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PT Bahari Cakrawala Sebuku

Head offi ce Site offi ceGraha Kirana Building, 15th Floor, Suite 1501 Kanibungan villageJl. Yos Sudarso Kav. 88 Sebuku Island, Kotabaru regencyJakarta 14350 South Kalimantan☎ +62-21-65311267 ☎ +62-542-760375ù +62-21-65311377 ù +62-542-760379ö bcslay@rad.net.id

Status

Contract Scheme : Second Generation PKP2B

Contract Signing : August 15, 1994

Investment Scheme : Foreign Investment (PMA)

Tenement Status : Production

Production Commencement : May 1998

Initial Area : 18,200 hectares (ha)

Retained Area : 5,871 ha

Ownership

Shareholder Share (%) Country of Origin

Straits Sebuku Pte, Ltd 80 Singapore

PT Reyka Wahana Digdjaya 20 Indonesia

Company Offi cer

Name Position

Saleh Basarah President Commissioner

Richard Ong Chui Chat Commissioner

Ginarsa Tandinegara President Director

David Lim Director

Hui Mun Leong Director

Milan Jerkovic Director

Sri Kadarsih Prawiranegara Director

OverviewThe Sebuku coal mining area is located on Pulau Sebuku Island in the Province of South Kalimantan. The coal mining area is operated by PT Bahari Cakrawala Sebuku (BCS) under a contract of works obtained by the company from the government through state-owned coal company PT Tambang Batubara Bukit Asam on August 15, 1994.

Pulau Sebuku lies on the southeastern part of the island of Borneo approximately fi ve kilometers (km) to the east of Pulau Laut. Pulau Sebuku, which spans 35 km from north to south and 10 km from east to west, is lowland, with gently undulating topography.

The climate is tropical with the wet season (northeast monsoons) occurring from December to May. Annual average rainfall is 2,400 mm.

coal stockpile, coal terminal, washing plant, air strip, offi ce, water pond, settling pond, workshop was conducted by PT John Holland Indonesia.

Mining concession & reservesSebuku Island is located 3’30’’ south of the equator to the south-east of the island of Kalimantan, approximately 5 km east of Laut Island. The island stretch outs 35 km from north to south and about10

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Pulau Sebuku was one of the most isolated areas in the province before BCS began its mining activities. The island could previously be reached only by speedboat from neighboring Pulau Laut or by a chartered helicopter from Balikpapan. Since the opening of an airstrip on the island in 1998, reaching the island has been much easier now.

With the help of the mining company, a number of infrastructure facilities especially roads have been built on the island. . Nowadays, the island has a road link from North to South, approximately 25 km. The supply for quarry materials and for road construction is abundant on the island.

The construction of the infrastructure facilities for the mine development such as coal haulage, clean

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km from west to east. The island has a subdued topography with a maximum elevation of up to 125 meters along a series of hills that form the elevated eastern part of the island.

To the west of the line of the hills, the topography is gently undulating with elevations typically ranging from 5 meters to 25 meters. The coastal area in the western part of the island comprises a series of grassy freshwater swamps bordered by a well-developed coastal mangrove zone up to 500 meter in width.

Preliminary exploration was undertaken in 1991 with detailed exploration being completed between 1994 and1995. A detailed feasibility study conducted by Coleman and Associates Pty Ltd was completed in 1996. Based on this study, the Directorate of Mines at the Ministry of Energy and Mineral Resources issued a permit allowing the company to begin its mining activities. Starting 2000, the annual production rate has increased to 2 million tons.

The Sebuku concession has a total of 18.5 million tons of mineable coal deposits, including the additional coal reserves identified during exploration activities conducted in the first half of 2003. Most of the additional coal deposits were found in the northern Tanah Putih area. The coal from this area contains less sulphur than the other seams on Sebuku.

The new findings has increased the amount of mineable coal reserves in the concession by about six million tons and extended the mine life to another five years until 2011. Total coal reserves available are approximately 22.32 million tons.

Coal reserves (in thousand tons)Seam Coal reserves in situ Total in situ

Measured IndicatedMain Pit 3,184 - 3,184

Tanah Putih 19,140 - 19,140

Total 22,324 - 22,324

(As of 30 September 2003)

Coal qualityParameter Unit Value

Calorific Value (adb) kcal/kg 6,260

Sulphur (adb) % 0,83

Ash (adb) % 8.97

Total Moisture (ar) % 7 - 12

Reference WP&B 2003

adb: air dried basis; ar: as received; WP&B: Work Program and Budget

Mining & haulingThe Sebuku coal mine is developed through an open cut mining method using bulldozers, excavators, trucks and shovel. The mining operation is carried out by PT Bukit Makmur, which won the contract to conduct the mining activities in September 2003, replacing Leighton, the previous contractor.

The transportation of the overburden is conducted by dump trucks, which are loaded by face shovels and hydraulic excavators.

Coal processingThe run of mine (ROM) stockpile pad has a handling capacity of 100,000 tons but it can occasionally store up to 130,000 tons.

The ROM pad is segregated into several areas for different bypass and wash coals, with stock levels depending on short-term processing requirements.As per production plans, most coals are directly dumped to the hopper for processing to maximize throughput and minimize re-handling. However, sufficient stocks of various bypass and wash coals are always carried to meet specific quality and blending requirements, and to enable processing to continue in all weather conditions or short term disruptions to mining or haulage patterns.

Barging & shipping All product coal are hauled by Volvo trucks from the plant site’s product bin to the coal terminal stockpile at the south tip of Sebuku Island (Tanjung Kepala) for storage, blending and loading out onto barges. The stockpile capacity is 150,000 tons over a four feeder reclaim system.

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Barge loading has run successfully at the designed capacity of 1,200 ton per hour (TPH) although typical loading rates are in the range of 800 to 1,000 TPH and shipping tonnages run between 150,000 - 240,000 tons.

Transshipment is conducted at an offshore location at the sea area with the depth of 16 meters, around 8 km from the coal terminal.

Production & salesThe main buyers of the coal are electricity and cement producers. Specialized coal such as sized coal for the heating market constitutes a small portion of the total production, but it is more expensive compared to other types of coal.

With the increase in the mineable coal deposits, the mining company would further increase its coal sales to meet the growing demand from new power plants. Selling the coal to power plants gives more advantages to the company because, besides being based on long-term contracts, such buyers are willing to pay a premium to the supplier.

Production (in thousand tons)

Year ProductionSales

Domestic Export1998 1,116 95 930

1999 1,548 211 1,379

2000 1,521 230 1,328

2001 1,789 260 1,592

2002 2,065 289 1,715

2003 1,964 106 1,885

2004 2,531 110 2,542

2005 2,999 - 2,823

BCS also exports its coal to India, Japan, Hong Kong, South Korea, the Philippines, Malaysia, Thailand, and Turkey. Sebuku has been lately very active in attracting new customers especially those from Korea and Japan to buy its new lower sulphur coal.

Coal product: Sebuku CoalParameter Unit Typical Range

Total Moisture (ar) % 15.5 14.8 - 16.2

Proximate Analysis (adb)

Moisture % 8.5 7.5-9.5

Ash % 9.3 8.0-9.8

Volatile Matter % 39.7 38.0 - 42.0

Total Sulphur (adb) % 0.91 0.85 - 0.98

Specific Energy (adb) kcal/kg 6,400 6,210 - 6,537

Specific Energy (ar) kcal/kg 5,950 5,850 - 6,100

HGI (ASTM) 43 40 - 47

HGI: Hardgrove Grindability Index adb: air dried basis; ar: as received