Capital expenditures Adaro Energy 2009 Annual Report English

Adaro Energy Annual Report 2009 197 www.adaro.com PT ADARO ENERGY Tbk AND SUBSIDIARIES Schedule 559 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009 AND 2008 Expressed in million Rupiah, unless otherwise stated

39. SIGNIFICANT AGREEMENTS, COMMITMENTS AND CONTINGENCIES continued n.

Letter of Credit Facility On 8 April 2009, Coaltrade entered into a Letter of Credit Facility agreement with DBS Bank Ltd. Under this agreement, DBS Bank Ltd agreed to provide a letter of credit facility in an aggregate amount of US65 million for a period of 12 months after the date of the agreement. As at 31 December 2009, Coaltrade has not made any drawdown on this facility.

o. Amortising Revolving Credit Facility

On 2 October 2009, Adaro entered into an Amortising Revolving Credit Facility with a syndicate of banks consisting of Oversea-Chinese Banking Corporation Ltd, DBS Bank Ltd, Sumitomo Mitsui Banking Corporation Singapore branch, BNP Paribas Singapore branch, The Bank of Tokyo-Mitsubishi UFJ Ltd Singapore branch, United Overseas Bank Ltd Labuan branch, Chinatrust Commercial Bank Co Ltd Singapore branch, PT ANZ Panin Bank, PT Bank Mandiri Persero Tbk Singapore branch, Standard Chartered Bank Jakarta branch and The Hongkong and Shanghai Banking Corporation Ltd, in aggregate amount of US500 million for capital expenditure purposes. The availability of the loan will be stepped down as set forth in the table below: Amortising period Maximum available amount The date falling 12 months after the date of this agreement US 460,000,000 The date falling 24 months after the date of this agreement US 420,000,000 The date falling 36 months after the date of this agreement US 380,000,000 The date falling 48 months after the date of this agreement US 230,000,000 Final maturity date US This facility will be charged with interest rates at LIBOR plus a certain percentage and has a maturity date on the date falling five years after the date of this loan agreement. The Company act as the guarantor for this loan facility. On 21 October 2009, Adaro made a US160 million drawdown from this facility and had made a full repayment of this drawdown on 23 November 2009. As at 31 December 2009, there is no amount outstanding under this facility. The interest rate changed during 2009 was 3.5 - 3.7.

p. Overland Conveyor Construction Contract

On 29 December 2009, JPI, Sandvik Asia Ltd and PT Tripatra Engineers and Constructors, entered into contracts for the construction of Overland Conveyor, in purpose to support Adaro’s increasing of coal production capacity with the total contract amounts including provisional sum of approximately US237 million. The construction is planned to be completed within two years from the date of the commencement of the project. Until to 31 December 2009, there is no spending related to this contract.

q. Fuel Facilities Agreement

On 1 September 2009, IBT entered into a Fuel Facilities Agreement with Shell. Based on the agreement, Shell agreed to build a fuel storage facility with a minimum capacity of 60,000 tons of diesel over the land of IBT and IBT agreed to build shared facilities within the terminal for unloading and loading of the diesel. For the use of the shared facilities, Shell agreed to pay a handling fee with a certain amount per barrel of the loaded quantities of diesel. The agreement will expire on 31 December 2022. At the end of the agreement period, Shell will transfer the ownership of the fuel storage facility to IBT.

r. New mining law No. 42009

On 16 December 2008, the Indonesian Parliament passed a new Law on Mineral and Coal Mining the “Law ”, which received the assent of the President on 12 January 2009, becoming Law No. 42009. The CCA system under which Adaro, one of the Group’s subsidiaries, operates, will no longer be available to investors. While the Law indicates that existing CCAs, such as those held by Adaro, will be honoured. There are a number of issues which existing CCA holders, including Adaro, are currently analysing. Among others these include: - the Law notes that existing CCAs will be honoured until their expiration. However, it also states that existing CCAs must be amended within one year to conform to the provisions of the Law other than terms relating to State revenue - which is not defined, but presumably includes royalties and taxes; and - the requirement for CCA holders which have already commenced some form of activity to, within one year of enactment of the Law, submit a mining activity plan for the entire contract area. If this plan is not fulfilled, the contract area may be reduced to that allowed for licences under the Law.