BUSINESS PROSPECTS BUSINESS ACTIVITIES AND PROSPECTS OF THE COMPANY AND SUBSIDIARIES
The power generation industries in India and China have started to use coal with capability to burn coal in calorie
quality less than 5,000 kcalkg. The development of power plant industries that led to the demand for coal in medium and
low calories quality, giving the potential for the coal assets owned by the Company which mostly have an average calorific
value range between 5,200 kcalkg adb to 6,100 kcalkg adb to be produced in the long term to meet the Asian markets
supply. In general, Indonesia has an additional advantage due to its
strategic location, near to Asian customers. This strategic advantage leads to cheaper shipping cost compared with other
coal producers from Australia and South Africa. In terms of price, the coal prices are divided into several
categories that include bituminous, eco coal, low rank and super low rank. It is estimated that from year 2012 ahead, the
price of bituminous type of coal from Indonesia is USD80ton, USD49ton for eco coal, USD44ton for low rank type, and
USD41ton for super low rank type. Though it is predicted a decline in the coal prices from 2009 to 2012, but in the long
run, the coal prices are expected to be stable.