7x 16.6x 14.2x 12.0x 15.1x 13.6x 12.7x 12.7x 0x 3x 6x 9x 12x 15x 18x

• 20

40 60 80 100 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

FOB Vessel Cash Cost

FOB Vessel cash cost

• Adj. FOB Vessel cash cost

SR

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Business Overview

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Key Message during 2013

• Maximizing productivity and

coal sales amid weak coal industry

Proven production achievement where in end of 2013 posted 6.5 million tons above from 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 16

Key Milestones in 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 Oct’13

• New CPP at IM nearing

completion

• IM’s capacity expected

to increase from 3 to 6 million TPA

Nov’13

• 2nd underpass

at ABN 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 to integrate its operation and infrastructure capabilities ……….. Dec’13 Sep’13

• ABN Workshop

completed

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TMU

IM ABN TMU

Toba’s Concessions

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

ABN TMU

Toba has Developed Infrastructure & Exploration Capabilities

INDOMINING

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Integrate CPP Ops with IM

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Performance

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Toba’s Operational Performance in 4Q 2013

Quarterly Production & Stripping Ratio (SR)

Production in Million Tons

Production Summary

MT: Million Ton

2012 2013 Change Comment Sales Volume (MT) SR (x) 5.5 6.4 14.9 13.4 16.4%

• 10.1%

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

• Production volume of

1.8 MT in 3Q13 and 1.9 MT in 4Q13 was attributable to TMU’s contribution in boosting overall growth via

• n-going ramp up

20 5.6 6.5 Production volume grew significantly by 17.0% y-o-y from 2012 to 2013 mainly driven by border mining at IM and production ramp-up at TMU 16.1% Production Volume (MT)

1,587 1,302 1,501 1,802 1,950

12.0x 15.1x 13.6x 12.7x 12.7x

5x 10x 15x 20x 500 1,000 1,500 2,000 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13

Production volume Stripping Ratio (SR)

ABN Operational Performance

ABN

TMU IM

PT Kutai Energi

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Quarterly Production & Stripping Ratio

Production in Thousand Tons

1,225 936 995 1,188 1,101

12.6x 16.6x 14.2x 12.7x 13.1x 5x 10x 15x 20x 500 1,000 1,500 4Q12 1Q13 2Q13 3Q13 4Q13 Production volume (mt) Stripping ratio

Dump distance (m) 1,723 1,719 1,864 1,843 1,779

 Completed Infrastructure projects (underpass and workshop) to increase production and improve cost efficiency  Dump distance was lowered gradually in 2013  3 Consecutive Years East Kalimantan Green Proper Mining Award Key Highlights

IM Operational Performance

TMU ABN

PT Kutai Energi

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Quarterly Production & Stripping Ratio

Production in Thousand Tons 272 270 360 339 425

9.7x 11.2x 12.9x 14.7x 12.8x

0x 5x 10x 15x 20x 250 500 4Q12 1Q13 2Q13 3Q13 4Q13 Production volume (mt) Stripping ratio

Dump distance (m) 2,284 1,698 1,662 1,728 1,570

 Built new CPP, increasing additional 3 millions tpa to become total 6 millions tpa of capacity  Dump distance fell by 31.2% from 4Q12 to 4Q13  2 Consecutive Years East Kalimantan Blue Proper Mining Award Key Highlights

TMU Operational Performance

ABN IM

PT Kutai Energi

Note: - - - Hauling road

85 88 147 275 420 10.8x 11.3x 12.7x 10.3x 11.1x

5 10 15

100 200 300 400 500 4Q12 1Q13 2Q13 3Q13 4Q13

Production Volume Stripping Ratio

88 147 275 420 100 200 300 400 500 1Q13 2Q13 3Q13 4Q13

TMU Significant Production Ramp-Up

Production in Thousand Tons

After hauling road completion

May

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 TMU completed 17 km hauling road in May 2013 ahead of schedule to connect with ABN’s road and IM’s infrastructure facilities (CPP and Jetty). This newly streamlined logistics flow maximizes infrastructure sharing between ABN, IM, and TMU, resulting in TMU production ramp up and much improved overall cost efficiency  In 2013, Toba booked the highest 4Q production volume against previous 4Q volumes throughout its corporate history at 1.9 mn tons, mainly contributed by TMU’s drastic production ramp up Key Highlights Quarterly Production & Stripping Ratio

Production in Thousand Tons

397 422 2012 2013 23 59 2012 2013 12 36 2012 2013

2013 Financial Highlights

Revenue

US$ million

EBITDA

US$ million

Net Income (a)

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

• Although the weak global coal prices affected the Company’s overall ASP by 7.8% from US$ 72.2/ton in 2012 to

US$ 66.6/ton in 2013, Toba nevertheless demonstrated resilience by posting a stable 6.3% rise in revenue from US$ 396.7 million in 2012 to US$ 421.8 million in 2013

• EBITDA surged by a hefty 160.7% y-o-y from US$ 22.5 million in 2012 to US$ 58.6 million in 2013, resulting

from predominantly Toba’s successful strategy in expanding its sales volume, in addition to a combination of the Company’s on-going cost efficiency initiatives and improvement in sales and marketing

