Press Release

Jakarta, September 30, 2020 - PT Bukit Asam Tbk (PTBA) continues to record positive performance in the first semester of 2020 despite being affected by the Covid-19 pandemic and the decline in world coal prices. The company managed to book a net profit of IDR1.3 trillion in the first half of 2020. Meanwhile, in terms of revenue, PTBA recorded a net profit of IDR9 trillion by the middle of this year.

PTBA's cost of goods sold until the first half of 2020 decreased by 8% compared to the same period last year, from IDR6.9 trillion to IDR6.4 trillion. The company's assets as of June 2020 were recorded to remain strong at IDR26.9 trillion, with a cash and cash equivalent composition of IDR8.6 trillion or 32% of total assets.

PTBA's performance during the first semester of 2020 was quite affected by the Covid-19 pandemic which caused a decrease in energy consumption due to the imposition of lockdowns in several export destination countries such as China and India. Likewise with domestic conditions as the majority market for PTBA. The decline in electricity consumption in large areas of Indonesia such as DKI Jakarta, Banten, Java and Bali also had an impact on the absorption of domestic coal.

The price of coal which had continued to decline during this year was also a challenge for the company. Based on data from the Ministry of Energy and Mineral Resources (ESDM), the reference coal price (HBA) in the first half of 2020 had decreased by about 20% from US$65.93 per ton in January 2020 to US$52.98 per ton in the month of June 2020.

Efficiency Strategy

Efficiency was one of PTBA's strategies to maintain and record positive performance amidst price volatility and reduced demand for coal supply.

Some of the efficiency strategies that had been carried out by PTBA in the first half of 2020 were to continue to make efforts to reduce business costs and cost of production through the implementation of various mining cost optimizations such as cutting transport distances and reducing the stripping ratio.

Operational Performance

PTBA produced 12 million tons coal by June 2020 accompanied by the positive coal transportation performance. During the first semester of this year, coal transportation capacity was recorded at 11.7 million tons.

The company was able to maintain operational performance until the first semester of 2020 as a result of the continuous implementation of operational excellence and market expansion as the company's business strategy this year.

Target 2020

PTBA will make adjustments to coal production figures in 2020 after considering global market conditions amid the ongoing Covid-19 pandemic, from the initial target of 30.3 million tons to 25.1 million tons.

Development Project Progress

Coal Gasification

PTBA is committed to running and developing a coal downstream business, namely Coal to DME, together with strategic partners (Pertamina as the off-taker, and investors who own coal gasification technology), who have signed a cooperation agreement in 2019 and then in 2020 will continue to the stage of detailed engineering design for the preparation of Coal to Chemicals (DME) plant construction including preparation for pre-construction plant construction.

This plant, which will be developed in Tanjung Enim, South Sumatra province, is targeted to start commercial production in 2025 with coal consumption of around 6 million tons per year for a minimum of 20 years, to produce 1.4 million tons of DME per year. DME is a substitute for LPG, of which currently most is still imported.

Sumsel-8 Mine Mouth Power Plant (PLTU)

PLTU Sumsel-8 with a capacity of 2x620 MW is PTBA's strategic project with a value of US$1.68 billion. This PLTU is part of a 35,000 MW project and was built by PTBA by PT Huadian Bukit Asam Power (PT HBAP) as an Independent Power Producer (IPP). PT HBAP is a consortium between PTBA and China Huadian Hongkong Company Ltd.

The development progress of the PLTU project, which will require 5.4 million tons of coal in a year, has reached 50% of development achievement. The power plant is expected to be fully operational in the first quarter of 2022.

Solar Power Plant (PLTS) Soekarno-Hatta Airport with AP II

PTBA also synergizes with PT Angkasa Pura II (AP II) in building and operating a Solar Power Plant (PLTS) at Soekarno-Hatta Airport.

This PLTS, which is currently in trial phase and will be fully operational on October 1, 2020, has 720 solar panel systems with photovoltaics with a maximum capacity of 241 kilo watts per peak (kWp) and is installed in the Airport Operation Control Center (AOCC) Building. This PLTS was built and managed by PT Bukit Asam Tbk (PTBA) together with PT Surya Energi Indotama, a subsidiary of PT LEN Industri.

Collaborating with AP II, PTBA is ready build Solar Power Plants at other airports managed by AP II.

Coal Transportation Project

PTBA in collaboration with PT Kereta Api Indonesia is developing railway coal transportation projects with a capacity of 72 million tons/year by 2025, including new railways consisting of:

Tanjung Enim - North direction:

• Carrying capacity of 20 million tons/year, along with the new Kramasan port which is planned to be operational in 2024; In addition, a transport capacity of 7 million tons per year has been ready to operate at the Kertapati Port since the first quarter of 2020.

Tanjung Enim - South Direction:

• Tarahan 1, expansion of the existing railway capacity to 25 million tons/year by the end of 2020.

• Tarahan 2, with a carrying capacity of 20 million tons/year and is planned to operate in 2025.

Coal Transportation Capacity Development with Pelindo II

To achieve the goal of developing South Sumatra economic corridor as a national energy storehouse, PTBA has signed a Head of Agreement (HoA / Master Agreement) with PT Pelabuhan Indonesia II (Persero) to develop the transporting coal capacity and/or other commodities through rivers and ports in South Sumatra.