Adaro Energy update: Business Development

The following is an edited excerpt from IDX-listed energy firm PT.Adaro Energy 's quarterly report released on Tuesday. (ed)

Balangan Coal
We continued with construction of the haul road and bridge as well as drilling to define the coal reserves. We conducted first coal hauling in March 2014 with preparation for a first trial shipment in 2Q14. Balangan?s coal has received interest from a range of customers, including from Thailand and Indonesia.

Mustika Indah Permai (MIP)
In 1Q14, we completed an updated resources and reserve report in accordance with JORC, showing total estimated resources of 287.5Mt and reserves of 254.0Mt of 4,292 kcal/kg (GAR) coal. The MIP coal resources increased marginally as a result of minor model changes. Marston also re?estimated MIP coal reserves according to JORC. The result was a marginal fall in reserves due to the revision of the river diversion channels costs and updated pricing assumptions based on Wood Mackenzie?s latest forecasts.

Bhakti Energi Persada (BEP)
On May 28, 2012, PT Alam Tri Abadi (ATA), a subsidiary of Adaro, entered into Convertible Loan and Share Subscription Agreement with the option to provide a loan to BEP for up to US$500 million which is convertible into up to 51% of equity in BEP (Option One), and option agreement which we are granted to acquire BEP shares from its controlling shareholders by offering newly issued shares of Adaro (Option Two). In November 2013, we amended the period for these two options from three years to four years and therefore extend the options period from at the latest 2015 to 2016. We are exploring various development options for BEP?s coal including coal beneficiation and are confident of the outlook for BEP. During the quarter, we continued to prepare mine readiness at BEP. ATA has the right to exercise either one of the options mentioned above. (end of edited excerpt)