With an expression of gratitude to God the Almighty, on behalf of the Board of Directors, I am pleased to report that the Company closed the year 2010 with encouraging operating results. External challenges facing us during the year came from keener competition in the domestic market, higher demand for low-calorie coal at lower selling price, and rising fuel and electricity cost. Opportunities arising from global and national economic revival lay in the increased usage of alternative energy sources including coal in the Asia Pasific region as well as in the domestic market.
The company responded well to this higher coal demand by stepping up production by 7.4% to 12.46 million tons from 11.60% million tons the year before. Likewise, sales volume increased 3.7% from 12.48 million tons to 12.95 million tons. This growth was the result of the Company's collaboration with PT Kereta Api Indonesia that improved railway loading capacity by 3.0% in 2010.
The Company has taken necessary steps through efficiency program to cut operating expenses in anticipation of future business opportunities.
These programs were consistently communicated to the stakeholders so our corporate image remained good. Stock market positive reaction as a reflection of stakeholders' appreciation was the 33% increase in PTBA share price that closed at Rp22,950 by end 2010 with intensive trading.
Facing challenges and opportunities in 2010, the Company devised two major strategies, i.e. improving efficiency and realizing development plan in anticipation of larger production in the near future.
The Company enhanced operating efficiency by improving work system, facilities and infrastructure, as well as repairing and replacing mining machinery.
The Company began to realize various business development projects which were incorporated in five strategic plans. In 2010 one of the five plans was nearing completion, i.e. the construction of the Company's own mine mouth 3 x 10 MW TPP in Tanjung Enim, which by the end of 2010 was 85% completed and expected to commence operation in 2010.
As planned, we will soon operate two BWE systems and one spreader, operated by electricity, that have recently been relocated from TAL site.
We are also confident we will finalize building other smaller TPP for our own use.
Another business development that can be carried out is developing Coal Bed Methane (CBM) as business diversification.
The Company continued to increase loading capacity through three strategic plans. The first plan was to increase the existing railway loading capacity jointly with PT KAI. The second plan was to construct new railway tracks by establishing a joint venture company. The third plan was to venture into a joint project with Adani Group, India.
If the three scenarios of coal transport can proceed as planned, the Company will be in a position to sell its coal products by railway up to 82 million tons per year.
Realizing the other two strategic plans, i.e. acquisition of or joint operation with other coal mining companies will extend operating area and increase reserves while developing sea transport cautiously and prudently. This way, in the forthcoming years the Company will become the largest coal mining in Indonesia.
On the human resource development side, the Company continuously enhances human resources competence and provides performance-based career development program. We use Key Performance Indicators (KPI) and Balanced Scorecards to measure individual and work unit competence and performance.
In 2010 the Company socialized and implemented GCG Code and Code of Conduct that had been reviewed and rewritten.
Intensive training sessions were carried out to instil into the employees the importance of GCG. Additionally, employees signed declaration of compliance with GCG Code and Code of Conduct.
The Company's concern for the neighboring communoty well-being is reflected in the promotion of the community potentials to grow along woth thw Company. In fulfilling its CSR function, the Company establishes long term commitments, focusing on six areas: (i) economy, (ii) environment, (iii) human rights, (iv) employment practices and proper work conditions, (v) product responsibility and (vi) society.
On the economic side, the program implemented includes developing partnership with small business and cooperatives.
The Company has contributed to social welfare through natural disaster relief, education and training, healthcare, construction of public utilities and religious utilities, as well as enviromental conservation. Total fund disbursed by the Company to Partnership and Community Development Program in 2010 reached Rp93.42 billion, or rose 236% from Rp27.77 billion in 2009.
This commitment was turned into reality by a series of rehabilitation program towards post-mining area designed jointly with an independent consultant using ISO 14001: 2004 accredited system. The Company even took a step further and became a pioneer in conserving the environment and rehabilitating post-mining areas by designing 5,934 hectares of post-mining area to become People's Forest Park (Tahura).
Real accomplishment in 2010 was the retention of Green Proper rating as designated by the Department of Environment. The Company is determined to earn Gold Proper in the upcoming years.
As an enterprise that has a vision of becoming the largest integrated coal miner in Indonesia, the Company is on a better footing to seize the opportunity for meeting the rising demand, considering the abundant reserves it has in hand. We are confident that through an intergrated business development strategy, competent human capital and better GCG implementation, the Company will be in position to avail itself of every opportunity that unfurls.
