Coal Specification

According to the International Energy Agency (IEA), the term 'hard coal' is comprised of bituminous coal and anthracite and is equivalent to higher-rank coal. This includes all non-agglomerating coal with a gross calorific value greater than 5,700 kcal/kg on an ash-free GAD basis and greater than 5,400 kcal/kg (GAR). Based on its end-use, hard coal can be divided into two categories: steam coal (thermal coal) or coking coal (metallurgical coal). Thermal coal is mainly used for steam-raising in the generation of electricity. Other purposes include direct heating, space and water heating, process heating and cement manufacturing.

The characteristics of the coal at each of the contract areas as marketed to customers (including blended coal) are set forth in the following table (adb %, unless otherwise specified.

Indicetive Coal Specifications MSJ SB TBH
Total Moisture ±17 ±18 ±19
Inheret Moisture ±11 ±12 ±16
Ash Content <9 4-8 4-8
Volatile Matter 38-42 39-41 38-40
Fixed Carbon 40-42 40-42 39-41
Calorific Value (adb kcal/kg) 5,800-6,400 5,800-6,400 5,800-5,800
Total Sulfur <1.0 <1.0 0.3-1.0
Handgrove Grindability Index ±45 ±45 ±45
Ash Fusion Temperature (Reduced Atmosphere)
Initial Deformation Over 1,250°C Over 1,250°C Over 1,250°C
Hemisphere Over 1,250°C Over 1,250°C Over 1,250°C
Flow Over 1,250°C Over 1,250°C Over 1,250°C

Source: The Company

The Company implements quality control from the exploration stage through the mining, hauling, crushing and loading stages of coal production to help ensure customers receive coal products that comply with contracted specifications. MSJ was awarded the ISO 9001 quality assurance award by SGS United Kingdom Ltd in 2008 and renewed latest in 2014. In addition, coal is analyzed by the Company's laboratories located in each contract area and at the stockpiling and barge loading facilities to ensure coal is in accordance with contracted specifications and free of impurities. The laboratories also conduct proximate analysis, total moisture, total sulfur, calorific value, ash content and relative density tests. All of the Company's laboratories follow ISO/ASTM standards. In addition, quality control is supervised by Sucofindo and Geoservices, with Sucofindo operating an onsite coal facility laboratory. The Company's coal supply contracts typically include coal specification targets.