In preparing this presentation, we did not take into account the investment objectives, financial situation and particular needs of the reader. Before making an investment decision on the basis of this research, the reader needs to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs, objectives and financial circumstances

OUTLINE OF PRESENTATION

PHILIPPINESAND

INDONESIA

COMMODITYSNAPSHOT

NICKEL

OVERVIEW

GLOBALPERSPECTIVE

THE BAN OUTLOOK

overview

Indonesia is blessed with a diverse mineral resource base. Comparedwith other countries of Asia from Kazakhstan to the Philippines,Indonesia is a leader in copper, gold, silver, nickel, tin and coalproduction.

Challenges for the Indonesian domestic mining sector include theshortage of capital, and reluctance to accept high risk investment.

Therefore, major mining developments in Indonesia have largelydepended on foreign investment.

The geology of the country remains very attractive for future explorationactivities.

SULAWESI MALUKU

Source: esdm Sukhyar 2014

From being the best-performing base metal in the previous decade, nickel has been one ofthe worst performing this decade

Nickel went from best to worst almost entirely due to massive growth in Chinese nickel pigiron production, fuelled by imports of nickel ore from Indonesia

The recovery in prices was delayed by an overhang of Indonesian ore stocks and higher oreexports from the Philippines

Source: Macquarie Research, J.Lennon October 2015

NICKEL

Source. Ministry for energy and mineral resources,

Indonesia exports

2014 World Nickel ProducersNickel Producers (in Mt)

1 Philippines 440,000 22 %

2 Rusia 260,000 13

3 Indonesia 240,000 12

4 Canada 233,000 12

5 Australia 220,000 11

6 New Caledonia 165,000 8

7 Brazil 126,000 6

8 Other 333,500 16

Total 2,017,500

Nickel Producers Philippines

Rusia

Indonesia

Canada

Australia

New Caledonia

Brazil

Other

SOURCE: Statista 2015

After the ban January 12, 2014

Nickel Thermometer

Production cuts have begun, responding to ballooning Metal Inventories andaggressive stainless steel destocking, Delivering some price stabilty. Re-arrangement of stainless steel producers creates upside price risk.

Bearish Neutral Bullish

Performance tables

October 09 .2015

latest 10/2 – 10/9 MTD QTD YTD

Nickel

(LME cash)

10,710 7.9 6.4 6.4 -28.3%

The Ban and its Impact

From January 12, 2014 the Indonesian government ban the export of unprocessednickel products (Ni content <4%). Banned in line with the 2009 Indonesian MiningLaw (UU No. 4 tahun 2009)

Currently there is no sign or any changes in the policies. The new governmentunder the current President Jokowi has not given any initiative or any sign tochange the existing mining policy.

The Indonesian supply flood from 2011 to 2014 has been stop with the ban.Chinese NPI (nickel pig iron) was a low–capex/high opex solution to meetingdemand growth in China; however, China has a limited mine reserves of nickel soit is highly reliant on raw material import, especially from Indonesia. There is nosubstitute for Indonesian ore.

The Indonesian mineral market suffered heavily from the ban. But it is a newchallenge for the country, the ore is still there. The heavily exploitation nonrenewable resources have not brought Indonesia to more prosperity. World widethe natural resources (mineral) is depleting, also nickel.

Indonesia paid a very high price, allot of lay off, many companies shut downbankruptcies' unavoidable. The government and its policies is not well prepared,also from the stakeholders. 5 years is not enough, speaking without any incentivesfor the transition into the value added industry.

We are now facing a large structural changes and a transition to new industrial era.We are facing new challenges. It is a hard school, is a lesson and no point ofreturn. It needs courage.

The Government placed the National Development Foundation

to Increase the Productivity, Competiveness and the Peoples Wealth

The FundamentalEconomy Transformation

Consumptive Productive

Productivity CompetivenessWealth of

Nation

The agenda is to lift the economy, buildinfrastructure, reduce inequality, improvingspending, cut corruption, bureaucracy reformand more bureaucracy efficiency.

The ban brought nickel market into a large structural change. The impact on the market isdelayed by large stocks of nickel ore in China and elsewhere of around 250-300kt nickeland of course large refined stocks on LME and in China. The export ban removes up to450kt of ferronickel/nickel pig iron production from the market, that is equal to 25% of 2013global nickel use – and there are limited substitutes for this nickel Indonesia seems to bethe preference for Chinese investors mainly because of a bigger and higher grade of nickelresources this is to secure their market demand. China imported nearly 70% of nickel orefrom abroad.

