PT Adaro Energy

Indonesia Tbk
September 2022
Disclaimer

These materials have been prepared by PT Adaro Energy Tbk (the “Company”) and have not been
independently verified. No representation or warranty, expressed or implied, is made and no reliance should be
placed on the accuracy, fairness or completeness of the information presented or contained in these materials.
The Company or any of its affiliates, advisers or representatives accepts no liability whatsoever for any loss
howsoever arising from any information presented or contained in these materials. The information presented or
contained in these materials is subject to change without notice and its accuracy is not guaranteed.

These materials contain statements that constitute forward-looking statements. These statements include
descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the
consolidated results of operations and financial condition of the Company. These statements can be recognized
by the use of words such as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” or words of similar
meaning. Such forward-looking statements are not guarantees of future performance and involve risks and
uncertainties, and actual results may differ from those in the forward-looking statements as a result of various
factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking
statements to reflect future events or circumstances.

These materials are for information purposes only and do not constitute or form part of an offer, solicitation or
invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or
any part of it form the basis of, or be relied upon in any connection with, any contract, commitment or investment
decision whatsoever. Any decision to purchase or subscribe for any securities of the Company should be made
after seeking appropriate professional advice.

2
Snapshot of Adaro Energy

Lost-time injury Employees Restored Land Countries

frequency rate ~12,000 2,596 Ha Served
(LTIFR) 13
0.12 in 2021

2021 Operational Production 2021 Revenue

EBITDA 52.7 million US$3.99 billion
US$2.1 billion

3
Indonesia’s leading integrated energy group
8 pillars supporting sustainable growth

Main operating pillars: pit-to-power integration

Thermal and metallurgical coal operations in Indonesia and
Australia
Mining and logistics contractors to support the group’s operations
Operates coal-fired and renewable power plants. Focused on
development of green energy sources: hydro, solar, wind.

Supporting pillars
Develops forest areas for carbon absorption, ecosystem
restoration, and manages operational land aspects.
Water treatment, NRW management, and water solution services.
Investment arm to capture overseas investment opportunities.
Non-profit foundation coordinating the group’s CSR activities.

4
On track to meet FY22 guidance
provides cash to invest in EV value chain and renewables

Coal production (Mt) Consolidated planned strip ratio (bcm/t)

58-60
58.0 5.1
4.7
4.6
4.2 4.1
3.8
54.0 54.5
52.7
51.8

2017 2018 2019 2020 2021 2022F 2017 2018 2019 2020 2021 2022F

Kestrel MetCoal Production (Mt) Consolidated Capital expenditure ($m)

6.8 7.0
496 489
5.7 5.7
4.8 300 - 450

229
169 193

2018 2019 2020 2021 2022F 2017 2018 2019 2020 2021 2022F

5
One of Indonesia’s largest IPPs
Adaro Power’s gross power generation capacity stands at 2,260 MW

6
The value of the Green Economy
investment opportunities in Indonesia are substantial

Value at stake
Green economy Growing demand for

Green minerals
Global demand in 2030
as multiple of 2020-level

$3T 8-10x

Investment in renewable energy 5-10x

by 2030
5.7x

3.0x

2.0x

$800B
1.3x 1.3x 1.2x

Manganese Nickel Lithium Cobalt Silicon Copper Aluminum Steel

Global EV sector by 2030 sulfate

7
25GW of green energy needs by 2030
In Indonesia, before accounting for increased demand for processing green minerals

102GW of installed capacity by 2030

8
The Green Economy
Driving demand for Green Minerals

Electric vehicle Wind technology Solar technology

13 28 3 26 13 14 13

AI Ni Li Fe AI Si AI
Aluminium Nickel Lithium Iron Aluminium Silicon Aluminium

30% More Aluminium used in electric vehicles

than internal combustion engines 90 Metallurgical coal needed to produce
Steel for each MW of wind power 7 Polysilicon needed for each MW solar
PV plant
tons tons

