PT. Indoferro

Brian Chan, Sales and Marketing Director

The Indonesian NPI Market

DISCLAIMER

1

The materials used herein and this presentation (collectively, the “Presentation”) have been prepared by Indoferro business development team, solely for use at the

presentation to be made on Sep 2015. By viewing the Presentation, or by reading the materials used at the Presentation, you agree to be bound by the following

limitations:

• The Presentation is strictly confidential and may not be copied, published, distributed or transmitted or disclosed by recipients to third parties without consent from PT.

Indoferro.

• The Presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or

an inducement to enter into any investment activity, nor shall any part or all of the Presentation form the basis of, or be relied on in connection with, any contract or

investment decision in relation to any securities.

• The Presentation is being provided by the Company for informational purposes only and has not been independently verified. Neither the Company nor any of their

respective affiliates makes any representation or warranty, express or implied, as to the fairness, accuracy, correctness or completeness of the information in the

Presentation, and nothing in the Presentation is (or shall be relied upon as) a promise or representation by the Placing Agent or any of its affiliates. The Company and

its affiliates shall have no liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of the Presentation or otherwise arising in

connection with the Presentation.

• The Presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed

in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the

actual results, financial condition, performance, or achievements of the Company or industry results, to differ materially from the results, financial condition,

performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, viewers of the Presentation

are cautioned not to place undue reliance on these forward-looking statements. The Company and its respective affiliates disclaim any obligation to update these

forward-looking statements to reflect future events or developments.

• The Presentation does not constitute a recommendation regarding the securities of the Company. By attending this presentation you acknowledge that you will be

solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely

responsible for forming your own view of the potential future performance of the business of the Company.

• Nothing in the Presentation constitutes an offer of securities for sale in the United States or any other jurisdiction, nor does it constitute an invitation by or on behalf of

the Company, any of its affiliates to subscribe for, purchase or sell any securities. Any decision to purchase or subscribe for securities in the possible offering must be

made solely on the basis of the publicly available information about the Company at the time of such offering (the “Public Information”). Any securities to be issued will

not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold: (i) in the United States, unless registered

under the Securities Act or pursuant to an exemption from such registration; or (ii) in any other jurisdiction outside the United States, unless in compliance with all

applicable laws and regulations in that jurisdiction.

•You agree to refer to the Public Information for more complete information about the offering. You should consider the Public Information

before making any investment decision.

TABLE OF CONTENT

2

1. Company Introduction

2. PT. Indoferro Current NPI Production

3. Current NPI Market

4. PT. Indoferro Phase II

5. Upcoming Projects in Indonesia

6. Repercussions on the Philippines

3

COMPANY INTRODUCTION

GROWTH STEEL GROUP - PT INDOFERRO

4

PT Indoferro is a part of

Growth Steel Group,

Which is one of Indonesia’s

Distinguished Business

Group that mainly exposed

As steel and iron

Manufacturer, established

In 1969, Medan, North

Sumatera

PT IndoferroPT Growth SumatraIndustry

PT Growth Asia

Biomass Power Plant

Construction

Steel producer

(deformed bars)

Steel Foundry

Metallurgical

coke producer

PT Indocoke

Nickel Pig Iron

LOCATION

5

• Located on Industrial Zone at Cilegon, Banten with two port facility:

Merak & Ciwandan port

• Raw material resources available from Kalimantan and Sulawasi region

• Available infrastructure : electricity, water & gas utilities

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PHASE 1 – MID GRADE NPI

BLAST FURNACE

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Product : Nickel Pig Iron

Capacity: 450 m3

Ni Content: 6 – 7 %

Operational since October

2012 producing Mid grade

NPI.

