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INDONESIAN COAL Adaro Plays a Major Role in Indonesian Growth By John Miller, Australian Editor Mining at Adaro Energy's massive coal operations in South Kalimantan. In less than 10 years since its establishment and less than five years since completing its initial public offering (IPO), PT Adaro Energy Tbk has become one of Indonesia's most successful companies and one of the world's leading coal industry players. It continues to develop infrastructure and improve its position in the coal industry, and has further integrated its coal supply chain by moving downstream into power as well as diversifying product offerings and increasing its reserve base through acquisition of deposits in Indonesia. Adaro Energy was established in 2004 under the name of PT Padang Karunia and has become the second largest thermal coal producer in Indonesia. Through its subsidiaries, the vertically integrated, pit-to-power company has a JORC-compliant coal resource and reserve of 4.6 billion metric tons (mt) and 1.1 billion mt, respectively. Its vision is to be a leading Indonesian mining and energy group while continuing to focus on creating maximum sustainable value from Indonesian coal. On July 16, 2008, Adaro conducted an IPO and listed on the Indonesia Stock Exchange. It issued 11.14 billion new shares, which was equal to 34.83% of its issued and fully paid capital. With the IPO price of Rp1,100 ($0.11) per share, Adaro raised Rp12.25 trillion ($1.23 billion) from the public in an IPO consid90 E&MJ; • AUGUST 2013 ered the largest in the history of the Indonesian capital market. Adaro Energy aims to achieve organic growth from the current reserve base, improving the efficiency of its coal supply chain, products and locations, and through deepening integration, while it achieves inorganic growth through acquisitions of other deposits. Major recent project developments include: • Overburden Out of Pit Crushing and Conveying System (OPCC)—The project was 96% complete at the end of December 2012 and Adaro estimated the system would be commissioned during May. • 2x30 mw Mine-mouth Power Plant—The plant was 95% complete at the end of December 2012 and Adaro estimated commissioning of the first unit to start in January and the second unit by April. • Capacity expansion at the Kelanis River Terminal. Kalimantan Operations Adaro Energy's primary focus is on the Adaro project in South Kalimantan through subsidiary PT Adaro Indonesia. The deposits are in three main areas— Tutupan, Wara and Paringin. Tutupan stretches for 20 km along a ridge in the northeast part of the Adaro area. No major faults are known to disrupt the coal. The Wara 1 coal deposit is 5 km west of Tutupan Central and is separated from that deposit by the Dahai thrust. The deposit stretches in a northeast direction over 12 km and dips to the southeast at 45˚. Wara 1 comprises three major seams that are characteristically low in ash (less than 3%) but with moisture content of around 40%. The North Paringin deposit is southeast of Tutupan and around 1 km north of the old Paringin pit. The deposit forms an asymmetrical anticline of 4 km strike length with the eastern limb dipping at 30˚ and the western limb at 60˚. It is also a multi-seam deposit consisting of more than 40 seams ranging in thickness from less than 5 m to greater than 20 m. The quality of North Paringin is similar to Tutupan with ash around 3% and calorific value of around 4,800 kcal. The Paringin deposit extends south of the Balangan River. Since it began production in 1991, Adaro has used open-pit mining methods to produce coal with primary waste stripping by hydraulic excavators and dump trucks. Under the Coal Contracts of Work (CCoW), the mine's life is due to expire in 2022 with an option of two extensions of 10 years. South Sumatra Developments Adaro Energy's investments in PT Mustika Indah Permai (MIP), PT Bukit Enim Energi (BEE) and PT Servo Meda Sejahtera (SMS) are part of its strategy in South Sumatra to replicate the proven www.e-mj.com