35 kg Nickel needed in a single car lithium-ion

battery pack 120 Steel needed for each MW of wind
power 4M Aluminium demand from the solar
power sector by 2040
tons tons
8 kg Lithium needed in a single car lithium-ion
battery pack 1 Aluminium in a single wind turbine

ton

9
Adaro is well positioned
to capture these opportunities, now and in the future

Adaro has the necessary skillset… …to capture these opportunities

Strong balance sheet and financial capabilities Operating metallurgical coal mine in Indonesia & Australia

Proven track record in building and Building a 500K tons aluminium smelter
operating large-scale, complex projects

Deep experience and knowledge in Building one of the world’s largest green industrial estates in
Indonesia’s mining sector North Kalimantan, including plans to build several GW of
hydro power & Solar PV plants

Strong ownership and management team Continue developing renewable energy projects within the
with extensive connections region, and one of two consortiums to passed pre-qualification of
waste-to-energy project in Indonesia

Adaro will continue to explore opportunities to serve the green mineral needs
of the new economy

10
The world’s largest Green Industrial Park
Being developed by Adaro in North Kalimantan

• Located in a very strategic location in terms of

export & import, and potential supply of mineral
sources and smelting industries

• Total area of 16,000 Ha, consists of 2 (two)

large overlay area – 11,500 Ha and 4,700 Ha

• Potential development of a large-scale public

port to support the industrial logistics

• Huge potential of Hydro Power Plants

development to power the industrial estate

11
1st Project: Aluminium Smelter
Scope of project is 1.5mt of Aluminium production

Estimated COD: Q1 2025

12
Recently energized captive solar PV
~600 kWp to supply to our mining area

o We have installed 130 kWp PV Rooftop, and

another 468 kWp PV Floating (so far the
biggest installed floating PV in Indonesia)

o The project is expected to generate 156,000

kWh/year and serves a captive market to
support Adaro Group’s mining operation.

o Environmental impact of this project includes

replacing 33,000 liters of diesel per year, and
avoiding emission of 98 ton CO2/year.

13
Financials That
Will Drive the
Transition
Adaro Energy Indonesia’s Performance
Continue to deliver consistent results and strong cash flows

OPERATIONAL 1H22 1H21 Change

Production (Mt) 28.01 26.49 6%
Sales (Mt) 27.50 25.78 7%
OB removal (Mbcm) 102.05 115.22 -11%
FINANCIAL (US$ millions, unless indicated) 1H22 1H21 Change
Net Revenue 3,541 1,563 127%
Core Earnings 1,447 330 338%
Operational EBITDA 2,339 635 269%
Cash 2,244 1,208 86%
Net Debt (Cash) (770) 305 -352%
Capex 157 74 112%
Free Cash Flow 1,040 324 221%
Operational EBITDA Margin 66.1% 40.6% 2545 bps
Net Debt (Cash) to Equity (x) (0.14) 0.08 -2153 bps
Net Debt (Cash) to Last 12 months Operational EBITDA (x) (0.20) 0.29 -4923 bps
Cash from Operations to Capex (x) 8.63 5.38 325 bps

15
 Adaro Minerals MetCoal Business
supports the Steel Industry a key component in Wind Turbine and the Solar Industry
Adaro Minerals key financial highlights Adaro Minerals metcoal production (Mt)
OPERATIONAL 1H22
We expect consistent production growth, 4.0
Production (Mt) 1.53 reaching 6 MT+ in the medium term.
Sales (Mt) 1.28 2. 8 - 3.3
OB removal (Mbcm) 3.50 2.3
FINANCIAL (US$ thousands, unless 1H22
indicated)
Net Revenue 436 1.0

Core Earnings 207

Total Asset 1,139
Operational EBITDAMargin 66.1% 2020 2021 2022F 2023F

Sales by Destination 1H22 Adaro Minerals Strip Ratio Remains Very Low
4.0

3.5

3.0

2.5
2.3
2.0 2.2 2.2

1.5

1.0
2020 2021 1H22

16
Adaro Energy
Why Adaro
• Integrated energy company with strong footing in the energy industry.
Solid Foundation

• Always seek to increase our value-creation capability

Value Creation

• Integrated business model enables us to control cost and manage risks

Positioned for Sustainable Growth better, ensuring business sustainability.