The first blast furnace in the

country

COKING OVEN

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Product: Coke

Capacity: 400,000 MT

Heat recovery stem charging

coke oven, which is also the

first

coke oven in Indonesia

SINTERING PLANT

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Product: Sintered Nickel Ore

Surface Area: 60 m2

Capacity: 700,000 MT

Sintering plant agglomerate

nickel ore fines with other

fine materials at high

temperature, to create an

Intermediate product that

can be used in blast furnace

FLOW OF PROCESSES

1

0

Diagram 1. Nickel Pig Iron Blast Furnace Process, PT Indoferro

PRODUCT SPECIFICATION

1

1

Element Guaranteed (%)

Ni 6.31- 6.50%

Cr > 2.5%

C < 5.5%

Si < 5%

Mn < 1.5%

P < 0.1%

S < 0.30%

Cu < 0.10%

Pb < 0.05%

Fe by diff

Product Name : Nickel Pig Iron

Product Code : IFN 64

Dimension : 230 x 160 x 50 mm

Weight : 8.5 kg/piece

Origin : Indonesia

Packing : Bulk /Loose in 20 ft Cont

SALES REGION

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1.India 2.Taiwan 3.China 4.Europe 5.North America 6. South Africa

• PT. Indoferro has spent the last three years paving

the way for increase usage of NPI outside of China.

• Market Resistance

•Technical assessment

• Internal inertia

• What has helped us?

•Depressed market price.

• Future for up coming NPI producers?

•A gradual shifting a production capacity moving to

Indonesia.

13

NPI MARKETING EX-CHINA

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PHASE 2 – HIGH GRADE NPI

ELECTRIC FURNACE SMELTER

1

5

16

NICKEL PROJECTS IN INDONESIA

1

7

Source: ESDM March 2015

No Company Name Input Capacity % Total progress Estimated Completion Date

1 PT. Jilin Metal Indonesia (Billy Group) 390,000 NPI 45,000 29% 2016

2 PT.Bososi Pratama 288,889 Sponge Ni 52,000 28% 2016

3 Aquila Sponge Nikel (Solway Group) 1,256,173 FeNi 81,400 26% 2017

4 Ang and Fang Brothers 210,000 NPI 21,000 24% Q3-2016

5 PT. Stargate Pacific Resources -  NPI 650,000 23% Q3-2016

6 PT. Cinta Jaya 61,667 NPI (4-6 %) 18,500 16% 2016

Trimegah bangun persada

Gane Permai Sentosa

PT. Kemakmuran Pertiwi Tambang

8 PT. Nusajaya Persadatama Mandiri 133,333 NPI (6-10%) 36,000 14% Q4-2016

9 PT. Sambas Mineral Mining 180,000 NPI 12,000 12% Q4-2015

10 PT First Pasific Mining 2,000,000 FeNi 200,000 11% Q4-2016

Riota Jaya Lestari

Sriwijaya Raya

PT Genba Multi Mineral)

PT. Hengjaya mineralindo

13 COR Industri Indonesia 1,600,000 NPI 320,000 8% 2017

14 PT. Putra Mekongga Sejahtera 75,000 NPI 15,000 8% Q2-2016

15 Bola Dunia Mandiri 100,000 FeNi (8-10% Ni) 20,000 7% 2017

16 PT. Surya Saga Utama 50,000 NPI 10,000 6% 2017

17 PT. Antam Mitra Haltim 600,000 NPI 70,000 5% Q4 - 2016

Total Kapasitas Input 8,795,062 1,910,900

12 900,000 NPI 180,000 9% 2017

Q3-2016

11 450,000 NPI (10%Ni) 80,000 11% 2017

Product (tpy)

7 500,000 FeNi 100,000 15%

UPCOMING PROJECTS (PROGRESS <30%)

