Adaro aims to manage the social, economic and environmental impact of the operations to the surrounding communities both during and after operations end.

Sustainable Community Development Programs

With its motto, “Creating love, developing and maintaining partnerships, growing with the community, blossoming with the people” PT Adaro Energy has established its commitment of becoming a responsible
partner and a good neighbour toward the community surrounding its operations area.

Using this as a basis, Adaro Energy through its mining subsidiary Adaro Indonesia has conducted its Corporate Social Responsibility (CSR) programs over many years by taking into account the potential of
the region in its moves to support community empowerment in the surrounding area. The CSR programs encompass four areas for community development:

1. Economic development

2. Educational enhancement

3. Health improvement

4. Social and cultural promotion

In 2009, the entire group of companies that form Adaro Energy spent a total of Rp51 billion of CSR activities, an increase of 39% over the Rp37 billion spent in 2008. 

Economic

Economic projects include assistance in financing and guaranteed offtake of production, with the focus on competitiveness to ensure continuity.

• The development of rubber plantations has been a key focus of agricultural projects by increasing areas under cultivation and improving the quality and product diversification in order to increase added value. In 2008, the program for cultivating rubber trees expanded to include an additional 615 households in 20 villages, with a plantation area of 500ha.
• The development of Small-Medium Enterprises via entrepreneurship training is directed at reinforcing the business development and productivity of local people. The program provides technology, financing and marketing. In 2008, Adaro provided training to support 743 small and medium business entrepreneurs.
• The development of Micro Financing is directed at making small business loans to local businesses and entrepreneurs. From its beginning in 2005 until the end of 2008, total funds channelled through micro-financing reached Rp 8.5 billion. In 2008, total lending amounted to Rp 1.7 billion and generated a net income of Rp 327 million.
• Other economic programs include other agribusinesses such as palm oil, vegetable and fruit cultivation, fish farming, rattan woodworking and processing, brown sugar manufacturing, small scale auto, electrical and light industrial workshops

Education

Education programs are directed at improving human resources quality through the improvement of education and moral and religious values.

• Teacher quality and school management improvement is focussed on improving the quality of education. Together with local government and third parties since 2006 Adaro has developed 31 certified tutors and trainers.
• Adaro has assisted over 1,800 students in preparing for National Examinations.
• A series of mobile libraries has been developed in order to fulfill an increased interest in reading. Currently, there are 15,000 books available to children through these libraries.
• A scholarship program has been developed for needy students together with achievement scholarships to stimulate excellence.
• Construction and renovations to schools and other educational facilities is undertaken on a continuous basis.

To measure the achievement of the program, in 2008, Adaro together with its mining contractors, conducted speed reading tests for local students. The tests showed a significant improvement in reading capability from 162 words to 661 words per minute. Reading comprehension increased 66% from 44%. In 2008, a total of 1,834 scholarships were given to students in Tabalong, Balangan, Barito Selatan Barito Timur and Batola regencies.

Health

The health programs are focussed on increasing the availability and quality of medical care to local communities.

• The free cataract program is designed to cure cataract blindness, which is endemic in the area. A total of 3,462 operations have been performed since the project began.
• In order to overcome the high rate of maternal and infant mortality, Adaro developed a pre and post natal medical support program in cooperation with White Ribbon Alliance of Indonesia.
• Adaro Indonesia provides facilities to the surrounding Community Health Centers. Free health services are made available to the community.

Socio-Cultural

Social programs support local communities by creating the opportunity for people to express themselves in the fields of religion, sport, art and culture.

• Support of religious affairs is carried out through the renovation and construction of praying houses, special events are held for festive and religious days.
• Sporting activities are supported by constructing and upgrading sport facilities and organizing and sponsoring sport events.
• Art and cultural affairs focus on bringing local arts and culture to Regency, Provincial, National and International levels.

Adaro Water Treatment Project

It all started with a basic principle of environmental management: Reduce, Reuse, and Recycle. Adaro has developed a water treatment system that recycles waste water and increases water quality to a drinkable level. The project is located adjacent to the previously mined Tutupan T300 pit which has a rainwater catchment area of 454 hectares. The pit receives high pressure water of about 750 liter per second pumped from the existing mine operations.

From this location, the quality of raw water for processing is relative stable, with a low value of total suspended solids and a relatively neutral ph value.

The water treatment plant processes the raw water in two stages at a rate of 20 liters per second. The first stage neutralizes the acidity, coagulation and flocculation while the second stage disinfects the water to neutralize bacteria. This process meets criteria set by the Ministry of Health for drinking water standards. The treated drinking water is then stored in tanks with a total capacity of approximately 525 cubic meters. This water is used in Adaro's operations as potable and drinking water.

Abdurrahman, PT Adaro Indonesia, Community Development Section Head, said "In the near future, we are going to distribute the water to the neighboring community. We are currently seeking a local partner to construct a piping system".

Adaro, Komatsu and United Tractors Execute a Basic Agreement Regarding Indonesian Bio Diesel Fuel Project

PT Adaro Energy Tbk (President Director: Garibaldi Thohir) ("Adaro"), Komatsu Ltd. (President & CEO: Kunio Noji) ("Komatsu") and PT United Tractors Tbk (President Director: Djoko Pranoto) ("UT") have executed a basic agreement to jointly advance the Bio Diesel Fuel Pilot Project in Indonesia (the "Project").

By March 31st, 2010, Adaro, Komatsu, and UT will start the Project to produce Bio Diesel Fuel*1 ("BDF") from Jatropha*2 and other feedstock plants and operate Komatsu mining dump trucks (payload: 90-ton class, "Komatsu Dump Trucks") fueled by the BDF at the Adaro coal mine in Kalimantan, Indonesia.

The project aims to ultimately achieve a sustainable environmentally friendly mining operation in the mining concession area of PT Adaro Indonesia, Adaro's wholly owned subsidiary.

Komatsu will establish a BDF plant (production capacity: 1 to 2 tons/day) and a laboratory to ensure quality of the produced BDF on the Adaro coal mine. As a manufacturer, Komatsu will also render the standard warranty to Komatsu Dump Trucks fueled by the BDF produced from the Project.

Adaro will plant Jatropha and other feedstock plants on its reclamation areas and produce BDF from their seeds or fruits to be used by the Komatsu Dump Trucks operating at the Adaro coal mine.

UT, as the Komatsu distributor in Indonesia, will provide product support for the Komatsu Dump Trucks fueled by the BDF.

The target of the Project is to operate 100 units of Komatsu Dump Trucks in and after 2012. When 20% of the currently used mineral diesel fuel will be replaced with BDF to operate dump trucks on a scale of 100 units, approximately 8,000 tons of BDF will be used annually and contribute to the reduction of approximately 20,000 tons of CO2 emissions which are roughly equivalent to 10% of CO2 emissions generated by Komatsu manufacturing plants in Japan. In the event that emission credit will be issued from the Project, Komatsu will be entitled to such credit under the basic agreement.

Notes:

1. BDF is an alternative fuel to mineral diesel oil, produced from vegetable oil or waste food oil. Popular feedstock plants are soybeans, rapeseed and palm. It is regarded that BDF will not increase the amount of CO2 in the air because the feedstock plants absorb CO2 from the air while they are growing.


2. Jatropha is considered as one of ideal feedstock plants that produces oil from its inedible seeds and grows even on dry and less fertile soil.

http://www.komatsu.com/CompanyInfo/press/2009110515421403647.html