W O R K I N G A R O U N D D I F F I C U L T I E S O F

C O A L T R A D I N G I N

E A S T & S O U T H K A L I M A N T A N

A Trader’s Point of View 1

PT. Asia Pacific Mining Resources

TOPICS OF DISCUSSION

�  Kalimantan Island �  Demographics �  Coal Resources & Reserves �  Production & Sales by Province �  Main Difficulties �  Main Considerations for South & East Kalimantan �  Important Considerations �  Conclusion

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5 PROVINCES OF KALIMANTAN

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DEMOGRAPHICS OF SOUTH AND EAST KALIMANTAN

South  Kalimantan   East  Kalimantan  

Land  Area   :   37,530  km2   127,267  km2  

Popula9on   :   3.7  Million     3.6  Million  

Major  Ethnics   :   Banjar   Barjar  

Javanese   Javanese  

Bugis   Bugis  

Madura   Dayak  

Kutai  

Toraja  

Govenor   :   Drs  H  Rudy  Arifin   Mr  Awang  Faroek  Ishak  

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COAL RESOURCES AND RESERVES

                                   Province       Resouces       Reserves      

        (million  tons)       (million  tons)           Coal  Quality   Inferred   Indicated   Measured   Total   Probable   Proven   Total       Low  <5100     1,070   652   672   2,394   398   474   871  

Medium  5100-­‐6100   2,110   2,261   2,071   6,441   657   1,922   2,580  

South  Kalimantan   High  6100-­‐7100   636   431   739   1,806   123   204   327  

Very  High  >7100   18   0   0   18   0   0   0  

Total   3,834   3,344   3,482   10,659   1,178   2,600   3,778       Low  <5100     1,208   1,009   1,314   3,531   403   740   1,143  

Medium  5100-­‐6100   10,864   4,218   4,700   19,781   4,544   2,475   7,019  

East  Kalimantan   High  6100-­‐7100   1,158   968   1,919   4,044   222   441   663  

Very  High  >7100   48   78   72   198   4   32   37  

    Total   13,277   6,283   8,004   27,563   5,174   3,688   8,862  

Grand  Total   17,110   9,627   11,486   38,223   6,352   6,288   12,640  

Note:  Depth  boundary  was  calculated  un9l  100  m  below  earth  surface,  figures  rounded  up  to  the  nearest  thousand  Source:    Center  for  Geology  Resouces,  Geology  Agency  as  per  Dec  2011  

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COAL PRODUCTION BY PROVINCE

Top 5 CCoW Producers 2011  

 (tonnes)    

South  Kalimantan      1   Adaro  Indonesia,  PT    47,667,466    

2   Arutmin  Indonesia,  PT    22,831,551    

3   Baramarta,  PD    4,433,167    

4   Wahana  Baratama  Mining,  PT    4,233,826    

5   Bomeo  Indobara,  PT    2,754,552    

Other  producers    7,227,926    

    Mining  Business  Lisence  **    29,139,632    

Sub  Total    118,288,119    

East  Kalimantan      1   Kal9m  Prima  Coal,  PT   40,451,865  2   Kideco  Jaya  Agung,  PT   31,394,693  3   Berau  Coal,  PT   19,443,967  4   Indominco  Mandiri,  PT   14,764,695  5   Trubaindo  Coal  Mining,  PT   7,020,886  

Other  Producers   148,576,472  Mining  Business  Lisence  **   46,327,580  

Sub  Total    194,904,051    

**  Based  on  the  report  from  the  Provincial  Government  filing.  Source:  Directorate  Enterprise  Coal  Supervision,  Directorate  of  Mineral  and  Coal  Program  Supervision  per  Dec  2011  

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DOMESTIC & EXPORT SALES BY PROVINCE

DOMESTIC  SALES    EXPORT  SALES   TOTAL  SALES  

SOUTH  KALIMANTAN  

CCoW    23,722,297      64,386,338      88,108,635    

Mining  Business  Licence    8,625,202      28,724,952      37,350,154    

Total    32,347,499      93,111,290      125,458,789    

       

EAST  KALIMANTAN          

CCoW    23,994,505      121,490,971      145,485,477    

Mining  Business  Licence    9,401,605      33,093,650      42,495,255    

Total    33,396,110      154,584,621      187,980,732    

**  Based  on  the  report  from  the  Provincial  Government  filing.  

Source:  Directorate  Enterprise  Coal  Supervision,  Directorate  of  Mineral  and  Coal  Program  Supervision  per  Dec  2011  

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MAIN DIFFICULTIES

�  Cash vs LC Payment �  Big vs Small Producer �  Many small producers so cash is king �  Quality considerations : Some coal quality not

available in certain areas. �  Barges vs Vessel Shipment �  Anchorage / Berthing Prospects �  Weather Issues �  Local Issues / Police Checks �  Cost of Stevedoring / Transhipment

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MAIN CONSIDERATIONS

East Kalimantan �  Less police intervention �  More regulated / Less cowboys �  Anchorage – Muara Berau (Jul-Dec) Muara Jawa (Jan-Jun) Adang Bay / Apar Bay Bontang Coal Terminal Tanjung Bara Coal Terminal Tarakan / P. Bunyu �  Berthing - Balikpapan Coal

Terminals �  Many Jetty with Cap of 240’

barges with 5500 MT → Sg. Dondang

South Kalimantan �  More police intervention in terms

of illegal mining activities �  Tarboneo / Jorong / Satui / Tj.

Pemancingan �  Berthing / Indonesian Bulk

Terminal �  North Pulau Laut Coal Terminal �  More Jetty can load 300’ �  High speed loading in Sg. Putting

of approx 10-12 hours per barge �  Tapin Coal Terminal 3-6 hours

loading per barge

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EASTERN KALIMANTAN

PORTS

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SOUTH KALIMANTAN PORTS

IMPORTANT CONSIDERATIONS

�  Experience of suppliers? Traders? Brokers? �  KYS – Know Your Supplier. Track record? �  Quality of coal required �  Payment terms �  Always conduct pre-shipment analysis

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Conclusion

�  Check and recheck �  Do not rush in �  Take time to understand the process and logistical

pitfalls/issues �  Avoid down-payment unless you are comfortable or

supplier have a track record �  Need to control the whole delivery chain from mine

to barge/vessel �  Finally…..

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Thank you 14