No Company Name Input Capacity % Total progress Estimated Completion Date

1 Cahaya Modern 48,000 NPI 8,640 100% Q1-2014

2 Indoferro 1,500,000 NPI 250,000 100% 2014

3 Antam Pomala (Ekpansi) 800,000 FeNi 10,000 80% Q4-2015

Bintang Delapan Mineral

Bintang Delapan Energi

5 Gebe Industri Nikel 300,000 Ni (99%Ni) 6,000 80% Q2-2015

6 Integra Mining Nusantara 108,000 NPI (5-10% Ni) 21,000 71% Q4-2015

7 PT. Macika Mada Madana 290,000 FeNi (10% Ni) 53,000 62% Q2-2015

Fajar Bhakti Lintas Nusantara

Gebe Sentra Nikel

9 PT Karyatama Konawe Utara 250,000 NPI (8-10%Ni) 50,000 49% Q3-2015

10 Bhineka Sekarsa Adidaya 1,500,000 NPI 300,000 46% 2017

11 PT. Cipta Djaya Surya 3,800,000 NPI 700,000 38% 2017 

12 Pernick Sultra, PT 360,000 NPI (15-25% Ni) 3,600 38% 2017

Elit Kharisma Utama

Konawe Nikel Nusantara

14 Kembar Emas Sultra 280,000 NPI (14-16% Ni) 35,000 35% 2017

15 PT. Bima Cakra Perkasa Mineralindo 3,500,000 NPI (6-7%) 370,000 33% 2020

16 PT. PAM METALINDO 2,400,000 FeNi (10%) 165,000 31% Q2-2016

Wanatiara Persada (Multi Baja Industri)

Rimba Kurnia Alam

18 Aneka Tambang - FeNi Haltim 2,500,000 FeNi 40,000 30% Q4-2016

Total Kapasitas Input 20,581,000 2,529,740

17 800,000 FeNi (10-16% Ni) 110,000 40% Q2-2018

13 45,000 NPI (10% Ni) 7,500 35% 2017

15-Apr

8 500,000 NPI (10-16%Ni) 100,000 66% 15-Aug

Product (tpy)

4 1,600,000 NPI (10-15% Ni) 300,000 98%

18

Source: ESDM March 2015

UPCOMING PROJECTS (PROGRESS >30%)

ESTIMATED TOTAL OUTPUT

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9

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Me

tric

To

n

TOTAL OUTPUT PER YEAR ( TPY ) PROGRESS > 30 %

Nickel Output

• 2016 ~ 113,000 MT

• 2017 ~ 173,750 MT

20

Source: ISEA Oct 2015

LATEST PROGRESS

1. PT. Fajar Bhakti Lintas Nusantara

2. PT. Karyatama Konawe Utara

3. PT. Macika Mineral Industri

4. PT. Bintang Smelter Indonesia*

5. PT. Antam (Persero) TBK

6. PT. Century Metalindo*

7. PT. Bintang Timur Steel*

8. PT. Cahaya Modern Metal Industri

9. PT. Gebe Industry Nickel

10.PT. Sulawesi Mining Investment

11.PT. Huadi Nikel Alloy Indonesia*

12.PT. Titan Mineral*

13.PT. Indoferro

Out of 8 - Estimated: 154,940MT Ni

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REPERCUSSIONS ON THE PHILIPPINES

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NICKEL ORE EXPORT TO CHINA

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Total Quantity Philippines Indonesia

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REPERCUSSIONS ON THE PHILIPPINES

• Short Term• If price fails to improve, Philippine ore prices continue to be pressured by the

increasing production cost in China.

• With improvement to nickel price in 2016, we expect Philippines ore to gain

some healthier margin compared to the Indonesian ore.

• Medium Term• New equilibrium will be formed, but Philippines’ nickel ore price will continue

to be higher than Indonesian’s with higher processing cost in Indonesia.

• NPI from Indonesia as well as Philippines’ ore will fill what was previously all

NPI nickel units produced within China.

• Long Term• Philippines’ Government Action?

• Indonesian Nickel Production

CONCLUSION

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• PT. Indoferro will commission its second phase project by mid

2016, adding a 12,000MT to existing capacity.

• According to the ESDM, a total of 43 projects will have

commenced in Indonesia form 2014-2017.

• 2016 ~ 113,000MT

• 2017 ~ 173,750MT

• OR 154,940MT

• A gradual shift of nickel capacity from China to Indonesia.

• LME Nickel to improve in 2016.

• A new equilibrium will be reached for Philippines’ laterite ore,

where it will benchmark against Indonesian NPI prices and

vice versa.

QUESTIONS FOR DISCUSSION

30

• What’s going to happen to China when

Philippines scale back its ore production?

• Does it make sense to build processing

plant in Philippines, or is it better to build

in Indonesia, given the higher ore grades

and larger deposits?

• How about the Japanese Nickel Industry?

31

THANK YOU FOR YOUR ATTENTIONbchan@indoferro.com

www.indoferro.com