Capturing Opportunities in Green • Well positioned to capture the opportunity through AMI, which will focus
on managing and developing our non-coal mineral assets.
Economy

Consistent Dividend Payment and • Cumulatively from 2008, we have paid approximately US$1.7 billion in
dividends with average payout ratio of 46%.
Shareholder Return
• Cost competitiveness resulted in one of the highest operational EBITDA
Industry Leading Cost Position margins in the sector, reaching 53% of operational EBITDA margin in
2021.

• Management has been consistent with strategy execution while also

Experienced Management Team being nimble in reacting to business developments

• PT Adaro Indonesia received 4th PROPER Gold Award

Commitment to ESG • MSCI maintains our BBB ESG rating to reflect our improved
environmental performance.

18
 Large Coal Reserves and Diverse Portfolio
across Indonesia and Australia
1 2 3
PT Adaro Minerals
4 AEI has more than 8.5
Adaro Indonesia: Balangan Coal MIP: 75% stake billion tonnes (Bt) of coal
Indonesia Tbk (AMI):
88.5% Companies:
Central and East
S Sumatra resources and 1.4 Bt of
Existing, S Kalimantan sub-bituminous coal reserves across
Kalimantan
S Kalimantan sub-bituminous Reserves 210.2 Mt
sub-bituminous Reserves 125Mt
Metallurgical coal
Resources 305 Mt
thermal and metallurgical
Reserves: 171 Mt coal – providing us with
Reserves: 731 Mt Resources: 265 Mt
Resources: 980 Mt
Resources: 3.3 Bt flexibility in the coal
market.

5 6
BEE: 61.04% stake BEP: 10.22% stake
S Sumatra with option to acquire 6
sub-bituminous 90%
Geological study phase E Kalimantan
sub-bituminous Kalimantan
Resources 3.3 Bt
Sumatra 5
3

7 Sulawesi
7
Kestrel Coal Mine NT 1
QLD 4 2
48% of 80%
Queensland, Australia WA
Premium HCC SA

Java
NSW
Reserves: 190 Mt
Resources: 430.5 Mt VIC

TAS

Note: Reserves and Resources numbers above are before taking into account AEI’s equity ownership
19
Integrated Business Model
with control over each part of the supply chain

THERMAL COAL MINING SERVICES Maritim Barito Perkasa 100% Makmur Sejahtera Wisesa
(MBP) (MSW) 100%
Adaro Indonesia (AI) 88.5% Saptaindra Sejati (SIS) 100% Barging & Shipping Operator of 2x30MW mine-
Coal mining, S. Kalimantan Coal mining and hauling
Sarana Daya Mandiri 51.2% mouth power plant in
contractor S. Kalimantan
Balangan Coal 75% (SDM)
Coal Mining, S. Kalimantan 100% Dredging & maintenance in
Jasapower Indonesia (JPI)
Barito River mouth Operator of Solar PV at AI’s
Mustika Indah Permai 75% Operator of overburden
mine site in S. Kalimantan
(MIP) crusher and conveyor Indonesia Multi Purpose 100%
Coal Mining, S. Sumatra Terminal (IMPT)
Adaro Jasabara Indonesia 100%
Port management & Tanjung Power Indonesia 65%
Bukit Enim Energi (BEE) 61% (AJI)
Coal Mining, S. Sumatra terminal operator (TPI)
Mining services
Indonesia Bulk Terminal Partner in 2x100MW power
Bhakti Energi Persada 10.2% 100%
Adaro Mining Technologies 100% plant project in S.
(BEP) (IBT)
(AMT) Coal terminal & fuel Kalimantan
Coal mining, E. Kalimantan
Coal research & storage
development
METALLURGICAL COAL Puradika Bongkar 100%
Muat Makmur (PBMM) Bhimasena Power 34%
PT Adaro Minerals 83.8% Cargo loading & unloading Indonesia (BPI)
Indonesia Tbk (AMI) COAL TRADING
Coal mining, C. Kalimantan, Harapan Bahtera Internusa 100% Partner in 2x1000MW
E. Kalimantan Coaltrade Services 90% (HBI) power generation project
International Pte. Ltd (CTI) Shipping administration in Central Java
Kestrel Coal Resources1 48% Coal Trader
Queensland, Australia Barito Galangan Nusantara 100%
(BGN)
1) Kestrel Coal Resources has 80% ownership on
Kestrel Coal Mine
Maintenance services

