PT.

BUMI RESOURCES, TBK

Sindikat 2

INDONESIA MACROECONOMICS

Indonesias economy in 2012 posted a considerably high growth of 6.2%, yet at a lower rate than the previous years growth of 6.5%.

INFLATION

EXCHANGE RATE

The average realized exchange rate as of 26 August 2013 stood at IDR 9,852 per US dollar and IDR 10,841 on the average spot market.

INDONESIA MACROECONOMIC OUTLOOK UPDATE

State Budget 2013

Realization per 31 July

Outlook

GDP Growth
annual percent change

6.3

5.9

5.9

GDP Growth (%) 2013 per Category: State Budget Draft 2013

Inflation
annual percent change

7.2

8.6

9.2

Exchange Rate
IDR/USD

9,600

9,852

10,200

Outlook

Treasury Bills Interest Rate 3-month, percent

5.0

4.2

5.0

Household Consumption Government Consumption Gross Fixed Capital Formation Export Import

5.0 6.7

5.1 3.4

Indonesian Crude Oil

USD $ per barrel Oil Lifting

108

105

105

840
thousand barrels per day

829

834

6.9 6.6 6.7

5.3 4.8 1.8

Natural Gas Lifting

barrel of oil equivalent/day

1,240

1204

1207

The outlook for economic growth in 2013 has been lowered from 6.3 percent in the 2013 State Budget to 5.9 percent. Of the seven macroeconomic assumptions of 2013, only the 3-month state treasury securities rate (SPN) has not been revised.

INDUSTRY ANALYSIS
Between 2000 and 2009 domestic investors with government of Indonesia support, gained majority ownership of Indonesia largest coal producers. During this same time period the coal industry was subjected to greater regulatory control by provincial and regency governments.
Estimates of Coal Reserves by Province, 2007

Province

Reserve Category (in Million Tonnes) Probable Proven Indicated 3,781 2,605 0 6,386 905 4,557 0 5,462 4,686 7,162 0 11,848

Sumatra Kalimantan Other Total

% of Total Reserves 40% 60% 0% 100%

% of Proven Reserves 17% 83% 0% 100%

Serious government misstep on regulatory matters, the outlook is for producers to embark upon a substantial expansion program over the next decade such as Bumi, Adaro, and Kideco. They will also be ramping up their production levels to capture the low rank (LR) coal market that will be created by PT Perusahaan Listrik Negaras (PLN) 1st fast track program, which is expected to add 10,000 MW of new coalfired capacity between 2011 and 2015 is real challenges for this sector. Base on mine Indonesia 10th annual review on 2008 (Indonesia coal mining association) trends in mining industry revenue increased by 27% in 2007 over 2006 and net profits increased by a massive 65%. This is even more significant considering that 2006 net profits were already 17% above the prior year. 2008 is a stark contrast, with the results for listed mining companies showing a decrease in revenues from 2007 of 3% and a much greater decrease in profitability of 33%, as costs have fallen at a lower rate than commodity prices. The coal miners however managed to show profit growth in both 2007 and 2008, given their annually negotiated sales prices were agreed in late 2007 and early 2008 in the high price environment. The main listed mining companies continued their strong performance in 2007 and until early July 2008 which was reflected in dramatic increases in market capitalisation. This increase was predominantly due to the runup in commodity prices, but also due to the listing of new comer, with an implied market capitalisation of US$ 1.6 billion

ISSUES OF INVESTMENT IN THE INDONESIAN MINING INDUSTRY

Some are: Conflict between mining operations and forestry regulations Duplication and contradictions between central and regional government regulations Need for inclusion in the new mining law of a mining agreement system similar to a contract of work system Lack of fairness in divestment of foreign interests and mine closures Taxation issues (tax incentives, VAT on gold and coal, corporate tax rate) Illegal mining Delay in finalisation of the new mining law Lack of coordination between new investment law and mining regulations

NEW MINE LAW (APPROVED ON EARLY 2009)

The new Law was an opportunity to address many of the issues noted above, which have hampered investment in the Indonesian mining sector for a number of years. Unfortunately, initial reactions to the new Law have not been overly positive, and there is a risk that, particularly in the current global economic climate, it will not provide the necessary impetus for investments in the large-scale long life projects, which are needed to strengthen Indonesias mining industry. Some challenges from this new Law are: Transitional provisions for existing Contracts of Work (CoW) what extent will the terms of existing Requirement for existing producing to conduct onshore processing of ore within 5 years of enactment of the new Law. Requirement for existing CoW holders to submit a mining activity plan for the entire contract area, within one year of enactment of the new Law, or face relinquishment of parts of the contract area. Lack of clarity in process for conversion of existing Kuasa Pertambangan (KPs or Mining Rights) to Izin Usaha Pertambangan (IUPs) under the new Law. Potential delays in issuing implementing regulations to regulate provisions of the new Law. Restrictions on IUP holders using affiliates to provide mining support services. Dealing with regional/local government officials to obtain IUPs. Restricted size of exploration and exploitation IUPs, which may hamper large-scale projects etc.

Company Profile PT. Bumi Resources, Tbk

PT Bumi Resources Tbk operates in the exploration and exploitation of coal deposits, including coal mining, and oil exploration activities. The Company offers its services to cement companies and power plants, as well as middle and large scale industrial companies that involve in chemical, mine, and textile businesses. Bumi Resources also has interest in mining gold, silver and copper. The Company went public through an Initial Public Offering in 1990, fully listing its shares on the Jakarta and Surabaya Stock Exchange. In 2008, After intense competitive bidding, BUMI acquired Herald Resources Ltd of Australia for Aus$ 552 million. This zinc, lead and gold operation is located in North Sumatera.

Company Profile PT. Bumi Resources, Tbk

2009, China Investment Corporation (CIC) invested US$ 1,9 billion in BUMI in the form of a debt-like instrument. The US$ 1,9 billion investment consists of US$ 600 million repayable in year four, US$ 600 million in year five, and remaining US$ 700 million in year six. The investment attracts a 12% annual cash coupon with a total IRR of 19%, the balance payable at the time of final maturities. The funds will be used for debt restructuring and capital expenditure. 2010, Additional capital injection through the issuance of Non Pre-Emptive shares approved in EGM on June 24, 2010.

Company Profile PT. Bumi Resources, Tbk

2011, Through resolution of the Annual GMS dated June 27, 2011 the Company distributed dividends to shareholders amounting to Rp 41.78 per share. The Company has made repayment of the Tranche A of US$ 600 million of the China Investment Corporation (CIC) debt, which would have matured on 30 September 2013: paid almost 2 (two) years earlier based upon mutual agreement. 2012, Through the Extraordinary General Meeting of Shareholders on 21 May, it was decided the change in composition of members of Board of Commissioners and Board of Directors of the Company.

Company Profile PT. Bumi Resources, Tbk Income Statement, USD

Company Profile PT. Bumi Resources, Tbk Cash Flow, USD

Company Profile PT. Bumi Resources, Tbk Growth Rate, USD

Company Profile PT. Bumi Resources, Tbk Balance Sheet, USD