PRESENTED BY DIDDY RUSDIANSYAH A.D (HEAD OF REGIONAL INVESTMENT AND PERMITTANCE BOARD OF EAST ) COAL MINING POTENCIES IN BRIEF PROFILE OF EAST KALIMANTAN

Total area of Kalimantan Timur is 125.336,81 km square (or 12,726,752 hectares), consists of : - 3 (three) Cities : 1. 2. 3. - 7 (seven) Regencies : 4. Kartanegara 5. Kutai Timur 6. Kutai Barat 7. Berau 8. Paser Utara 9. Paser 10. Mahakam Hullu

Its population up to 2014 is 3,508 million inhabitants, with the result that the average population density is 26,14 inhabitants/km square REGIONAL GEOLOGY ......

From geological point of view, East Kalimantan is located in three major tertiary sedimentary basins which have major impact on the process of mineral resources formation in the region. The three basins are :  Kutai Basin which covers the area of Mahakam Hilir and Mahakam Hulu.  Pasir Basin which covers the area of Paser.  Basin which covers the area of Tarakan, Berau, and Bulungan. COAL BEARING FORMATION

Coal Bearing Formations in Kalimantan Timur are :  Balikpapan Formation  Pulaubalang Formation  Pamaluan Formation  Kuaro Formation  Wahau Formation  Batuayau Formation  Tanjung Formation  Warukin Formation  Telakai Formation  Birang Formation  Latih Formation COAL RESOURCES AND RESERVES IN EAST KALIMANTAN IN 2012 – 2014

Coal Calorie 5000 up to 7000 Ccl and Sulphur 0,8 up to 1,5

Description 2012 2013 2014

Resources 31.817.269.817 32.258.774.367 30.651.444.628 (MT)

Reserves 9.244.407.452 9.525.868.005 8.826.730.632 (MT)

Note : Coal Resources and Reserves for 2014 only in the area of East Kalimantan, excluding the area of COAL RESOURCES AND RESERVES IN EAST KALIMANTAN IN 2015

RESOURCES RESERVES NO /CITY INFERRED INDEXED MEASURED TOTAL ESTIMATED PROVEN TOTAL

1 SAMARINDA 331.185.099 267.828.597 154.989.788 754.003.484 48.249.074 140.678.674 188.927.748

KUTAI 2 1.918.871.428 1.751.424.000 2.889.348.946 6.559.644.374 247.657.332 1.406.672.887 1.654.330.219 KARTANEGARA PANAJAM 3 0 9.067.682 1.007.520 10.075.202 0 7.922.311 7.922.311 PASER UTARA

4 PASER 363.472.020 646.338.610 248.257.078 1.258.067.708 182.775.400 576.787.640 759.563.040

5 KUTAI BARAT 826.226.133 640.781.169 931.010.716 2.398.018.018 65.238.769 256.697.062 321.935.831

6 KUTAI TIMUR 6.849.597.912 6.581.469.841 6.999.080.897 20.430.148.650 3.419.535.659 1.758.560.278 5.178.095.937

7 BERAU 738.005.610 1.093.377.488 563.205.213 2.394.588.311 356.593.000 246.014.331 602.607.331

TOTAL 11.027.358.202 10.990.287.387 11.786.900.158 33.804.545.747 4.320.049.234 4.393.333.183 8.713.382.417 COAL MINING MANAGEMENT POLICIES IN EAST KALIMANTAN THE IMPLICATION OF THE ENACTMENT OF THE LAW NO. 23 OF 2014 ON LOCAL GOVERNMENT (UNDANG-UNDANG N0. 23 TAHUN 2014 TENTANG PEMERINTAHAN DAERAH)

