March 14, 2016

NEWS RELEASE www.jogmec.go.jp
Japan Oil, Gas & Metals National Corporation
Division in charge: Coal Exploration Division, Coal Development Department
Arai and Okumura TEL：+81-3-6758-8002 FAX: +81-3-6758-8086
PR in Charge: Public Relations Division
TEL:+81-3-6758-8106
FAX:+81-3-6758-8008

JOGMEC Launches the First Coal Joint Venture in Indonesia
for Supporting Exploration and Acquiring Coal Marketing Right
JOGMEC (President: Keisuke Kuroki) is pleased to announce that it entered into a new agreement
to jointly explore coal in the BOSS and PB Areas on March 10th, 2016 with PT Bangun Olah
Sarana Sukses (BOSS) and PT Pratama Bersama (PB), Indonesian coal companies.
Instead of acquiring equity, JOGMEC will acquire coal marketing right in this new JV scheme, andthis is the first JV for JOGMEC in Indonesia to secure a new supply source of thermal coal toJapan.
The BOSS/PB Project Areas are situated in the Kutai Sedimentary Basin, which is highly
prospective for thermal coal resources, in the middle basin of Mahakam River.
Coal supply to Japan relies on import from Indonesia by about 20% of total import amount. Thecountry is producing mainly thermal coal for power industry as well as for general industries, which
attracts Japanese companies.
However, investment environment in Indonesia for mining sector is not always favorable, due tosuch as chaotic situation of issuing mining licenses triggered by the decentralization of authority,
complex forms of the ownership of mining interests, and strengthening of the foreign sharedivestment rule and the domestic market obligation amid the upsurge of resource nationalism.
Therefore, acquiring marketing rights from coal producers are the mainstream measures forJapanese companies to participate in Indonesian projects.
JOGMEC has hence established a new JV scheme to acquire marketing right, in addition toconventional JV scheme to acquire equity, and entered into such new agreement with BOSS andPB.
This is the first JV for JOGMEC in Indonesia, and it is anticipated that acquiring marketing rightwould contribute to diversify the coal procurement measures by Japanese companies during thenatural resource price fall, which leads to reinforce Japan’s resources security.
■ Project Outline
1）Exploration area
The BOSS/PB Project is located about 150km west of Samarinda, a capital of East KalimantanProvince of Republic of Indonesia, in the Balikpapan Coal Bearing Formation of the Kutai
1

Sedimentary Basin and consists of 2 coal concessions (total about 53km2), each of them owned
by BOSS and PB respectively. Presence of high quality thermal coal seams has been confirmedby exploration to date, and open pit mining operation has been conducted in the BOSS Area
since 2013.
2）JOGMEC investment condition
JOGMEC has the right to acquire marketing right of 2 million tons of the coal produced from theconcessions by paying US$3 million of exploration expenditure in two years.
3）Exploration
Exploration had been done mainly in the BOSS Area which is currently operating. By confirming
the presence of the same coal seams in the PB Area which are extension of the known seams in
BOSS Area, open pit mining in the PB Area is also anticipated.
■ BOSS, PB and its parent company, PT Megah Pratama Resources (MPR)
MPR (Head Office: Jakarta) is a coal company owning 9 coal concessions (total 460km2) in themiddle basin of the Mahakam River. Other than coal business, the group runs property
development business as well.

Location of BOSS/PB Project2