Key features in Regulation 28/2009 that must be observed by the mining company and mining

services company are among others:

(i) Regulation 28/2009 requires the mining service company must hold mining service
business license (Izin Usaha Jasa Pertambangan or “IUJP”) from the Minister, the
governors, or the regents/mayors within their authority. The mining services that can
be rendered by a mining service company are limited to those as stated in the IUJP
and within its allowed jurisdiction;

(ii) Article 4 of Regulation 28/2009 stipulates that in the field of ‘Mine’ (Penambangan),
a mining service company can only provide consultancy (konsultasi), planning
(perencanaan) and equipment testing (pengujian peralatan) services and not the
operation/implementation (pelaksanaan). Article 10 of Regulation 28/2009 further
requires the mining company to perform by itself the mine activities, processing and
refinery/smelting. A mining company however may refer some mining activities to
mining service company limited to the (i) stripping of overburden and (ii) hauling of
coal;

(iii) Article 7 of Regulation 28/2009 stipulates that mining company is not allowed to
collect fees from works performed by mining services company;

(iv) Article 5 of Regulation 28/2009 stipulates that mining company may engage mining
services upon its working plans obtaining approval from the Minister, the governors
or the districts/mayors within their authority.

As of the coming into effect of Regulation of the Minister of Energy and Mineral Resources No. 17 of
2010 on the Procedure to Stipulate Mineral and Coal Sales Benchmark Price dated 23 September 2010
(“Regulation 17/2010”):

1. Mining companies must conform to the provisions in Regulation 17/2010 in selling

their minerals or coals.

2. ‘Spot’ sales contracts (less than 12 (twelve) months period) already signed by
mining companies based on the provisions of laws and regulations prior to the
stipulation of Regulation 17/2010 must be conformed to the provisions thereof
within 6 (six) months, i.e. 23 March 2011.

3. ‘Term’ sales contracts (more than 12 (twelve) months period) already signed by
mining companies based on the provisions of laws and regulations prior to the
stipulation of Regulation 17/2010 must be conformed to the provisions herein
within 12 (twelve) months, i.e. 23 September 2011.

In general pursuant to Regulation 17/2010, coal sales may be performed as ‘spot’ and/or ‘term’ sales
based on price agreement between coal mining companies and coal purchasers with the following
provisions:

a. Coal price in “spot” sales must refer to coal benchmark price as at the month of
coal delivery; or
b. Coal price in “term” sales must refer to average coal benchmark price of the last 3
(three) months in which coal price agreement occurs.
Further, the agreed coal sales price must be submitted to the Minister of Energy and Mineral Resources
through Director General in the field of mineral and coal mining prior to being stipulated in sales
contract. Practically, the Directorate General of Mineral, Coal and Geothermal regularly issue circular
publishing a monthly coal price reference/benchmark (Harga Batubara Acuan or HBA) to be used by coal
producers to price for all future coal sales.

Based on the Government Regulation No. 78 of 2010 regarding Reclamation and Post Mining
(“Regulation 78/2010”), the holder of Coal Contract of Work which has not provided the post mining
guarantee (Note: the Mining Law and Regulation 78/2010 have changed the term of “mining closure” to
be “post mining") in accordance with the Regulation 78/2010 shall be required to provide post mining
guarantee at the latest 3 (three) months after the Regulation 78/2010 comes into force.