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 Thursday. (ed)

BUSINESS DEVELOPMENT

2X100 MW Power Plant in South Kalimantan
In March 2012, Adaro Energy received a Letter of Intent (LOI) to construct a coal-fired Independent Power Producer (IPP) project with a total capacity of 200 MW in South Kalimantan. In this project, Adaro Power has 65% stake and Korea East West Power, a subsidiary of KEPCO, owns the remaining 35%. We continue to develop partnership with global blue-chip companies as part of our strategy to create maximum sustainable value from Indonesian coal.

Mustika Indah Permai Completed JORC Compliant Resources and Reserves
On March 22nd, 2012, we announced the Australasian Joint Ore Reserves Committee (JORC) Compliant Coal Resources and Reserves estimates for our subsidiary, PT Mustika Indah Permai (MIP) located in Lahat Regency, South Sumatra. As of December 15th, 2011, the total JORC Compliant Coal Resources for MIP were estimated at 286.4 million tonnes (Mt), of which 272.6 Mt were the estimated JORC Compliant Coal Reserves. The JORC Coal Resource and Reserve Report was prepared by Marston, a Golder Associates company and international mining consultant located in Saint Louis, Missouri, USA.

The JORC study identified elevated sodium in ash content in some seams usually increasing with depth. Marson believes the presence of multiple thick seams with varying levels of sodium in ash contents, the ability to blend product coal from different seams and the overall average level of sodium in ash for the Coal Reserves at 3% will result in a marketable coal product.

We plan to produce coal at MIP by the end of 2012. Coal production will be ramped up to three to four million tonnes per year by 2014 and up to ten million tonnes per year five years from the time operations commence. MIP, along with two other investments we made in South Sumatra, will form the backbone of our strategy to create long term value in South Sumatra and itself is part of the broader strategy of Adaro Energy for diversification into multiple locations and products. (end of excerpt)