Vallar PLC (“Vallar” or the “Company”) Interim Management Statement and Production Report for Q1 2011 and Transaction Update

Vallar PLC (“Vallar” or the “Company”)

28 April 2011
For Immediate Release

Interim Management Statement and Production Report for Q1 2011 and Transaction Update

Vallar today issues its Interim Management Statement for the period from 1 January 2011 to the current date and its Production Report for the first quarter ended 31 March 2011 together with a Transaction Update.

Highlights for the 3 months ended 31 March 2011
• Vallar owns a 75 per cent stake in subsidiary PT Berau Coal Energy Tbk (“Berau”) and a 25 per cent stake in associate PT Bumi Resources Tbk (“Bumi”)
• Berau sales for the first quarter of 2011 increased 53 per cent as compared with the first quarter of 2010
• As a result of strong global coal prices, Berau, KPC and Arutmin sales (on an attributable proportional basis) for the first quarter 2011, increased 37 per cent as compared with the first quarter of 2010

Production update
• Berau is a holding company that owns 90 per cent of PT Berau Coal (“Berau Coal”). In the first quarter of 2011 Berau Coal produced 4.1 million tonnes of coal, an increase of 9 per cent from the first quarter of 2010. Overburden removal was up 33.3 per cent on the first quarter of 2010.
• Bumi is a holding company that owns 65 per cent of PT Kaltim Prima Coal (Indonesia) (“KPC”) and 70 per cent of PT Arutmin Indonesia (“Arutmin”).
• In the first quarter of 2011 KPC produced 8.2 million tonnes of coal, a decrease of 9.2 per cent from the first quarter of 2010. Overburden removal was up 1.0 per cent on the first quarter of 2010, but production and overburden volumes were below plan due to higher than anticipated rainfall.
• In the first quarter of 2011 Arutmin produced 6.0 million tonnes of coal, a small decrease of 0.5 per cent from the first quarter of 2010. Overburden removal was up 37 per cent on the first quarter of 2010, but production was marginally below plan due to higher than anticipated rainfall.

Development and Expansion
• PT Bumi Resources Minerals Tbk (“BRM”) continues to work to develop its properties in Indonesia and West Africa as outlined in its initial public offering in 2010.
• Berau Coal expansion plan to achieve 30 million tonnes annual production in 2014 is on schedule.
• KPC expansion plan to achieve 70 million tonnes annual production in 2014 is on schedule.
• Arutmin’s plan to achieve a total production of approximately 23.0 million tonnes in 2011 is on schedule, and is currently evaluating tenders for further expansion in production capacity.

Outlook for the Full Year 2011
• Increase in production expected in 2011:
o Berau Coal is currently expecting to produce 20.4 million tonnes in 2011 (compared with 17.4 million tonnes in 2010).
o KPC and Arutmin are currently expecting to produce 66.0 million tonnes
(compared with 60.4 million tonnes in 2010).
• Realised prices for the full year are expected to be ahead of those achieved in 2010:
o Berau Coal has achieved an average selling price per tonne in the first quarter of $74.3 (compared with an average selling price per tonne of $56.4 in the first quarter of 2010)
o KPC has achieved an average selling price per tonne in the first quarter of
$92.8 (compared with an average selling price per tonne of $65.4 in the first
quarter of 2010)
o Arutmin has achieved an average selling price per tonne in the first quarter of
$77.1 (compared with an average selling price per tonne of $58.6 in the first
quarter of 2010)

Vallar is expecting to announce its half-yearly results for the period from 1 January to 30 June 2010 on 17 August 2011.

Transaction update
On 24 February, Vallar published a prospectus in connection with the previously announced acquisition of a 75 per cent holding in PT Berau Coal Energy Tbk (“Berau”) and a 25 per cent holding PT Bumi Resources Tbk (“Bumi”).

On 4 March Vallar announced the closing of the Bumi transaction and the assumption of control of Berau and on 8 April we announced the closing of the Berau transaction.

On 10 March 2011, Vallar posted a circular to its shareholders in connection with a scheme of arrangement of the Company (the “Scheme”) for the purpose of introducing a new UK-incorporated company, Bumi plc, as the parent company of the Vallar group. The Scheme was approved by Vallar shareholders on 7 April 2011.

Before the Scheme can become effective, Bumi plc must publish a prospectus (the “Prospectus”) in connection with the admission of its voting ordinary share capital to the premium listing segment of the Official List of the Financial Services Authority and to trading on London Stock Exchange plc’s main market for listed securities (“Admission”).


The Prospectus was expected to be published on or around 28 April 2011 with the Scheme becoming effective and Admission occurring on 10 May 2011. In the course of the ongoing IFRS accounting work being undertaken by Vallar in connection with the preparation of the Prospectus, a review is being undertaken of the accounting treatment of exploration and development costs incurred in 2007 and 2008 in relation to assets now owned by BRM. This review is ongoing.

Vallar does not consider that the resolution of this matter is likely to have any bearing on the commercial value attributed to the assets and is confident about the development potential of those assets. In accordance with ndonesian reporting obligations, BRM and Bumi published their audited financial results for the year ended 31 December 2010 (with comparative figures for the year ended 31 December 2009) on 31 March 2011. This financial information has been prepared in accordance with the generally accepted accounting principles in Indonesia.

In light of the above, Vallar has decided to delay publication of the Prospectus and, accordingly, the effective date for the Scheme. As a result, the court hearing to sanction the Scheme and to confirm the Company’s reduction of capital will not now take place on 6 May 2011 and is expected to be rescheduled for a later date. A further announcement will be made in due course.

Commenting on the announcement, Indra Bakrie, Chairman of Vallar said:
"Despite higher than anticipated rainfall in the first quarter, we remain confident on the trading outlook for the rest of the year. Average selling prices remain high relative to 2010, and we expect operating profit margins to increase year on year, despite higher fuel costs. We have made significant progress in integrating our activities under Vallar, and look forward to working towards a Premium Listing in due course."

Nat Rothschild, Co-Chairman of Vallar added:
“It remains our intention to greatly increase transparency and levels of governance across the group. With these encouraging results, we are more than ever convinced of the value and potential of Bumi and Berau.”