20
Solid Financials Backed by Strong
Operations
Financial position continues to improve Strong cash balance and free cash flow generation
2,500
15.0% 500
414 374 Net Debt(Cash) (rhs) 400 2,000
10.0% 9.6% 300
9.4%
167 200
5.0% 1,500
4.2% 100
0
0.0% 1,000
-100
(61)-1.5% (112) -200
-5.0% -2.3%
-300 500
-10.0% -9.8% -400
(435) -500 -
-15.0% -14.0% -600 2017 2018 2019 2020 2021 1H22
-700
-20.0% -800 Cash (million US$) FCF (million US$) Capex (million US$)
(770)
FY17 FY18 FY19 FY20 FY 21 1Q22 1H22

Almost three decades of production experience through various coal cycles

60 8.00
50 7.00
Production (Mt)

6.00

Strip Ratio (x)

40 5.00
30 4.00
20 3.00
2.00
10 1.00
0 -

Tutupan Wara Paringin Balangan AMC MIP SR

21
Industry Leading Efficiency
One of the lowest cost operators in Indonesia
Adaro’s estimated coal cash cost breakdown (1H22) Electrification to reduce the usage of diesel gensets
Fixed
overhead,
5%
Coal
processing,
10%
Mining,
35% - 40%
Freight &
handling,
20%

Fuel, 25%
- 30%

Strong operational EBITDA generation and healthy operational EBITDA margin

2,500 66% 80%

53% ▪ Consistently delivers on operational EBITDA
70%
2,000 target and performed in-line with guidance.
60%
▪ Healthy operational EBITDA margin on the back
50%
1,500 40% 39% of better cost control from integrated business
35% 35% 40%
2,339 model.
1,000 2,104
30%
1,315 1,408 20%
1,207
500 883
10%
- 0%
2017 2018 2019 2020 2021 1H22

Operational Ebitda (US $ M) Operational Ebitda Margin

22
Well Positioned Product and Strong
Customer Base Focused on Asia
Envirocoal is among the lowest pollutant content coal in the seaborne market

Ash content: 2%-3% (adb) Nitrogen content : 0.9% - 1.0% (daf) Sulfur content: 0.1% - 0.25% (adb)

Customer geographical breakdown (1H22) Customer type by volume (1H22)

Europe Others
1% 1%
China
10% Indonesia Others,
23% 10%

India
15%
Power
Plant,
90%

Southeast Northeast
Asia *others include cement,
Asia
27% pulp & paper, and industrial
23%

23
PT Adaro
Minerals
Indonesia Tbk
(AMI)
Adaro Minerals Indonesia at a Glance
Indonesia’s leading metallurgical coal producer with low -cost, efficient
operation supported by Adaro Group’s integrated supply chain network

Five CCoW holders located in Central and East Kalimantan, Indonesia.

Large coal reserves and resources base which supports long-term sustainable growth.
Coal reserves: 170.7 Mt. Coal resources: 980 Mt.

Coal production in 2021 reached 2.3 Mt, and coal production target in 2022 is 2.8 – 3.3 Mt
(▲ 22% - 43% y-o-y).

Strong demand profile from blue-chip steel companies. Current customers are located in
China, Japan and Indonesia.

Offers coal supply diversification for customers in a market dominated by Australia,

Canada and the US.

Close proximity to key markets offers customers with more competitive cost and shorter
transportation time.

25
Company Overview - ADMR
Established in 2007, AMI carries out an integrated mining
activities through its subsidiaries, which has one of the largest
greenfields area in Central Kalimantan for metallurgical coal.
The Company’s subsidiaries own 5 Coal Contract Of Work
(“CCoW”) located in East Kalimantan and Central Kalimantan with
total area up to 146,579 ha.
The 5 CCoWs are in the operation and production operation
development stages: Maruwai Coal is currently operating and
selling metallurgical coal, Lahai Coal is conducting mining
optimization, meanwhile Kalteng Coal, Sumber Barito Coal and
Juloi Coal are in development phase.

