COAL MINING PROJECTS BUSINESS ACTIVITIES AND PROSPECTS OF THE COMPANY AND SUBSIDIARIES
BIB
The work area of BIB is specified under Second Generation of Contract of Work No. 007PKPTBA-BI1994 dated August 15, 1994
between the government and PT Tambang Batubara Bukit Asam for initial work area covering 93,164 hectares. This agreement was
amended in 1997, with the transfer of all rights and obligations of PT Tambang Batubara Bukit Asam. Through the
release of land rights, the area of BIB has been reduced to become 24,100 hectares.
The following map shows the layout of the PKP2B project site of BIB:
Stripping ratio of BIB in the period ended June 30, 2011 ranged from 1:3 up to 1:4 and for the years 2009 and 2010
respectively of 1:3 up to 1:4 and 1:5.07 up to 1:5.72. Like most coal mines in Indonesia, BIB relies on the use of
mining contractors services to perform all of the mining activities, starting from the land opening, removal of topsoil
and OB, coal mining, coal transportation and dewatering. The contractors use conventional small-scale mining equipments
such as excavators and trucks. Mining operations of BIB are performed by mining contractors
which operate under instructions of the Company. The operation in Sebamban was first started in the Andaru pit at the end of
2006. Since the work area is near the sea, BIB has a mine location
which is near to port facilities. Batulaki block is located 13 km from coal processingcrushing and barge loading facilities
in Abidin Port. Menwhile, Sebamban block is located at a distance of 7 km from coal processingcrushing and barge
loading facilities in Bunati Port. Work area of Kusan Block and Girimulya Block are located at a
distance of approximately 27 km and 44 km from coal processingcrushing and barge loading facilities in Bunati
Port.
KIM The mining activities of KIM and its subsidiaries are
conducted by obtaining Mining Permits which validity periods vary between 6 to 20 years.
The mining locations of KIM and its subsidiaries are shown in the following map:
West KIM has a stripping ratio of 1:5,6. East Kim has a stripping ratio of 1:6.9.
Similar to BIB, the mining operations of KIM rely on the use of mining contractors services. All of the mining activities,
starting from the land opening, removal of topsoil and OB, coal mining, coal transportation and dewatering are conducted
by the contractors. The contractors use conventional small- scale mining equipments such as excavators and trucks.
Currently most of the coal from the mining location of KIM are sold to China and India besides to the related parties of to
the Company. Coal sales to the related parties are performed in normal commercial arm’s length basis.
The work area of KIM is located at an approximate distance of 260 km from Teluk Bayur Port, Padang and 260 km from Telang
Dukuh Port, Jambi.
TKS
The mining activities of TKS in Muara Teweh is performed by obtaining IUP-Operation No. 188.452072010 dated April 26,
2010, and IUP-Operation No. 188.452082010 on 26 April 2010. These mining permits are valid for periods of 16 to 18 years.
The mining location of TKS is shown in the following map:
GEMS plans to transport the coal from the mining location of TKS through the coal hauling road in approximately 70 km long
to the Barito River, to the area of piling, crushing and barge loading facilities. From this location the coal will be
transported through the river to the transshipment point to be loaded into larger capacity coal freighter in estuary of
Barito River in Banjarmasin Port.