• Toba booked total comprehensive income (after minority interest) of US$ 36.1 million, up by a stellar 201.1%

from US$ 12.0 million in 2012

2012 2013 Change % Operation Sales Volume mton 5.5 6.4 15.9% Coal production mton 5.6 6.5 16.6% Stripping Ratio x 14.9 13.4

• 10.1%

NEWC Index US$/ton 96.9 85.2

• 12.1%

Per Ton Basis ASP US$/ton 72.2 66.2

• 8.4%

FOB Vessel Cash Cost US$/ton 62.5 52.5

• 16.0%
• Adj. FOB Vessel Cash Cost US$/ton

65.5 53.7

• 18.0%

EBITDA US$/ton 4.1 9.2 125.0% Financial Sales US$'M 396.7 421.8 6.3% COGS US$'M 348.5 342.3

• 1.8%

Gross Profit US$'M 48.2 79.6 65.0% Operating Profit US$'M 21.1 50.0 137.0% EBITDA US$'M 22.5 58.6 160.7% Net Income before Minority Interest US$'M 12.0 36.1 201.1% Free Cash Flow US$'M (47.3) 40.9 186.5% Capex US$'M 15.4 23.0 49.0% Ratio Gross Profit Margin % 12.2% 18.9% 55.2% EBITDA Margin % 5.7% 13.9% 145.1% Operating Profit Margin % 5.3% 11.9% 122.9%

2013 Financial Performance – Higher EBITDA Margin

Note (a) Adj. FOB vessel cash costs: COGS, Royalty, Selling Expenses excluding depreciation and amortization (b) Figures are audited

• Coal production grew 16.6% yoy

driven by TMU production ramp- up

(a)

• Hence, EBITDA increased by

160.7% attributable to lower cash cost and increased production by

• 16.0% and 16.6% respectively
• FOB vessel cash cost slashed by

16.0% yoy mainly due to lower mining costs (lowered SR and shortened dump distance)

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Strong Balance Sheet – More Room to Grow

• The Company’s assets stood at US$ 311.7 million in 2013 or up 19.2% from US$ 261.5 as per end-December

2012

• Total Liabilities rose by 20.3% y-o-y to US$ 181.2 million in 2013 from US$ 150.6 million as per 31st December

2012 and interest bearing debt expanded by 13.9% to US$ 55.9 million in 2013 from US$ 49.0 million as per end of 2012

• Total Equity in 2013 increased 17.6% to US$ 130.4 million from US$ 110.94 million as per end-2012, and this

was attributable to additional income for the period

Consolidated Balance Sheet

In Thousand US$

Net Debt Position

In Million US$ Net Debt to Equity

11% Net Cash 2% 2%

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36 60 40 45 63 49 43 42 47 56 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013

Cash and cash equivalents Interest Bearing Debt Net Cash

Dec-12 Dec-13

% Changes

Cash and cash equivalents 36,307 63,302 74% Fixed Assets 34,053 49,033 44% Others 191,166 199,314 4% Total Assets 261,526 311,648 19% Trade Payables 58,362 62,217 7% Interest Bearing debt 49,035 55,858 14% Advances from Customers 11,625 27,906 140% Others 31,560 35,187 11% Total Liabilities 150,582 181,167 20% Shareholders Equity 110,944 130,481 18%

Note: Figures are audited

Toba’s Capex Realization in 2013

• In 2013, Toba spent Capex of US$ 22,9 million, allocated mainly for:
• Land compensation,
• Construction of new CPP at Indomining,
• Additional vehicles, machineries and heavy equipment,
• Completion of coal hauling road from TMU to IM through ABN, and
• Second underpass construction at ABN
• In 2013, targeted Capex was US$ 27,1 million, and Toba managed to only spend US$ 22,9

million to meet required investment. This resulted in potential savings and carry-forward of US$ 4.2 million in Capex

In US$’000 5,394 22,970 27,100 5,230 4,319 3,456 1,807 528 2,236

5,000 10,000 15,000 20,000 25,000 30,000 CPP Land comp. Vehicles, machineries and heavy eq Hauling road Underpass Exploration Others CAPEX YTD 2013 CAPEX PLAN 2013

Note: In-house Capex figures for the year ended 2013

Potential Savings US$ 4 mn

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South Korea 10%

Japan Hong Kong Vietnam Thailand

Taiwan 19% China 43% India 14%

Malaysia

2011 2012 2013*) Sales (million tons) ABN 3.7 4.2 4.7 IM 1.8 1.1 1.4 TMU

• 0.2

0.7

2013 Sales and Marketing – Quality & Diversified Buyers

GAR 52 ABN 18% GAR 56HS ABN 22%

GAR 56RS ABN 24%

GAR 58LS IM 8%

GAR 47 TMU 10% Others 18%

Sales by Product

Note: * )This includes inter–subsidiaries sales Note: Sales to export destinations ie. Vietnam, Thailand , Hong Kong, Malaysia and Japan each below 3%