Government affairs Central Government Authorities implementation on 1. Mining Permit (Izin Usaha Pertambangan/ mineral and coal mining IUP) Issuance for metallic minerals, non sector is divided metallic minerals, coal, and rock in : between the central  Mining Permit Areas (Wilayah Izin Usaha Pertambangan (WIUP)) which are government and the located within the area of inter-province provincial government  Mining Permit Areas which directly borders with other countries This means the  Mining Permit Areas which are located in the sea area of more than 12 miles implementation is no 2. The issuance of the Mining Permit in the longer under the Foreign Direct Investment authority of the 3. The issuance of a Special Permit of Mineral city/regency (since and Coal Mining October 2, 2014) Cont ..... PROVINCIAL GOVERNMENT AUTHORITIES 1. Mining Permit Issuance for metallic minerals, non metallic minerals, coal, and rock for domestic investment in :  Mining Permit Areas in areas located within the province  Mining Permit Areas in the sea area less than 12 miles 2. Community Mining Permit Issuance for metallic minerals, non metallic minerals, coal, and rock commodities within the community mining area THE FOLLOW UP OF THE IMPLEMENTATION OF THE LAW NO. 23 OF 2014 ...... 1. Governer is authorized to revoke the non CnC Mining Permit which doesn’t meet the obligations (for technical reference : Minister of Energy & Mineral Resources Regulation No. 43 of 2015 on Procedures for Mineral & Coal Mining Permit Issuance Evaluation (Peraturan Menteri Energi & Sumberdaya Mineral No. 43 Tahun 2015 tentang Tata Cara Evaluasi Penerbitan IUP Mineral & Batu Bara)) 2. Regent/Mayor submits the Mining Permit and the supporting documents to the Governor 3. Regent/Mayor/Governor submits the Foreign Investment Mining Permit and the supporting documents to the Central Government 4. Provincial Governments establish One Stop Services (OSS (Pelayanan Terpadu Satu Pintu (PTSP)) and umbrella permittance law 5. Governor may establish Technical Service Unit (Unit Pelayanan Teknis) in the Regency/City for the implementation of the guidance and supervision, including increase the Information & Technology functional staff as well as strengthen the mining database 6. Completion of administrative boundaries between the Regencies/Cities COAL MINING MANAGEMENT Applied based on national regulations, to be specific :  Law No. 4 of 2009 on Mineral and Coal (Undang-Undang No. 4 Tahun 2009 tentang Pertambangan Mineral & Batu Bara)  Government Regulation No. 77 of 2014 on 3rd Amendment to Government Regulation No. 23 of 2010 on the Implementation of Mineral & Coal Mining Operations (Peraturan Pemerintah No. 77 Tahun 2014 tentang Perubahan Ke-3 Atas Peraturan Pemerintah No. 23 Tahun 2010 tentang Pelaksanaan Kegiatan Usaha Pertambangan Mineral & Batu Bara)  Minister of Energy and Mineral Resources Regulation No. 32 of 2013 on Procedures for Granting Special Permits on Mineral & Coal Mining (Peraturan Menteri Energi & Sumberdaya Mineral No. 32 Tahun 2013 tentang Tata Cara Pemberian Izin Khusus Dibidang Pertambangan Mineral & Batu Bara)

At provincial level (East Kalimantan) applied the East Kalimantan Governer Regulation No. 17 of 2015 on Management of Permittance and Non Permittance Granting and Improvement of Permittance Management on Mining, Forestry & Palm Oil Plantation in East Kalimantan (Peraturan Gubernur Kalimatan Timur No. 17 Tahun 2015 tentang Penataan Pemberian Izin dan Non Perizinan serta Penyempurnaan Tata Kelola Perizinan Di Sektor Pertambangan, Kehutanan & Perkebunan Kelapa Sawit Di Provinsi Kalimantan Timur) Governer Regulation No. 17 of 2015 (Peraturan Gubernur No. 17/2015) 1. Create resource management policy harmonization between the Central and Provincial Government

Accommodate 2. Evaluate policies which have been sectoral rules issued against the benefit and impact of natural resource management

