Adaro Energy update: Business Development

The following is an excerpt from IDX-listed energy firm PT. Adaro Energy 's quarter report on Business Development released on Friday. (ed)

BUSINESS DEVELOPMENT

Focused on Mining Readiness for Recent Acquisitions
As part of our strategy to diversify and increase our reserves, we selectively invested nearly US$750 million over the past three years to acquire greenfield coal concessions in coal rich areas in Indonesia. As these investments become operational, such as the new Balangan deposit, we expect our returns to increase.

We continued to focus on mining readiness for our greenfield coal concessions in South Sumatra (MIP, BEE) and East Kalimantan (BEP). Mining readiness includes obtaining required permits, acquiring land, securing social and community support, and completing engineering and geological studies. We are not investing any significant capex in 2013 for the development of our recently acquired concessions.

Balangan Coal Project
During the quarter we completed the Balangan LIDAR (Laser Imaging, Detection and Ranging) survey and a final report was received and distributed. The LIDAR results, in addition to providing accurate survey information, provided geological details of the Balangan area. We also commenced geotechnical drilling for mine design purposes.

We carried on with haul road construction and completed clearance, earth works and initial surfacing. We continued drilling in order to define coal reserves at Balangan, and we expect to complete a JORC reserves report at the end of 2013 with first production by the end of 1Q14. (end of excerpt)