Initiatives Undertaken:

• Commenced building well-diversified customer base and export market coverage
• Generated 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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20 40 60 80 100 120 140 160 180 200 2008 2009 2010 2011 2012 2013

US$ 62.5/t US$ 50.1/t US$ 65.5/t US$ 91.3/t US$ 72.2/t US$ 66.2/t

Newcastle Index Average Selling Price

Average Selling Price

(US$)

Source : Global Coal

• Newcastle Index yearly average declined by 12.0% from US$ 96.9/ton in 2012 to US$ 85.3/ton in

2013

• Comparatively, Toba’s ASP corrected 7.8% from US$ 72.2/ton in 2012 to US$ 66.6/ton in 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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2014 Guidance

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0.9 1.2 1.5 1.6 1.9 0.5 1 1.5 2 4Q2009 4Q2010 4Q2011 4Q2012 4Q2013

Toba’s Performance Guidance

Operation 2012 2013 Changes 2014E Changes

Production Volume (million tons) 5.6 6.5 17.0% 7.2 – 7.8 10.0 – 20.0% Stripping Ratio (x) 14.9 13.4 (10.0%) 12.9 – 13.3 (0.7%) – (3.7%) Average Selling Price (ASP) (US$/ton) 72.5 66.6 (7.8%) 63.0 – 67.0 (4.3%) – (6.0%)

Coal Production 2008 – 2014

In Million Tons 2008 2009 2010 2011 2012 2013 2014e

TMU IM ABN

5.6 5.2 4.0 2.0 0.8 6.5 7.2 – 7.8

Notes: - All figures are rounded up to one decimal point

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Highest 4Q production volume throughout corporate history

In million tons Above 2013 internal guidance

• f 5.8-6.4m

2014E

CAPEX in 2014

• In 2014, Toba targets Capex at US$ 24,9

million with the following allocations:

• Construction of Palm Oil Mills in PKU
• Land compensation at TMU,
• Conveyor at ABN,
• Additional heavy equipment at ABN and

IM,

• Exploration activities in 3 mines

Capex - ABN Capex - TMU Capex- IM

In US$’000 In US$’000 In US$’000

7,863 639 556 9,058 Land Clearance Exploration Others Capex 828 740 148 93 1,809

Heavy equipment Building Exploration Others Capex

2,235 1,078 348 429 589 4,678

Conveyor Heavy Equipment Exploration Port Others Capex

Palm Oil Mills 38% Conveyor 9% Buildings 5% Equipments 8% Exploration 5% Land clearance 31% Others 4% Allocates US$ US$ ~9million

Note: Capex figures based on RKAP 2014 (TOBA, ABN, IM ,TMU and PKU)

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CSR & Environmental Highlights

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• Providing

health services to the local communities

Toba is Committed to Being Responsible Corporate Citizen

• 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

• Creating local employment opportunities by

sourcing some

• f

the Company’s site workforce from the neighboring areas

Toba is continuously developing and implementing its corporate social responsibility programs

• Helping groups of farmers plant crops of

vegetables and bamboo and assisting with land rehabilitation

Creating Educational and Employment Opportunities Providing Health Services Supporting Farm Productivity

Toba is Committed to CSR, contributin g ~US$ 300k annually for Community Development

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Local Media Publication on ABN’s CSR

ABN Awards Scholarships to Hundreds of Elementary and High School Students PT ABN Gives Free Medical Facilities, Milk, and Fruits to 1,460 Children PT ABN Builds Training Center for Local Community ABN’s CSR Successfully Develops Local Women in Home Industry of Cassava Crackers Production

“Kaltim Post, 15th April 2013” “Kaltim Post, 31st July 2013” “Kaltim Post, 20th June 2013” “Kaltim Post, 10th October 2013”

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2007 2008 2009 2010 2 1 1

Target

PROPER Mining Award for ABN, IM, & TMU

Award and Recognition

ABN East Kalimantan PROPER Green Mining Award

2012 2014 2011

Ernst and Young Social Entrepreneur of the Year 2011

2013

Indomining East Kalimantan PROPER Blue Mining Award PT Toba Bara Sejahtra Tbk

Ranks as one of Indonesia’s Top 50 companies

!

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THANK YOU

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Appendix

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’s production growth is among the highest in the industry over the last 4 years Production Growth Comparison 2009 - 2012 CAGR %

Solid Operating Track Record

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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 infrastructure-sharing using ABN’s road and IM’s CPP & Jetty

Provide Financing to IM

FINANCIAL

Optimize Sales through Hedging Centralize Fuel Supply

Maximized current ideal capital structure by using loan to finance new CPP construction and land compensation Made available 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 mm term loan from SCB at competitive lending rate

• f LIBOR + applicable rate

No hedging has been utilized. Sold ~72% 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 88K tons in 1Q13 to 414K in 4Q13

 

Sourced supply at competitive price, while continuing to seek

• ther sources with better pricing



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

42



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

Proper Mining award 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

43

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

44

• 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

45

• 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 46

• 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)

47