CCoW STAGE COALS

Lahai Green Coal

Maruwai Hard Coking

Coal, Green
Coal
Metallurgical Coal
Kalteng Met-Coal

Juloi Met-Coal

Sumber
Met-Coal
Barito

Notes : Operation

Production Operation Development Cokes

26
Large Coal Resource and Reserves
Coal Resource
Total Coal
Company / Locality Resources
Measured Indicated Inferred Compliance One of the largest
(Mt) (Mt) (Mt) Standard
(Mt) undeveloped met
LC - Haju
(Green Coal)
4.4 3.8 0.4 0.1 JORC coal reserves and
MC - Lampunut resources globally
105.4 98.4 6.9 0.2 JORC
(Metallurgical and Green Coal)
JC - Juloi Northwest
629.8 - 269.6 360.3 JORC
(Metallurgical)
JC - Bumbun
(Metallurgical)
174.5 60.4 57.8 56.4 JORC Premium quality hard
KC - Luon
50.9 24.7 19.3 6.9 JORC
coking coal with low
(Metallurgical)
ash, low
SBC - Dahlia Arwana
(Metallurgical)
15.0 6.5 6.5 2.0 JORC phosposrus, and
TOTAL 980.0 193.8 360.5 425.7 high vitrinite content

Coal Reserves
Total Coal
Company / Locality Reserves
Proved Probable Compliance Long reserves life,
(Mt) (Mt) Standard
(Mt) based on current
LC - Haju
(Green Coal)
2.3 2.3 0.03 JORC production
MC - Lampunut
89.6 81.2 8.4 JORC
(Metallurgical and Green Coal)
JC - Bumbun
55.5 - 55.5 JORC
(Metallurgical) *Coal Reserves and Resources data is as
KC - Luon of August 2021 from independent
17.7 - 17.7 JORC
(Metallurgical) consultant PT Quantus Consultants
SBC - Dahlia Arwana Indonesia
5.6 - 5.6 JORC
(Metallurgical)
TOTAL 170.7 83.4 87.2 27
 Established Infrastructure to Ensure
Operational Excellence
Lampunut Coal Handling and Processing Plant
Crushing Plant : 600 tph
One of the largest CHPPs in Indonesia in
terms of capacity

Reduces ash from 12% ad to 4.5% ad

Performance test completed in November 2020

Washing Plant : 525 tph (max: 550 tph)

WASHING – 3 Process Circuit

DMC Hydrocyclone & Spiral Floatation

1.4 – 50 mm 0.25 – 1.4 mm 0.25 mm
28
Supply Chain: from Coal Terminal to
Vessel Loading Points
Barge-to-barge

Barge-to-vessel

Bulk Terminal

29
Competitive Advantages
• Low ash
• Low phosphorus
Product • High vitrinite
Quality
Committed to develop
the community and
minimize environmental Lampunut is the first and
CSR and only HCC in Indonesia
impact through various
green initiatives Green Position (Source: IHS Markit)
Initiatives

Competitive
Advantages

Coal The western mines

Lampunut is a very low- Resources projects are one of the
cost mine, ranked and largest greenfield projects
Low cost
within the lowest Reserves in the world
quartile in the global
cost curve
The
manage-
ment Managed by seasoned Adaro
executives and engineers with proven
track record of creating maximum
sustainable value
30
PT Adaro Indo
Aluminium
(AIA)
PT Adaro Indo Aluminium
Leading the Adaro Group’s green transformation

Increasing revenue contribution from non-coal to balance our business

Supporting Government’s plan on green industry and processing of mineral product

Looking to partner with reliable and experienced companies

Development process will be conducted in stages

Positive LT outlook as aluminum is needed in many industries including automotive

Reduce aluminum imports, create job opportunities and contribute to state revenue

32
Global Demand Outlook

Industry 2018 2040 Remarks

• Higher demand for electric vehicle, especially for battery packaging and heat
Transportation 25MT 43MT sink.
• Penetration to reduce vehicle weight and use of gasoline.

Building and • Urbanization and growing construction industry.

22MT 29MT
Construction • Penetration for building materials.