Accommodate 3. Provide protection against social, economic environmental pollution and damage, and particularly forest and its ecosystem environmental aspects 4. Encourage entrepreneurs/investors and other stakeholders’s compliance on the obligations THE SCOPE OF PERMITTANCE AND NON PERMITTANCE MANAGEMENT (Article 5, Paragraph (2)) MINING FORESTRY  Permittance Issuance  Borrow and Use of Forest Areas Permit Recommendation (Mining Permit/ Izin Usaha (Rekomendasi Izin Pinjam Pakai Pertambangan (IUP)) – Kawasan Hutan (IPPKH)) Exploration (IUP Exp) and  Timber Forest – Natural Operation (IUP OP) Forest/Limited Forest Product Utilization Permit (Izin Usaha  IUP Exp & IUP OP Issuance Pemanfaatan Hasil Hutan Kayu - by Regency/City Hutan Alam/ Hutan Terbatas (IUPHHK-HA/HT))  Forest Area Exchange Recommendation MANAGEMENT OF PERMITTANCE AND NON PERMITTANCE GRANTING AND IMPROVEMENT OF PERMITTANCE MANAGEMENT ON COAL MINING SECTOR (Article 6) 1. Postponement and management of permittance granting are applied for the new permittance (valid in 2 years since the issuance of the Governor Regulation - Article 10) 2. Penundaan dimaksud dikecualikan untuk :  Permittance for exploration activities which are already underway  Enhancement of Exploration Mining Permit into Production Operation Mining Permit in the area of Other Use Areas (Areal Penggunaan Lainnya (APL)) and production forest area  Extension of Production Operation Mining Permit Cont ..... 3. Enhancement and extension of the permittance and non permittance as explained in the explanation number 2 above can be granted as long as the requirements are fulfilled, to be spesific :  Committed to fulfil the Domestic Market Obligation, especially in the scope of East Kalimantan  Committed to provide supplies or build power plants  Committed to support the food security program (reclamation for crops and cattle)  Should not overlap with similar commodities permittances  Headquartered (at least has a branch office) and has an enterprises Taxpayer Identification Number (TIN/Nomor Pokok Wajib Pajak (NPWP)) in the area of East Kalimantan  Pay attention to the carrying capacity of the environment and local communities  Should not export raw material  Build downstream industries 4. The commitment is part of the Minutes after the presentation of the permit applicant before the Governer (or authorized officials), and set forth in a Statement The issuance of new permittance and permittance extension of NON METALLIC MINERAL AND ROCK (Article 6 Paragraph 6 Governor Regulation No. 17 of 2015 (Pasal 6 Ayat 6 Peraturan Gubernur No. 17 Tahun 2015)) The implementation can be referred to the GOVERNER OF EAST KALIMANTAN REGULATION NO. 4 OF 2015 ON GUIDANCE OF NON METALLIC MINERAL AND ROCK MINING PERMIT IMPLEMENTATION (PERATURAN GUBERNUR KALIMANTAN TIMUR NO. 4 TAHUN 2015 TENTANG PEDOMAN PELAKSANAAN IZIN USAHA PERTAMBANGAN MINERAL BUKAN LOGAM & BATUAN DI PROVINSI KALTIM) PROCEDURES OF COAL MINING PERMITTANCE IN EAST KALIMANTAN PROVINCE PERMITTANCE PROCEDURES ....

Its implementation is based on With reference to Presidential the Governor of East Decree No. 97 of 2014 on One Kalimantan Regulation No. 48 Stop Services (OSS) of 2015 on the Implementation of One Stop Services (OSS) INVESTMENT PRINCIPLE PERMIT

