The Company has coal assets with quality that can be
accepted by the market. The Companys coal quality have average caloric value range between 5,200 kcalkg adb to
6,100 kcalkg adb. The development of power plant industries that led to the demand for coal in medium and
low calorie qualities, giving the potential for the Company’s coal assets to increase its market share either
domestic or abroad.
The Company is a coal producer with the ability to produce coal
in a
relatively lower
cost. Relatively
lower stripping ratio and the proximity of the mines location to
the port facilities, has made operation cost in the mining concessions of the Company is competitive.
The Company has a large amount of coal resources and
reserves, i.e.
1.93 billion
tons of
thermal coal
resources, with
coal reserves
approximately for
849 million
tons. This
substantial coal
reserves could
potentially provide a positive prospect for the operation performance and financial growth in the future for a
considerable length period. The Company plans to increase coal production capacity from 2.0 million tons in 2010 to
6 million tons in 2011.
The Company is managed and operated by a management team experienced in the coal mining business. Majority of the
senior management has experience in the mining field.
5. PKP2B AND IUP AREAS
The following map shows the location of PKP2B and IUP areas of the Company:
PKP2B areas of BIB The PKP2B concession area of BIB covers an area of
approximately 24,100 hectares. This concession is located in South Kalimantan province; about 200 km east of Provincial
Capital Banjarmasin, in the administration of local government of Tanah Bumbu Regency. The potential coal areas of BIB of
consist of four separate coal blocks: Batulaki Block in the southwest, Girimulya and Kusan Blocks in the north and
Sebamban Block in the southeast. Based on PKP2B, the Company might conduct exploration and
exploitation of coal resources for a period of 30 years from the commencement of the production phase in 2006 until the
year 2036. PKP2B may be extended before expiration date through
agreement between
the PKP2B
holders and
the Government. Meanwhile, the Ministry of Energy and Mineral
Resources can terminate the PKP2B if the PKP2B holders fail to fulfill the requirements as stipulated in the PKP2B.
Mining operations are currently located in Batulaki and Sebamban Blocks. Coal mining operations in the future will be
made in Kusan and Girimulya Blocks. The table below shows the estimation summary of proven and
probable coal reserves within PKP2B concession area of BIB and production data of 2009, 2010 and the six-month period of
2011.
Block M ineable Reserve in million Tons
Product ion in Tons Proven
Pr obable Tot al
2009 2010
Six-mont h period of
2011 Bat ulaki
NA NA
NA 915,660
801,141 521,309
Sebam ban NA
NA NA
267,010 316,905
654,323 Kusan
239.0 97.0
336.0 -
- 485
Girimulya 176.0
234.0 410.0
- -
- Jumlah
415.0 331.0
746.0 1,182,669
1,118,046 1,167,117
Sour ce: The am ounts of m ineable r es er ves ar e fr om Independent Tec hnic al Repor t of SMGC on Mar ch 2 011.
The amount of proven and probable coal reserves are calculated using JORC standard methodology.