Consumer
15MT 21MT • Increasing demand for consumer and industrial products.
and Industrial

• Increasing demand for tin packaging.

Packaging 13MT 19MT
• Increasing demand for foil and plastic substitution.

• Increasing demand for energy sector application, such as solar panel structure.
Energy 11MT 16MT
• Copper substitute for transmission cable.

Source: Statista, 2020

▪ Demand for aluminum is estimated to increase
on the back of economic growth in Asia.
▪ Demand for aluminum will be supported by the
increase in transportation sector, in line with the
commitment of global citizen and the
transportation industry to increase the
production of new energy vehicle.

33
Domestic Supply and Demand Balance

Domestic Supply and Demand of Aluminum

2500

2000

1500

1000
Gap

500

0
2020 2025
Indonesian Production Capacity Indonesian Aluminum Demand

Source: Pre-Feasibility Study Guiyang Aluminum Magnesium Design & Research Institute Corp. Ltd.

The high gap between supply and demand of aluminum in Indonesia will potentially increase
the country’s reliance on imported aluminum.

34
Adaro Water
Adaro Water
Owns & Operates 1,670 lps of Water Treatment Plants

Also Supports Mining Operations through Slurry Management Business Unit

Dumai Tirta Persada 1 2 Drupadi Tirta Gresik
3
Grenex Tirta Mandiri
Location : Dumai, Riau Location : Gresik, East Java
Location : Bekasi, West Java
Size : 450 lps Size : 400 lps
Size : 200 lps
Adaro Shares : 49% Adaro Shares : 100%
Adaro Shares : 49%
Status : First phase Status : In operation
Status : Started construction
(50 lps) since 2012
completed

Adaro Wamco Prima 4 1

Location : Tanjung,
South Kalimantan
Business : Mining pump
services 4
Adaro Shares : 60%
Status : Operation
6
5
5
Drupadi Tirta Intan
Location : Banjar, South Kalimantan
Size : 500 lps 3
Adaro Shares : 100% 2
Status : In operation since 2012

Adaro Tirta Mentaya 6 Adaro Water is currently in the process to achieve operational excellence through
Location : Sampit, Central Kalimantan continuous improvement in its operating subsidiaries, including WTPs operations and
Size : 320 lps (contract), 400 lps (capacity) slurry pumps operations. Meanwhile, on the construction side, Adaro Water continues
Adaro Shares : 90% to ensure that the project can achieve its goals in terms of schedule, budget & quality.
Status : In operation upto 250 lps From business development perspective, Adaro Water continues to actively seeking
for new projects through PPP, non PPP and acquisition.
36
Sustainability and
Green Initiatives
Balance of People, Planet and Profit
We strive to balance our responsibilities among the generation of profit, the utilization of
planet and employment of people.

Our corporate social responsibility programs

focus on five main areas:

Education Economic Health

development

Environmental Socio-cultural
enhancement Enrichment

Our environmental programs cover four main areas:

land, air, water, and biodiversity.

PT Adaro Energy Indonesia Tbk is rated BBB on MSCI ESG ratings.

38
Improving Environmental Performance

Reduced total energy consumption by 21% y-o-y …and reduced GHG emission (scope 1) by 22% y-o-y

2,500,000
35,000
30,000 2,000,000

Ton CO2 eq.

25,000
Terajoule

1,500,000
20,000
15,000 1,000,000
10,000
500,000
5,000
- -
2019 2020 2019 2020

Total Energy Consumption (in Terajoule) GHG Emission Scope 1 (in Ton CO2 eq)

Innovative projects to improve efficiency and environmental performance

Fleet Management Kelanis Smart Inverter

System reduces Solar Cell reduces
queueing time and diesel usage and CO2
energy used emission

39
Ecosystem Restoration and Carbon
Capture

Through Adaro Land Pillar, we have subsidiaries which

own forest management permits for ecosystem
restoration and forest management permits for carbon
absorption.

PT Alam Sukses Lestari holds license to use timber

product – ecosystem restoration in natural forest which
allows restoration of forest ecosystem to achieve
balanced biodiversity.

PT Hutan Amanah Lestari holds license for utilization of

carbon absorption and is one of the largest holders of
such license in Indonesia. We expect that once
operational, carbon trading will be the main business of
this company.