Indonesia is now a NPI producer and exporter, albeit small for now. In April, China’sTsingshan Holdings began shipping Indonesian made NPI to China. Combined with twoother small producers, the country is forecast to produce 22kt this year, 31kt in 2016. (vs.500kt at China’s NPI output peak)

A unit of China steel producer Tsingshan Bintang Delapan Group is set to triple its capacityto produce nickel pig iron in Indonesia as soon as May next year, with an installed capacityof 900,000 tonnes of nickel pig iron.

The plant has been operating at 60-70 percent of its current capacity of 300,000 tonnes.The firm is developing three smelters at the site, which once completed will have acombined annual output capacity of 1.2 million tonnes of nickel pig iron, containing 120,000tonnes of nickel. The group expects all three smelters to be completed by June 2017.

Chinese stainless steel mills often feed nickel pig iron into furnaces to strengthen theirproduct as a cheaper alternative to refined nickel .

Source: Thomson Reuters

PHILIPPINES AND INDONESIA

Source: Baosteel

CHINA NICKEL ORE SOURCING

Source: B.P Romualdez October 2015

China Nickel Pig Iron production and imports of nickel ore and concentrates

tonnes

Source: B.P Romualdez October 2015

COMMODITY SNAPSHOT NICKEL By courtesy of: INSG, Bloomberg, Reuter, Morgan Stanley Commodity Research

Source: Morgan Stanley

1Q15 14,391 2 13,0433 10,5934 11,905e 12,483

1Q16e 12,7872 13,6693 14,3304 14,330e 13,779

2017e 14,9912018e 15,4322019e 16,535

LT 18,806

Price Forecasts US$MT(Average period price)

Given nickel’s large price fall, and that 70% of all primary nickel is shipped to steelproducers, a widely held assumption is that stainless steel demand has collapsed. Infact monthly/quarterly reported stainless steel production rates, estimatedconsumption by region, and key global trade flows, have weakened a low but stillpositive y-o-y growth rate, rather then reporting a collapse. Nickel’s price fall reflectsstainless steel mill destocking. Any short term reversal of this trade Behaviour wouldlikely deliver a bounce for the nickel market. Demand for nickel cannot be studied byusing stainless as a proxy for total demand: other applications for nickel havedifferent industry drivers and rely on different feedstock than stainless steel.

Nickel prices have retraced from the peak following the introduction of Indonesia’sexports ban. The anticipated undersupply did not materialise as increasing exportsfrom the Philippines, combined with growth slowdowns and tighter environmentalcontrols in China to put downward pressure on prices.

However, a depletion of higher quality ore stocks means the increased reliance onlower grade ore (largely sourced from the Philippines) will soon reach its limits –lower-grade material needs to be blended with high-grade ore in nickel pig ironproduction. Greater scarcity should see ore prices start to lift, weighing on NPIproduction – forcing steel producers to find new nickel supply. The timing of whenhigh-grade ore will be depleted is difficult to pick, but is expected to take place inthe first half of the next year.

Many questions surrounding the future

Who are investing, where and how serious is the investments undertaking

How to overcome constraint on infrastructurelike electricity, water, road, technology, skill and manpower

Are the nickel prices good enough to maintain incentives for mine production investment and expansion

How commit & consistence is the central and local government on the domestic obligation in mineral processing

How is the community excepting the mines and processing activitiesFiscal incentive , friendly investment climate and Political stability

Last but not least the world economy and China

The continuing interest of investors in mining must befurther stimulated by the Government to sustain mining inthe long term.

Smelter is a Capital Goods, Government to consider Fiscal Incentives lowering down the Capital Expenditure (i.e. Tax Holiday, Duty Exemption)

Who we are:A Non Profit OrganizationA Non Governmental Organization

Our Motto:“Together Everyone Achieves More”

Our short term task:More conducive and more friendlier policies

Thank you for your kind attention !

Mag. Faisal Emzitaeffie.emzita@yahoo.deMobile: +6282110270050

OFFICE: PATRA JASA OFFICE TOWER SUITE 1111JL. JEND. GATOT SOEBROTO KAV 32-34, JAKARTA SELATAN 12950 Phone: +6221 5290 0255 FAX: +6221 5290 0256 e-mail: asosiasi.nikel@gmail.com website: www.ani.or.id