28.6 Adaro Energy 2008 Annual Report English

64 Adaro Energy Annual Report 2008 www.adaro.com Over 5,543 Mt of coal was produced in 2007, a 38 increase over the past 20 years. Coal production has grown fastest in Asia, while Europe has actually seen a decline in production. The largest coal producing countries are not conined to one region, the top ive producers are China, the USA, India, Australia and South Africa. Much of global coal production is used in the country in which it is produced with only around 18 of hard coal production being destined for the international coal market. Top Ten Hard Coal Producers 2007 Million Tonnes China 2,549 Russia 241 USA 981 Indonesia 231 India 452 Poland 90 Australia 323 Kazakhstan 83 South Africa 244 Columbia 72 Global coal production is expected to reach 7 billion tonnes in 2030 with China accounting for around half the increase over this period. Steam coal production is projected to have reached 5.2 billion tonnes, coking coal 624 million tonnes and brown coal 1.2 billion tonnes by that time. Coal is traded all over the world with coal shipped long distances by sea to reach markets. Over the last twenty years, seaborne trade in thermal coal has increased by 8 each year with the international trade in thermal coal reaching 718 Mt in 2007 however while this is a signiicant amount of coal it is still only approximately 18 of total coal consumption. Transportation costs account for a large share of the total delivered price of coal, therefore international trade in thermal coal is effectively divided into two regional markets, the Atlantic and the Paciic. The Atlantic market is made up of importing countries in Western Europe, notably the UK, Germany, Holland, Spain and Italy and exporting countries including Colombia, Venezuela, USA, Russia and South Africa. The Paciic market consists of Japan, South Korea, Taiwan, China, Malaysia and India while the exporters comprise Indonesia, Australia, Canada and China. The Paciic market currently accounts for approximately 60 of world thermal coal trade. Top Thermal Coal Importers 2007 Million Tonnes Top Thermal Coal Exporters 2007 Million Tonnes Japan 128 Indonesia 171 Korea 65 Australia 112 Taiwan 61 Russia 85 India 31 Colombia 67 UK 43 South Africa 66 China 42 China 51 Germany 36 USA 24 Inter-regional trade occurs primarily due to inter-regional price variances so South African coal can be found in the Paciic area especially India while Indonesian and Australian coal can be found in the Atlantic region. Owning Adaro Adaro in Summary From Us to You Management Report Running Adaro ‘06 ‘07 ‘08 ‘05 ‘04 ‘03 ‘02 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 International Coal Prices UStonne Understanding Coal – The Where, What, Who and How Europe Spot Price FOB Japanese Benchmark Price FOB Asian Spot Price FOB