Head of Investment Coordinating  Principle permit serves as a Board Regulation No. 14 of 2015 reference to the issuance of on Guidances and Procedures for investment implementation Investment (Peraturan Kepala permittance and non Badan Koordinasi Penanaman permittance under the authority Modal No. 14 Tahun 2015 tentang of the Central and Provincial Pedoman & Tata Cara Government (Article 10 Penanaman Modal) - first step to paragraph (3) and (4)) conduct business (Article 9)  Principle Permit for Foreign published by BKPM/BPMPTSP or Investment is only granted to PTSP KPBPB & PTSP KEK (the business entities in the form of authority of permit granting is a Limited Liability Company stipulated in Article 5, 6, 7 & 8) (LLC/Perseroan Terbatas (PT)), with the investment value more than Rp 10 billion and the capital is paid at least Rp 2.5 billion (Article 13) Investment implementation Permittance & Non Permittance (Article 10, paragraph (4)), among others include : 1. Land Technical Considerations 2. Location Permit 3. Building Permit 4. Ratification of the Use of Foreign Workers Plan (Rencana Penggunaan Tenaga Kerja Asing (RPTKA)) 5. Environmental Permit 6. Facility Decree 7. Technical Recommendation 8. Operation Worthy Certificate; or 9. Operational Permit PROCEDURES OF COAL MINING PERMITTANCE & NON PERMITTANCE ... Brief

Filing an Application to Investment and One Permit Stop Services (OSS) Issuance Board (BPMPTSP)

1 Documents Incomplete Rejected Approved Verification

Disapproved Complete Not Recommended

Processed (Submitted to 3 Department of Mines and 2 Team Meeting Energy of East Kalimantan Technical Recommended (Presentation) (Dinas Pertambangan dan Considerations Energi Provinsi Kalimantan Timur)) REQUIREMENTS FOR EXPLORATION MINING PERMIT

ADMINISTRATIVE TECHNICAL  Application Letter  Resume & Mining Expert  Structure of Directors & List of Statement Share Proxy Holders  Maps of Mining Permit Area  Certificate of Domicile which is equipped with coordinates  Letter of Assignment/Power of Attorney (Original)  Copies of Exploration Mining Permit from beginning to end (legalized)  Copies of Exploration Mining Permit CnC  Taxpayer Identification Number (TIN) Cont .... REQUIREMENTS FOR EXPLORATION MINING PERMIT

ENVIRONTMENTAL FINANCIAL

Statement of Capability to  Proof of sooth guarantees comply with the environmental placement management regulations  Proof of payment of the compensation value price of Mining Permit Area auction result information data or proof of area reserves cost REQUIREMENTS FOR PRODUCTION OPERATION MINING PERMIT

ADMINISTRATIVE TECHNICAL  Application Letter  Map of Mining Permit Area which  Structure of Directors & List is equipped with coordinates of Share Proxy Holders  Full Report of Exploration  Certificate of Domicile  Report of Feasibility Study  Letter of Assignment/Power  Plan of Exploration Reclamation of Attorney (Original) & Guarantee Placement  Copies of Production Operation  Work Plan & Budget Mining Permit from beginning  Plan of Production Operation to end (legalized) Supporting Infrastructure  Copies of Production Operation Development Mining Permit CnC  Availability of Mining Experts  Taxpayer Identification Number (with 3 years minimum (TIN) experience) Cont .... REQUIREMENTS FOR PRODUCTION OPERATION MINING PERMIT

ENVIRONTMENTAL FINANSIAL

. Statement of Capability to comply  Audited-last year Financial with the environmental Statements management regulations  Proof of the last 3 years Fixed . Approval Letter of Environmental Dues Payment Document/ Environmental Permit  Proof of investment substitute (EIA/ UKL - UPL/ SPPL/ Surat payment in accordance with the Persetujuan Dokumen Lingkungan bidding value for the winner of Hidup/ Izin Lingkungan (AMDAL/ Mining Permit Area UKL - UPL/ SPPL)) THE DEVELOPMENTS OF COAL MINING PERMITS IN EAST KALIMANTAN THE NUMBER OF COAL AND OTHER MINERALS MINING PERMITS IN EAST KALIMANTAN

Prov/Regency/ Exploration Production Operation Total No City Total Area (Ha) Total Area (Ha) Total Area (Ha) COAL I MINING PERMITS

1.1 Province --- - 2 4.081 2 4.081,00

1.2 Paser 40 102.553,71 37 27.970 77 130.523,57

Penajam 1.3 59 110.229,32 46 71.374 105 181.603,80 Paser Utara

1.4 Samarinda 0 - 53 26.000 53 26.000,25

1.5 Kutai Timur 102 840.003,00 29 219.686 131 1.059.689,02

Data Source : December 2015 Cont .....

Exploration Production Operation Total Prov/Regency/ No City Total Area (Ha) Total Area (Ha) Total Area (Ha)

Kutai 1.6 194 466.878,62 194 248.258 388 715.136,59 Kartanegara

1.7 Kutai Barat 50 303.797,00 68 292.975 118 596.772,00

1.8 Berau 64 187.571,60 21 62.977 85 250.548,73 Total of Mining 509 2.011.033,25 450 53.321,71 959 2.964.354,96 Permits Total of II 7 251.490,00 23 754.649,63 30 1.006.139,63 PKP2B

OTHER III Metallic Mineral, Non Metallic Mineral, and Rock 1.256.640,95 MINERALS

TOTAL (I + II + III) 989 5.227.135,54

Data Source : December 2015 TOTAL OF CNC COAL MINING PERMITS (IUP) & PKP2B IN EAST KALIMANTAN

S t a t u s No. Prov/Regency/City CNC Area Non CNC Area

1 EAST KALIMANTAN 2 -- 13 2 PASER 64 Production PENAJAM PASER 3 103 Operation Mining 2 UTARA Permits : 4 SAMARINDA 52 1.361.030,23 1 5 KUTAI TIMUR 47 Exploration 84 KUTAI Mining Permits : 6 313 1.603.325,47 KARTANEGARA 75 7 KUTAI BARAT 100 PKP2B : 1.006.139,63I 18 8 BERAU 70 15 TOTAL 751 3.970.494,87 208 1.256.640,67

Data Source : December 2015 COAL PRODUCTION DATA OF SURFACE MINING UP TO NOVEMBER 2015

Province/Regency 2012 2013 2014 2015 /City (Ton) (Ton) (Ton) (Ton)

PKP2B 157.505.476,42 172.437.465,66 167.042.763,09 128.036.681,79

East Kalimantan 1.408.672 1.387.788 892.213,05 600.514,64

Paser 1.233.421 2.232.564 669.229,20 313.504,30

Penajam Paser 636.421,66 1.587.092,84 1.206.281,87 527.136,72 Utara

Samarinda 11.327.858,64 9.847.170,47 5.925.160,91 4.728.904,59 Kutai Timur 2.420.551 2.592.462 1.919.747 1.902.477,00

Kutai 38.146.600,94 55.534.330,76 56.220.172,08 41.862.105,42 Kartanegara Cont .....

Province/Regency /City 2012 2013 2014 2015 (Ton) (Ton) (Ton) (Ton)

Kutai Barat 3.211.180,12 3.056.421,89 1.055.863,54 643.638,83

Berau 6.438.223,88 9.051.449,42 7.147.364,23 10.143.230,77

Total 222.330.417,66 256.340.970,04 242.120.677,97 188.758.194,06

Data Source : December 2015 GROUND DISTURBANCE, RECLAMATION AND REVEGETATION LAND DATA UP TO 2014

Concession Area Ground Reclamation Province/Regency/ Revegetation Land No of Production Disturbance Land Area City Area (Ha) Operation (Ha) Area (Ha) (Ha)

COAL MINING I PERMITS

1 East Kalimantan 4.081,00 1.679,25 1.213,45 908,59

2 Paser 27.217,86 1.644,07 615,70 461,32

Penajam Paser 3 71.374,48 30,40 Utara 118,70 48,00

4 Samarinda 26.000,25 196,07 194,00 558,19

5 Kutai Timur 195.126,02 147,07 147,07 459,71

6 Kutai Kartanegara 245.867,59 22.604,38 5.070,88 5.070,88

7 Kutai Barat 292.975,00 1.292,80 220,52 165,28 Cont ......

Concession Area Ground Province/Regency/ Reclamation Revegetation Land No of Production Disturbance City Land Area (Ha) Area (Ha) Operation (Ha) Area (Ha)

8 Berau 62.977,13 1.281,72 640,00 410,70

9 Bontang - - - -

10 Balikpapan - - - -

Total of Mining Permits 925.619,33 29.638,82 8.151,69 7.388,24

II PKP2B 698.415,63 73.433,98 33.389,89 30.561,78

T o t a l ( I + II ) 1.624.034,96 103.072,80 41.541,58 37.950,02

Data Source : December 2015 MINING CONDITIONS IN 2015

Total of Mining Permit Concession Area (Ha) Province/Regency/ Production Production City Exploration Exploration Operation Operation Province - 2 - 4.081 Berau 64 21 187.572 62.977 Bontang - - - - Samarinda - 53 - 26.000 Balikpapan - - - - Kutai Kartanegara 194 194 435.289 248.258 Kutai Timur 102 29 840.003 219.686 Kutai Barat 50 68 303.797 292.975 Penajam Paser Utara 59 46 110.229 71.374 Paser 40 37 102.554 27.970 Total of Mining Permits (1) 509 450 1.979.444 953.321 PKP2B (2) 7 21 300.350 698.416 T o t a l (1+2) 516 471 2.279.794 1.651.737 Data Source : December 2015 MINING PERMIT CONDITIONS IN 2015 AND ESTIMATION IN 2035

Ground Total of Mining Mining Permits Reclamation Revegetation Regency/City Disturbance Permits After Concession Area Land Area (Ha) Land Area (Ha) Area (Ha) 2035 After 2035 (Ha)

Province 1.679,25 1.213,45 908,59 2 4.081 Berau 1.281,72 640 410,7 85 229.146 Bontang - - - - - Samarinda 558,19 196,07 194 59 25.613 Balikpapan - - - - - Kutai 98 Kartanegara 22.604,38 5.070,88 5.070,88 215.913 Kutai Timur 459,71 147,07 147,07 108 871.268 Kutai Barat 1.292,80 220,52 165,28 54 289.068 Penajam Paser 16 Utara 118,7 48 30,4 24.565 Paser 1.644,07 615,7 461,32 20 27.611 Total (1) 29.638,82 8.151,69 7.388,24 442 1.687.264,31 PKP2B (2) 73.433,98 33.389,89 30.561,78 28 998.765,63 Total (1+2) 103.073 41.542 37.950 470 2.686.030 Data Source : December 2015 RECLAMATION GUARANTEE

Province/Regency/ Amount of Guarantee No City Rp USD 1 East Kalimantan 12.531.166.365,00 - 2 Paser 14.234.127.190,01 - 3 Penajam Paser Utara 4.699.132.018,20 - 4 Samarinda 226.277.339.967,21 - 5 Kutai Timur 11.366.364.672,00 14.718,36

6 Kutai Kartanegara 649.008.362.543,08 - 7 Kutai Barat 42.513.232.338,90 - 8 Berau 21.601.272.121,07 - T o t a l 982.230.997.215,47 14.718,36

Data Source : December 2015 POST-MINE GUARANTEE

Province/Regency/ Amount No. City Rp USD 1 East Kalimantan 3.742.473.331,00 -

2 Paser 1.970.858.966,57 -

3 Penajam Paser Utara 2.585.192.747,00 -

4 Samarinda 41.857.472.437,80 -

5 Kutai Timur 1.164.001.572,00 -

6 Kutai Kartanegara 40.107.669.425,87 542.667,01

7 Kutai Barat 5.941.212.323,63 -

8 Berau - -

T o t a l 97.368.880.803,87 542.667,01

Data Source : December 2015 THANK YOU