TENPT TEKNOLOGI ENERGI NUSANTARA

ICSINDONESIAN COAL SOCIETY PT. TEKNOLOGI ENERGI NUSANTARAINDONESIAN COAL SOCIETY

COAL UPGRADING IMPLEMENTATION IN INDONESIA

Taufik Sastrawinata

Secretary General of ICSPresident Director of PT. TEN

July 5-6, 2012, Beijing, China

Introduction

Government Energy Policy

Coal Map by Resources and Reserves

Coal Map by Calorific Value

Geological Agency 2011

Very High Calorific Value > 7.100 Kcal/kg

High Calorific Value 6 100 7 100 Kcal/kgTOTAL RESOURCES 161.34 Billion TON TOTAL RESERVES 28 17 Billion TONHigh Calorific Value 6.100 7,100 Kcal/kg

Medium Calorific Value 5.100 6.100 Kcal/kg

Low Calorific Value < 5.100 Kcal/kg

TOTAL RESERVES 28.17 Billion TON

Indonesian Coal Reserve per 1 January 2010

Coal Production and Export

CHINA25%

OTHERS20%

JAPAN

MALAYSIA6%

INDIA17%

14%

KOREA9%

TAIWAN9%

Major Coal Mining in Indonesia

EXPORT

40

37.2134.36

Nop2011

PRODUCTION EXPORT

1520253035

24.37

16.89 15.67

0510

PT.ADAROINDONESIA

PT.KALTIMPRIMACOAL

PT.KIDECOJAYAAGUNG

PT.BERAUCOAL

PT.ARUTMININDONESIA

* Million Ton

Long Term Outlook Indonesian Coal Industry

Challenges

Coal Upgrading - Briquette

The Coal Upgrading Briquette (CUB ) will provide a higher heating pg g q ( ) p g gvalue by reducing high moisture by using by drying the coal and to keep the dried product by briquetting

High increase calorific values Best strength and handlingg g No dust and much less fine particles No use of chemicals No change of chemicals characteristic Can be applied to all coals

Process of Coal Upgrading

1 Million Coal Briquetting, Inner Mongolia, ChinaFi i h d 2012Finished 2012

Major Equipment

Coal Upgrading Briquette

After briquettedBefore briquetted

surface inside

Raw Coal and CUB Analysisy

P i t Coal Upgrading-Briquette

Proximate Analysis

(As Received)

Raw Coal

pg g q

After briquette

After 30 days in open air

After 24 hour in water

After 48 hour in water

M i t 46 9 10 46 10 5 12 58 15 56Moisture 46.9 10.46 10.5 12.58 15.56Ash 0.95 1.86 - - -Volatile Matter 27.2 42.86 - - -Fixed Carbon 24.95 45 - - -Total 100 100 - - -Total Sulphur 0 09 0 14Total Sulphur 0.09 0.14 - - -

Heating Value (k l/k ) 3393

5636634 1 349(kcal/kg) 3393 5,634 5,517 5,349

HGI 78 66.77 66.77 66.77 66.77

Coal Price

USD 190.95

Coal Price UpdateCoal Price Update

June 20 (Bloomberg) -- Swap contracts for lower-quality coal from Indonesia, theworlds biggest exporter of the power-station fuel, dropped 3.9 percent, accordingto Ginga Petroleum Singapore Pte. Prices for shipments to China fell 1.1 percent.g g p p p

The contract for sub-bituminous coal with a heating value of 4,900 kilocalories akilogram for loading in July from Indonesia fell $2.50 to $61 a metric ton on a netas-received basis yesterday, the energy broker said in an e-mail today. Theswap for the third quarter was 70 cents lower at $60.80.

Coal with a calorific value of 5,500 kilocalories a kilogram for shipment to SouthChina slipped $1 to $86 a ton on a net as-received basis, Ginga said. The swapfor the third quarter slid 50 cents to $86.

ReferencesReferences

Economic Analysisy

Based on 45 % moisture reduce to 10 % total moisture Based on 45 % moisture reduce to 10 % total moisture Investment cost ~ $ 65 Million for approx. 1 Million ton CUB per year Coal mining production cost ~ $ 20/ton X 1.54 = $ 30.8/ton Coal land and sea transportation etc. ~ $ 5/tonp $ CUB operational cost ~ $ 10/ton Production cost including coal ~ $ 45.8/ton CUB pricing @ 5,600 kcal/kg ( arb) ~$ 86/ton g @ g ( ) CUB sales = $ 86.0 Million per year Production cost, incl. coal $ 45.80 /ton = $ 45.80 Million per year Government royalty 7% ~ 0.07x $86M = $ 6.00 Million per year Gross margin ~ 86 - 45.80 - 6.00 = $ 33.60 Million per year Tax Revenue 25 % = $ 8.40 Million per year Net margin = $ 25.20 Million per year

P b k P i d 2 6 Payback Period < 2.6 years.

Economic Analysis: case CCOW Generation Iy

Based on 45 % moisture reduce to 10 % total moisture Based on 45 % moisture reduce to 10 % total moisture Investment cost ~ $ 65 Million for approx. 1 Million ton CUB per year Coal mining production cost ~ $ 20/ton X 1.54 = $ 30.8/ton Coal land and sea transportation etc. ~ $ 5/tonp $ CUB operational cost ~ $ 10/ton Production cost including coal ~ $ 45.8/ton CUB pricing @ 5,600 kcal/kg ( arb) ~$ 86/ton g @ g ( ) CUB sales = $ 86.0 Million per year Production cost, incl. coal $ 45.80 /ton = $ 45.80 Million per year Government royalty 13.5% ~ 0.135x $86M= $ 11.61 Million per year Gross margin ~ 86 - 45.80 11.61 = $ 28.59 Million per year Tax Revenue 45 % = $ 12.87 Million per year Net margin = $ 15.72 Million per year

P b k P i d 4 1 Payback Period = 4.1 years.

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