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Prospects

As our mining operations and coal sale activities are located in Indonesia, our growth prospects are linked to the developments in the Indonesian coal market. Accordingly, given the continuing growth trend in the Indonesian coal market, we believe our Company will be able to ride on this trend and continue to enjoy growth in the coming years.

According to the Indonesian Coal Mining Association, annual Indonesian coal production is expected to reach 560 million tonnes by 2025 from 325 million tonnes in 2010(1). Indonesia’s two main export markets are China and India which accounted for approximately 137 million tonnes and 90 million tonnes of Indonesia’s coal exports respectively in 2011(2).

Despite concerns about the global slowdown, global coal demand is expected to remain strong, primarily from China, in the medium to long term. This can be seen from coal imports by China being reported at 24.27 million tonnes in July 2012, a 14.2% increase from a year ago in July 2011. Furthermore, China imported a total of 164.12 million tonnes of coal from January to July of 2012, a 55% increase year on year(3).

Domestic coal demand is expected to grow. Estimates by the Indonesian Coal Mining Association reflect that domestic coal sales in Indonesia are expected to grow from 60 million tonnes in 2010 to 300 million tonnes in 2025(1).

The confi dence in the Indonesian coal market is underpinned by Indonesia’s position as the largest coal exporter in the world in 2011(4) and Indonesia’s key export markets, China and India, expecting to account for 67% and 33% of global coal growth to 2030(5).

Such growth drivers augur well for our Group which has the necessary experience and capabilities to tap on these growth opportunities.

Notes : -

  1. Source: Indonesia Coal Mining Outlook, presented by Bob Kamandanu, Chairman of Indonesian Coal Mining Association at IEA Workshop, Beijing, 14 April 2011

  2. Source: Coal Asia (Dec 2011 – Jan 2012 Issue): “Exciting Coal Outlook for 2012”

  3. Source: General Administration of Customs of the People’s Republic of China’s website www.customs.gov.cn on 12 August 2012

  4. Source: Coal Facts 2012 issued by the World Coal Association and dated August 2012

  5. Source: “Energy Outlook 2030” booklet issued by BP, dated January 2012 which was made available to the public

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