40
Reclamation and Rehabilitation

Start

6 months

+ 5 Years

41
Awards and Recognitions
2012 2013 2014 2015 2016

PROPER gold award PROPER green award PROPER green award PROPER green award PROPER green award
Ministry of Environment & Ministry of Environment & Ministry of Environment & Ministry of Environment & Ministry of Environment&
Forestry Forestry Forestry Forestry Forestry
Aditama gold award Aditama gold award Aditama gold award Cultural based community Global CSR bronze award
For environment excellence in For environmental excellence in For environmental excellence in empowerment award For community-led sanitation
the coal sector the coal sector the coal sector Awards in several categories Annual Global CSR & Summit
Ministry of Energy & mineral Ministry of Energy & mineral Ministry of Energy & mineral Corporate Forum for
resources resources resources Community Development & Padmamitra award
Ministry of Human Dev For poverty alleviation
Social empowerment award Global CSR bronze award Bronze sustainability award Ministry of Social Affairs
Won nine awards honoring For sustainable clean water For sustainable investment Bakti Husada award
companies that run CSR program RobecoSAM For community health
programs Pinnacle Group Global CSR development
Ministry of Human Dev Ministry of Health

2017 2018 2019 2020 2021

PROPER green award PROPER green award PROPER gold award PROPER gold award PROPER gold award
Ministry of Environment & Ministry of Environment & Ministry of Environment & Ministry of Environment & Ministry of Environment &
Forestry Forestry Forestry Forestry Forestry
Aditama gold award Aditama gold award Global CSR award, one gold MSCI ESG Ratings upgraded MSCI ESG Ratings upgraded
For environment excellence in For environment excellence in and two silver to BB to BBB
the coal sector the coal sector For early childhood education MSCI MSCI
Ministry of Energy & mineral Ministry of Energy & mineral program, CSR Leadership and
resources resources environmental excellence in Charity and Community Best Environmental
leader program. Impact Excellence Award - Silver
Best of environmental Best of coal mining service Annual Global CSR & Summit Coaltrans Asia Global CSR Summit & Awards
management & safety business management &
award safety award Best Implementation of Aditama award
Ministry of Energy & mineral Ministry of Energy & mineral Good Mining Practices Good mining practices
resources resources MoEMR MoEMR

42
Adaro Services
and
Adaro Logistics
 Ensuring Operational Excellence

Key part of our vertical integration.

Ensures operational excellence,

productivity improvement and timely
reliable delivery to customers.
Stable earnings profile buffers against the
volatility in coal price.
Focus on providing services for companies
in the Adaro Group.

Units 1H22 1H21 1H22 vs 1H21

Overburden Removal Mbcm 84.55 80.46 5%

SIS
Coal Transport to Port Mt 26.85 19.02 41%
MBP Coal barging Mt 25.96 24.55 6%

44
Industry
Outlook
 Prices Remain Near Historical Highs
500 1100

450
1000
400
900
350
800
300

250 700

200
600
150
500
100
400
50

0 300

NEX (US$) ICI 3 (US$) ICI 4 (US$) QHD 5500 NAR (RMB)

▪ Prices have remained volatile at high levels.

▪ Demand from India and Southeast Asia has supported Indonesian thermal coal imports – due to inclement
weather and also supply crunch.
▪ Australian and Indonesian thermal coal supply has underperformed over the first four months vs last year.
▪ Prices for benchmark Australian coal and Harga Batu Bara Acuan (HBA) have reached historical highs.

46
Long Run Demand Remains Significant

Global thermal coal imports demand (Mt)

1,200
▪ Coal remains as significant part of
1,000 energy mix in emerging economies in
Asia
800 ▪ Despite push towards renewable
Million Tonnes

energy, emerging economies in Asia

600 still rely on coal for electricity
generation due to its availability and
400 affordability.
▪ As the world aims to reduce carbon
200 emission, demand for coal will be
affected.
0
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
China India JKT SEA Europe ROW

Source: McCloskey by OPIS, a Dow Jones Company

(“McCloskey”)

47
Robust Demand Outlook

Global metallurgical coal imports demand (Mt)

450
400
▪ The long-term demand fundamentals
350
for metallurgical coal remain intact,
Million Tonnes

300 underpinned by infrastructure growth.

