EXPLORATION ACTIVITIES BUSINESS ACTIVITIES AND PROSPECTS OF THE COMPANY AND SUBSIDIARIES

Block Number of open holes Num ber of coring holes Tot al Bat ulaki 238 55 293 Sebam ban 170 39 209 Kusan 501 154 655 Girimulya 154 23 177 Source: The Company For the mining areas of KIM, the exploration drilling was conducted since 2007 with 198 total drill holes. Intensive drilling was completed in October 2010 to 304 holes with depths ranging from 50 meters to 200. The drilling statistical data is summarized in the following table: Block Num ber of open holes Num ber of coring holes Tot al KIM East 128 70 198 KIM West 73 33 106 Source: The Company For the mining areas of TKS, the exploration drilling was conducted since 2005 with 335 drill holes and total depth of 20,287 meter. Drill point plan, geological models, mining location plan of subsidiaries were verified by the mining consultants to ensure the location of the drill point and optimal the mine planning.

9. LAND COMPENSATION AND CULTIVATED PLANTS

As part of the production activities, mine planning division of the Company to identify the land needed for a variety of use and provide panning reports to the department of land compensation. After confirming, the department of land compensation prepares an inventory of land ownership and verification through the local government to resolve overlapping land claims, if any. After the actual ownership has been confirmed, the department of land compensation will prepare a detailed map by using survey equipments and GPS measurements. Based on the map and measurements, the related Company negotiates with the concerned landowners of the required area width and provides adequate compensation. Compensation for PKP2B area use with respect to the production plan in 2011 has been completed by respective related companies.

10. MINING OPERATION ACTIVITIES

The following is the mining process and production of coal performed by the subsidiaries: a. Mining Process and Production of Coal The stages of mining activities by means of open pit consist of: 1. Land clearing, Stripping and Removing the Topsoil Mine clearing operations are conducted at locations where mines will be opened or open pit. In connection with this operation, there are a number of works to be done which are: