Energy Resources

Kideco is Indika Energy"s core asset in the energy resources sector and is the third largest producer of coal in Indonesia based on production volume. Total production in 2009 was 24.7 million tonnes. The Company continues to be one of the lowest-cost coal producers in Indonesia, supported by favourable geographical terrain and a well-developed coal mining infrastructure. The mining pits are also located close to each other. The main crushing plant and hauling road are all wholly-owned and operated 24-hours in all weather conditions to ensure timely product delivery and efficient operations. With a reserve life of 26 years totalling an estimated 579 million tonnes and resource of 1,140 million tonnes, Kideco is able to sustain production beyond its Coal Contract of Work (CCOW) expiration date.

Leveraging its fully-developed infrastructure with end to-end control of the mining process, Kideco is able to enjoy operational flexibility and reliability while optimizing cost advantages. As a result of its proven track record in meeting customer coal delivery obligations, Kideco has a network of international markets across various Asian and European countries - including South Korea, Taiwan, Hong Kong, Malaysia, India, Thailand, Italy and the United Kingdom - are mostly power plants. Kideco sold 5.7 million tonnes in 2009 to its domestic customers, representing 23.1% of its total coal output.

Kideco operates five coal mines in Roto North, Roto South, Roto Middle, Susubang and Samarangau in a 50,400- hectare concession area in Pasir regency, East Kalimantan. The Samarangau pit " a focal point of capacity expansion effort - has the largest coal reserve of 348 million tonnes, and resource of 694 million tonnes. Nearby Susubang has been identified as having additional coal reserves and the construction of roads and bridges to create better access to the crushing plant is in progress.

Indika Energy"s acquisition of coal mining rights added 53,050-hectares in Melawi regency to the Company"s West Kalimantan green-field project.

At Santan Batubara in East Kalimantan, through a jointventure between Petrosea and PT Harum Energy, a third generation Coal Contract of Works (CCOW) c

Revenue from coal trading was generated by wholly-owned holding company PT Indika Inti Corpindo (IIC), through the sale of Kideco's coal to third parties.

In line with planned growth and expansion of Kideco in 2009, the Kideco's Net Income grew by 25.5% to US$ 287.9 million from US$ 229.4 million the year before, while Sales grew by 21.3% to US$ 1.3 billion from US$ 1.1 billion.