250 Steel production and consumption is
forecasted to grow. Met coal demand is
200 expected to reach nearly 400 Mt in
150 2030.
▪ India is expected to be the growth
100 driver and China’s demand is
50 forecasted to remain stable in the next
decade.
0
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
China India Japan
South Korea Europe South America
Others
Source: McCloskey

48
 Southeast Asia is A Key Market

SEA electricity demand more than double to 2040 ASEAN (5) steel demand grows moderately in the short-term

80 10%
78
5%
76
74 0%
72
78 78 -5%
70
68 73
-10%
66 69
64 -15%
2019 2020 2021F 2022F

Volume (Mt) y-o-y growth

Notes: TWh = terawatt-hours ASEAN (5): Indonesia, Malaysia, Philippines, Thailand, Vietnam
Source: Southeast Asia Energy Outlook 2019, International Energy Agency 2019 Source: Worldsteel Association Short Range Outlook, April 2021

Overview of Southeast Asia

▪ The region is home to around 655 million people and 45 million people is still without access to electricity.
▪ Its growth in electricity demand, at 6% CAGR, has been among the fastest in the world as the region aims for universal access to
electricity by 2030.
▪ Coal has been the fastest growing fuel in SEA’s energy mix, nearly 20 GW of coal-fired power plant is under construction (IEA).
▪ Coal with low pollutant content will be more favoured in the market as many countries try to control emission and new power
plants utilize advanced boiler system.

49
Regulatory Updates
Conversion of CCOW to IUPK
• Continuation of AI’s CCOW.
• Government Regulation (PP No 15 of 2022) stipulates the changes in the commercial
terms: royalty rate, CIT rate, and additional profit sharing with the regional and central
government.
CCOW IUPK
1 Royalty rate 13.5% 14% - 28%
2 CIT 45% 22%
3 Profit Sharing (from net income)

- Central Gov't - 4%
- Regional Gov't - 6%

• There could be an impact on concession size that we expect to be minor.

Change in the royalty rate of IUP

• This would impact MIP and Balangan Coal mines, representing approximately 15% of our
2022 production target. The royalty going forward will be based on HBA pricing and could
increase to between 7% and 10.5% from 3-5% currently.

50
Proposed Regulatory Updates
Public Service Agency or Badan Layanan Umum (BLU)
• The Ministry of Energy and Mineral Resources (ESDM) has applied for a principle permit to
form a Coal Special Entity or Public Service Agency (BLU) as a coal fee-collecting
institution.
• The BLU is to maintain availability of coal supply for domestic needs
• The coal price benchmark for BLU fee and compensation is proposed to be CV-based
• The price of coal for PLN's electricity generation needs is proposed to be market based,
while the BLU is proposed to be tasked with collecting fees from coal companies to cover
the difference between the market price and the price for the domestic market obligation
(DMO) of US$ 70 per ton for PLN.
• BLU is proposed to also cover DMO of non-PLN industries, excluding smelter industry
• Implementation target is 4Q22

51
Appendix:
Coal 101
Explaining the Value Chain

53
Seaborne Trade Routes

South Africa, Colombia and Russia

dominate the Atlantic trade

Indonesia and Australia dominate

the Pacific Seaborne trade

Source: IEA, 2020

54
How does pricing work?

Different coal types from different regions have distinct quality.

Indices are used to price different coal quality:

Global Coal NEWC Indonesia’s Harga QHD FOB (6,000 kc NAR)

Index Batubara Acuan marker assess the price of
the benchmark price (HBA) comprising of: Chinese coal that is being
for seaborne thermal Indonesian Coal shipped into the domestic
coal in the Asia- Index (ICI), gCN, and Chinese markets at the port of
Pacific region. Platts 5900. Qinhuangdao.

RB Index DES ARA

a coal price benchmark high coal price benchmark for high
CV thermal coal delivered CV thermal coal delivered at
FOB Richards Bay Coal the ports of Amsterdam /
Terminal in South Africa. Rotterdam / Antwerp

55