Company Presentation 1Q 2014

(1)

1 PT Toba Bara Sejahtra Tbk ( Toba )

Company Presentation

(2)

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.

(3)

2013 and 1Q14 Performances in Review

Corporate Profile

Investment Highlights & Growth Strategies

Business Overview

2014 General Guidance

3

6

5

1

2

4

(4)

(5)

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

o

_{JORC-compliant proved and probable reserves of}

147 Mn tons and measured, indicated and inferred

resources of 236 MM tons

o

_{Coal brands with calorific values ranging from}

4,700 - 5,800 Kcal / kg GAR

Reserves

%

Strong growth profile & upside potential

o

Produced 5.6 Mn tons of coal in 2012 and grew to

produce around 6.5 Mn tons of coal in 2013

o

_{Prime location provides operational cost edge to}

grow as a logistical & operational center for the area

o

Continued exploration effort to increase our Reserves

and Resources. Current reserves only account for 52%

of total area, hence vast area remains unexplored

Revenue

(1)

Total: 147 MnTons

Total: US$ 422 Million Total: US$ 59 Million Total: 236 Mn Tons

Notes: Revenue and EBITDA as per 2013 results

(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: 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 ) PT Sinergi Sukses Utama Roby Budi Prakoso

71.8% 0.8% 6.2% 5.1%

PT Toba Bumi Energi ( TBE )

99.99% (2)

3.6%

ABN Minorities

(7)

Majority Shareholder

Coal Mining

• PT Toba Bara Sejahtra Tbk • PT Kutai

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)

Other Industry

(8)

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

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 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, 6

th

_{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

(9)

(10)

Samarinda

Sungai Mahakam

Muara Jawa

Muara

Berau

Makassar Strait

Major City

Jetty

Transhipment Point

~55 Km

locations for

all 3 mines

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

(11)

Prime Location Gives Significant Cost Advantage (ii)

Coal Chain Distance

(a)

In km

Toba’s transportation costs are relatively 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

(12)

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

only 680 hectares out 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 Concessions

Reserve life ~ Industry Comparison

ABN

IM

(13)

2008 2009 2010 2011 2012 2013 2014e

TMU

IM

ABN

Yearly Coal Production

Mt : In Million Tons

Operational Data

• Production

volume

rose

significantly

from

only

800,000 tons in 2008 to 6.5 m

tons in 2013, booking CAGR

growth

of

52.2%

over

relatively short period of 5 yrs

• IM and TMU both contributed

to total

production’s

higher

volume growth of around 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

of

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

5.6

(14)

Evolution of Quarterly FOB Cash Cost from 2012-2014

Significant decrease in FOB vessel cash cost from around US$ 55.4/ton in 1Q13 to US$ 48.9/ton in

1Q14 stemmed from lower mining cost

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

67 69 ₆₀ ₅₇ 55 55 ₅₃ ₄₉ ₄₉

Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14

(15)

(16)

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

of

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

(17)

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

operations 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

………..

_Sep’13

_Dec’13

• ABN Workshop

(18)

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

Toba has Developed Infrastructure & Exploration

Capabilities

INDOMINING

(19)

(20)

TOBA Operational Performance in 2013

Quarterly Production & Stripping Ratio (SR)

Production in thousand tons

Production Summary

MT: Million Ton

2012

2013

Change

Comment

Sales Volume

(MT)

Sales volume grew significantly in line with production

volume growth

SR continued to fall resulting in lower mining cost

Production volumes of 1.8

MT in 3Q13 and 1.9 MT in

4Q13 were attributable to

TMU’s

contribution

in

boosting overall growth via

on-going ramp up

5.6

6.5 Production volume grew significantly by 16.1% y-o-y

from 2012 to 2013 mainly driven by border mining at

IM and production ramp-up at TMU

16.1%

(21)

TMU as Growth Driver for 2013 and in Future

ABN

IM

PT Kutai Energi

Note:

- - -

Hauling road

4Q12 1Q13 2Q13 3Q13 4Q13

Production Volume Stripping Ratio

84

1Q13 2Q13 3Q13 4Q13

TMU Significant Production Ramp-Up

Production in Thousand Tons

After hauling road completion

May



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

(22)

396.7

421.8

2012 2013

22.5

58.6

2012 2013

12.0

36.1

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

(23)

8.5

1Q 2014 Highlights

EBITDA

surged by a hefty

123.6% y-o-y from US$ 9.4

million in 1Q13 to US$ 21.1

million in 1Q14

FOB vessel cash cost

was

reduced by 11.8% y-o-y,

resulting from lowered overall

SR by 11.0% y-o-y from 15.1x

in 1Q13 to 13.5 x in 1Q14

Production volume

expanded

48% y-o-y from 1.3 million tons

in 1Q13 to 1.9 million tons in

1Q14

on

the

back

of

significantly

higher

volume

contributions from ABN, TMU

and IM

23 Production (in Mn Tons)

936 1,003

Cash Cost (in US$/ton)

(24)

TOBA Operational Performance in 1Q 2014

Quarterly Production & Stripping Ratio (SR)

Production in Thousand Tons

Production Summary

MT: Million Ton

1Q 2013

1Q 2014

Change

Comment

Sales Volume

(MT)

Sales volume grew significantly in line with production

volume growth

SR continued to fall resulting in lower mining cost

1.3

1.9 Production volume grew significantly by 48.5% y-o-y

from 1Q 2013 to 2Q 2014

48.5%

1Q'13 2Q'13 3Q'13 4Q'13 1Q'14

(25)

