Finally to foreign exchange and inflationary pressures. In 2010 a majority of emerging currencies appreciated significantly against a declining US dollar. The Aussie Dollar and the Japanese Yen increased 12.4% and 12.8% respectively. Gold reached record highs of above US$1400 per ounce, representing a 26.9% increase and crude oil also increase by 14.8%. Most emerging nation's upward cost and wage pressures continue to squeeze manufacturing. In China inflation increased by 5.1% and GDP finished up by 9.6%. Further, Chinese infrastructure constraints continue to limit transport of key commodities from western and central provinces to rapidly expanding population hubs in the east.
The oil shocks of the early 1970's caused the Indonesia Government to revise its energy policy, which up till that time was heavily reliant on oil and gas and Pertamina, to include coal as a fuel for domestic use. A decree was issued by President Suharto in 1974 requiring cement plants, amongst other industries, to use coal to allow more oil exports to obtain the then high prices of oil as foreign exchange.
In 1976, in order to attract both foreign and domestic private investment into the coal industry, the Mines Department divided East and South Kalimantan into 8 coal blocks and invited tenders for these blocks based on work program commitments.
The Spanish Government company, Enadimsa, bid for Block 8 in the Tanjung district of South Kalimantan as coal was known to be present in the district from outcrops mapped by Dutch geologists in the 1930's and then intersected at depth in oil wells drilled by Pertamina in the 1960's .No other company bid for this Block as at that time it was regarded as being too far inland and the coal of low quality
Adaro's Coal Cooperation Agreement (CCA) was signed on 2 November 1982. This Agreement was essentially the same as that signed by the other groups and was a combination of the Pertamina oil production sharing contracts, as required by the Government , and Mineral Contracts of Work, as requested by the private coal investors. Key aspects of the CCA were defined periods for exploration, development and operation; a royalty of 13.5% of production which was a reduction from a much higher percentage proposed by the Government and a fixed tax rate of 35% for the first ten years and 45% hereafter which reflected the higher global tax regime that existed at that time.
