Engineering & Mining Journal

AUG 2013

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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INDONESIAN COAL • • • • • • • • • terest of the company and long-term value creation. Low cost producer—The location and characteristics of the major deposit, as well as the operating strategy and execution, create the capacity to produce coal at a low-cost level. Large operation—Adaro Energy and its subsidiaries are the second largest coal producer in Indonesia, own and operate the largest coal mine in Indonesia, and have the largest single location openpit mine in the southern hemisphere and the fourth largest in the world. Unique coal—Adaro Energy's environmentally friendly coal is trademarked around the world as Envirocoal. Growing concern for the environment, as well as understanding Envirocoal's other benefits, such as lower operating costs, will ensure demand for Envirocoal remains firm. Highly skilled work force with many years of experience—A large and varied work force and management, made up of people with decades of experience from Indonesia and around the world. Many consider Adaro responsible for establishing the international market for subbituminous environmental coal. Diversified loyal blue chip customer base—Adaro and its subsidiaries sell Envirocoal to a geographically diverse customer base of 41 companies in 17 different countries. Most have been customers for years and substantially all are power companies. Not restricted by infrastructure— Adaro's existing infrastructure gives the company the capacity to increase production rapidly with minimal capital expenditure and to quickly adjust production volume based on market demand and conditions. A collection of integrated profit centers—Adaro Energy's forward thinking plan enables each subsidiary, while fully integrated into the Adaro coal supply chain, to become an independent profit center. Profit from subsidiaries assists the group's overall income growth. Each subsidiary may become publicly listed. Experienced subsidiaries—Adaro Energy's strategic business units are experienced in the sectors of mining, trading, mining contractor service, and infrastructure and logistics. High quality assets—As well as the 3.5 billion mt of coal reserves and re- www.e-mj.com sources, Adaro has a complete production fleet in the form of equipment and facilities for crushing, stockpiling, transportation, loading, production and other supporting roles. Consistent Growth There are several factors that have contributed to Adaro Energy's consistent growth: • Demand for its coal is increasing every year. • Coal mining contractors perform well in terms of meeting annual targets. • The company has sufficient equipment and CAPEX to support production growth need. • Adaro has good mine planning. However, in the current difficult market conditions, Adaro has recognized the AUGUST 2013 • E&MJ; 93

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