Kaltim Prima Coal

Most KPC customers are power generation companies. KPC has products and the qualities that can match many power plant designs around the world. One of the factors that contribute to our customer satisfaction is that KPC’s transportation cost is lower than that of other producers, due to the proximity of the port to the mine and the strategic location of Indonesia. KPC is acknowledged as a reliable coal supplier with a competitive pricing policy. The quality and size of the coal resources and the ability to load large bulk carriers from its own world class terminal enabled KPC to build a diverse portfolio for long term contracts. These are the backbones of KPC’s business.

As part of the company’s commitment to produce a quality product, monitoring of the coal quality is a very important component in the planning, implementation, monitoring and control process of coal mining, preparation and transportation process. The Quality Control Team monitors the process 24 hours per day to ensure that there will be no rejected product. At the time of this report being published there has never been a complaint from a customer regarding negative impacts resulting from the use of our product. The continued extending of contracts indicates that the customers are satisfied that our products are of sufficient quality. Sales of KPC coal in 2007 reached 39.72 million tonnes. Based on the type of coal, 3.41% is Prima variety, 70.60% is Pinang variety, and 25.99% is Melawan variety.

Sales were mostly directed to the international market demand, which was 93.1% out of the total sales. Geographically, Asia Pacific remains the biggest market. Detail of sales by region can be seen in the following graphic:

Until the time of publishing there has never been a complaint from customers related to a breach of their privacy. A system has been built to protect this privacy for the consumer. The ‘Confidentiality Agreement’ is always incorporated as a clause in the sales contract master. No violations of this agreement have occurred to date.