Quarterly Production & Stripping Ratio

25

• Y-o-y production increased by 7% from 0.9 Mn tons

in 1Q 2013 to 1.0 Mn tons in 1Q 2014

• Stripping Ratio decreased from 16.6x in 1Q 2013

to 14.1x in 1Q 2014

1Q13 2Q13 3Q13 4Q13 1Q14 Production volume (mt) Stripping ratio

270 360 ₃₃₉ 425 547

1Q13 2Q13 3Q13 4Q13 1Q14 Production volume (mt) Stripping ratio

84 147 275 420 362

1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 Production volume Stripping Ratio

ABN Operational Performance

(in Thousands Tons)

INDOMINING Operational Performance

(in Thousands Tons)

TMU Operational Performance

(in Thousands Tons)

• Y-o-y production increased by more than double

from 0.3 Mn tons in 1Q 2013 to 0.6 Mn tons in 1Q

2014

• Higher SR contracted in 1Q 2014 against 1Q 2013

mainly due to pre-stripping activity at new area

after land compensation is completed

• Solid production growth y-o-y at TMU increased by

three-fold

(26)

1Q13

1Q14

Change %

Per Ton Basis

ASP

US$/ton

66.4

62.9 -5.3%

Net Income before Minority

Interest

US$'M

6.0

12.8 114.9%

Ratio

Gross Profit Margin

%

15.2%

19.4%

27.7%

EBITDA Margin

%

10.0%

17.3%

74.0%

Operating Profit Margin

%

8.2%

14.4%

76.4%

Financial Performance

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

(b) Figures are unaudited



Coal production grew 48.5% y-o-y, from

1.3 million tons in 1Q13 to 1.9 million tons

in 1Q14 on the back of significantly higher

volume contributions from TMU and IM

(a)



EBITDA increased by 123.6% attributable

to increased production and lower cash

cost by 48.5% and -11.8% respectively



FOB vessel cash cost was slashed by

11.8% y-o-y mainly due to lower mining

costs

(27)

Dec-13

Mar-14

% Changes

Cash and cash equivalents

63,302

47,411

-25%

Fixed Assets

49,033

48,719

-1%

Others

199,314

203,910

2%

Total Assets

311,648

300,039

-4%

Trade Payables

62,217

69,688

12%

Interest Bearing debt

55,858

49,928

-11%

Advances from Customers

27,906

15,893

-43%

Others

35,187

26,647

-24%

Total Liabilities

181,167

162,156

-10%

Shareholders Equity

130,481

137,883

6%

Balance Sheet



The

Company’s

assets stood at US$ 300.1 million in March 2014 or down 4% from US$ 311.6 as per

end-December 2013



Total Liabilities decreased by 10% y-o-y to US$ 162.2 million in March 2014 from US$ 181.2 million as per 31

st

December 2013. TOBA consistently maintained its net debt to equity at 2% during 1Q 2013 to 1Q 2014



Total Equity in 2013 increased 6% to US$ 137.8 million from US$ 130.5 million as per end-2013, and this was

attributable to additional income for the period

Consolidated Balance Sheet

In Thousand US$

Net Debt Position

In Million US$

Note: Mar-14 Figures are unaudited

60

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

(28)

Marketing Performance

2010 2011 2012 2013 2014

Newcastle Index Average Selling Price

US$

NEWC Index (in US$/ton)

_{Sales Volume, YoY (in Mn Tons)}

Product Contribution

US$ 132/ton

US$ 74/ton

Marketing Highlights

29%

• Average Newcastle Index declined by 16.2%

from US$ 93.2/ton in 1Q 2013 to US$

78.1.3/ton in 1Q 2014

• Sales volume increased by 34.9%, y-o-y

from 1.4 mn tons in 1Q 2013 to 1.9 mn tons

in 1Q 2014

• TOBA has secured ~70-80% of 2014 sales

volume

• TOBA’s sales are mainly contributed from

ABN 56 and TMU 47 products

1.4

(29)

South Korea

21%

Japan

Hong Kong

Vietnam Thailand

Taiwan

7%

China

51%

India

7%

Malaysia

1Q14 Sales and Marketing

–

Quality & Diversified Buyers

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

Philippines

7%

Major Customers

DRAGON ENERGY GROUP

Major customers provide the stable

(30)

30 2014 Guidance

(31)

0.9

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

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

Highest 4Q production volume throughout corporate history

In million tons Above 2013

(32)

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- IM

Capex - TMU

In US$’000 In US$’000 In US$’000

7,863

639 556

9,058

Land Clearance

Exploration Others Capex 828

Building Exploration Others Capex

2,235

Exploration Port Others Capex

Palm Oil Mills 38% Land clearance

31%

Others 4%

Allocates US$ US$ ~9million

Note:

(33)

33 CSR & Environmental Highlights

(34)



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 of 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,

contributing

~US$ 300k

annually for

(35)

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, 15

th

April 2013”

“Kaltim Post,

31 st

_July

2013”

“Kaltim Post,

20 th

_June

2013”

(36)

2007

2008

2009

2010

2

0

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

(37)

(38)

(39)

Toba’s coal quality

is in mid-upper

range

Coal Specifications

Calorific Value

GAR

(40)

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 operating 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

(41)

• 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 CVof 5,500 kcal / kg GAR

– ABN 58 : Marketed CVof 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:

(42)

• 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 one year, backed with pre-determined cash prepayments

Company Presentation 1Q 2014

1

PT Toba Bara Sejahtra Tbk ( Toba )