Energy and Emission

Energy consumption is an important aspect of Company's operations because energy costs are one of largest cost components in mining services from upstream to downstream, both at head office, 16 districts and 2 support offices that assist district operations throughout Indonesia. Most widely used energy sources are fossil fuels as fuel for production equipment and electricity from Perusahaan Listrik Negara (“PLN”) for supporting activities outside mine. Use of energy creates main source of Greenhouse Gas (“GHG”) emissions in Company's activities. Because of GHGs, climate change occurs and causes environmental degradation, floods and droughts and other effects that threaten sustainability of human life.

In Paris Agreement, countries in the world, including Indonesia, have committed to prevent earth's average temperature from rising by no more than 2° Celsius by 2100. Climate Action is one of efforts made to reduce emissions and build resilience to climate impacts through adaptation and mitigation actions, including preventing generation of GHG emissions from human activities. Energy efficiency and use of cleaner energy sources is one of Company's commitments to reduce GHG emissions.

Along with use of energy for operational activities, Company also produces GHG emissions from mining activities, waste treatment, chemical processes and land use and utilization. Company is committed to taking steps to fight climate change, one of which is to reduce GHG emissions through various initiatives. In context of sustainability, emission control is an important aspect for Company. At point 11 in Occupational Health and Safety, Operational Safety and Environmental policy, Company adopted an energy efficiency policy, namely energy management, resource-saving and reducing GHG effects.

This energy efficiency policy provides guidance for every employee of Company to comply with Government regulations related to energy efficiency, reduce achievement of specific energy consumption intensity from previous year, increase achievement of energy efficiency ratio from previous achievement, apply appropriate and environmentally friendly technology to reduce energy consumption and implement a continuous monitoring and evaluation system. All of Company's emission control activities are carried out in accordance with Government regulations, namely Presidential Regulation No. 61 of 2011 concerning Action Plan for Reducing Greenhouse Gases (“GHG”) and Presidential Regulation No. 71 of 2011 concerning Implementation of National Greenhouse Gas Inventory.

Company's strategy in making efforts to reduce GHG emissions is in line with Paris Agreement. Reduction of GHG emissions in Company's activities is carried out by means of energy efficiency, use of renewable energy and environmental conservation efforts that have an impact as a CO2 absorber. Company has also established seven Key Risk Indicator (“KRI”) points in energy sector which must be implemented in all districts to support efforts to reduce GHG emissions.