As part of Antam's commitment to effectively implement GCG, Antam has formed the Risk Management Division which is responsible to the President Director The monitoring and management of material business risk is conducted based on Risk Management Policy No.360.K/02/DAT/2010 which was signed by the President Director on 30 December 2010. The policy guides Antam's employees to effectively conduct risk management process and activities in accordance to existing regulations an to ensure the equal perception and understanding on risk management as well as the realisation of continual risk management process to ensure a coordinated and integrated risk management and to ensure the strategic initiaves are inline with corporate strategy.

Antam's risks include:

1. Country Risks
The Company's and Subsidiaries' assets and operations are almost entirely located in Indonesia. The Company and Subsidiaries could experience negative effects if there are changes in governmental structures and policies and if there is instability of social or political, economic, legal, legislative or other developments inside or outside the country which would cause negative impact on Indonesia, such as terrorism, separatism, religious and ethnic discord, and riots. The causes of the risks above are beyond the Company's and Subsidiaries' control. However, the management believes that the Company and Subsidiaries have the capability to manage their business in this country, that the Company and Subsidiaries have a competitive advantage compared to other companies in the mining industry in Indonesia, and that Indonesia is moving towards progress thus, country risks in Indonesia will decrease in the future.

2. Regulation Risks
The application of UU Minerba might create such risks as the lack of domestic buyers for certain mining products related to the obligation to supply the domestic markets, the decrease in mining reserves due to limitation in the mining exploration area and production activities, and the Company's and Subsidiaries' readiness to fulfill their obligation to build processing and refinery facilities in the country within five years or up to 2014. In addition, the application of UU Minerba and Regulation No. 28 Year 2009 of the Ministry of Energy and Mineral Resources of the Republic of Indonesia regarding mineral and coal mining services could impact the Company and Subsidiaries. The Company is prohibited from involving the Subsidiaries and/or affiliates in mining services in the Company's mine area, unless approved by the Director General on behalf of the Ministry of Energy and Mineral Resources. Currently, most of the mining service activities in the Company's mine areas involve the Company's Subsidiaries and other related parties. However, UU Minerba also provides the opportunities for the Company and Subsidiaries to acquire additional income from processing mining products from other mining companies in areas surrounding the Company's and Subsidiaries' processing plant and refinery, and decreases the potential interference by third parties on the Company's and Subsidiaries' Mining Authorization. It is expected that the Government Regulation that will be issued as a guideline of UU Minerba will work to the best interest of the Company and Subsidiaries.

3. Operational Risks
Operational risks are risks that may impact negatively the Company's and Subsidiaries' daily operations, and the safety and health of their workers and the environment and local community. Risks that can be categorized as operational risks are those that arise from machine or equipment damages, work accidents, strikes, non-compliance with standard operating procedures, illegal mining and failure in environmental management. To minimize these risks, the Company and Subsidiaries consistently provide training and education to their employees, appoint professional contractors, implement the zero-accident policy, develop good relationship with employees and the local community, adopt and environmental management that meets international standards. The Company's nickel, gold and precious metal refinery facilities have obtained ISO certifications.

4. Commodity Price Risks
Commodity prices are very unstable in line with supply changes and demands from customers. Currently, there is a high risk that the average price of nickel will significantly decrease compared to the prices in prior years. Although the Company has diversified customers and does not depend on specific market or country, the Company's revenue can still be negatively impacted by the decrease in commodity prices. The Company has a natural hedge against this risk, because the Company has diversified products and revenue sources. The Company can also possibly conduct hedging transaction the main purpose of which is to protect the Company's revenue budget. Nevertheless, several hedging positions can eliminate the Company's opportunity to gain higher revenue if the price of hedging increases The Company believes that the best way to handle risk of commodity price is by decreasing the production cost. The Company has a commitment to convert the Company's main fuel source from diesel to cheaper fuel source, such as natural gas, coal or hydro power.

5. Foreign Exchange and Interest Rate Risks
The Company's revenue and cash position are mostly in United States dollar while most of the Company's operating expenses are in Indonesian Rupiah. Although the Company's payables are in United States dollar, in general, the Company suffers from the negative effect of the Indonesian rupiah appreciation against the United States dollar. In order to overcome this risk from time to time, the Company may engage in hedging transactions. The Company is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities. These exposures are managed mainly through the use of interest rate swaps.

6. Credit Risks
Credit risk is the risk that the Company and Subsidiaries will incur a loss arising from their customers' or counter-parties' failure to fulfill their contractual obligations. There are no significant concentrations of credit risk. The Company and Subsidiaries manage and control this credit risk by setting limits on the amount of risk they are willing to accept for individual customers and by monitoring exposures in relation to such limits. With respect to certain financial assets of the Company and Subsidiaries, which comprise cash and cash equivalents, trade receivables and other receivables, the Company's and Subsidiaries' exposure to credit risk arises from default of the counter-party, with a maximum exposure equal to the carrying amount of these instruments. The Company and Subsidiaries are confident in their ability to continue to control and maintain minimal exposure to credit risk, since the Company and Subsidiaries have clear policies on the selection of customers, legally binding agreements in place for mineral commodity sales transactions and historically low levels of bad debts. The Company's and Subsidiaries' general policy for mineral commodity sales to new and existing customers is to select customers with strong financial condition and good reputation.

7. Marketing Risks
The Company and Subsidiaries are price takers for their commodities, such as nickel ore, ferronickel, gold, silver and bauxite ore. The Company's and Subsidiaries' revenue is very dependent on world commodity price and market absorption. Export destinations for nickel ore, ferronickel gold, silver, coal and bauxite are Japan, Korea, China and Europe. Gold and silver are exported to Singapore outside of the sales to the domestic market. Coal is sold in the domestic market and also exported to China. Marketing risk is related to the possibility of products being unsold due to the inability to fulfill the buyer's ore specifications or due to implementation of new regulation. Based on the International Maritime Solid Bulk Cargoes, nickel ore is not listed as a safe freight commodity to be loaded due to its high moisture content. Therefore, the Company undertakes a stockpile management system to maintain nickel ore moisture content to conform with customer requirements. To reduce buyer default risk, the Company has implemented a “payment in advance” scheme for certain existing and potential buyers with long-term contracts. In addition, the Company is protected by the practice of long-term offtake sales agreement with more than one buyer, especially for ferronickel product. This long-term agreement guarantees that the Company always has buyers for its products. The Company and Subsidiaries always seek for new markets while they keep maintaining their existing buyers by offering competitive prices through efficiency improvement to lower production cost. Furthermore, the Company and Subsidiaries expand their business through a number of development projects to produce products that have added value, such as smelter-grade alumina and nickel pig iron.

8. Liquidity Risk
Prudent liquidity risk management includes managing the profile of borrowing maturities and funding sources, maintaining sufficient cash and marketable securities and the ability to close out market positions. The Company's and Subsidiaries' ability to fund their borrowing requirements is managed by maintaining diversified funding sources with adequate committed funding lines from high quality lenders. The Company and Subsidiaries are exposed to liquidity risk on account of their obligations and capital loans for their projects.

9. Capital Risk Management
The Company's and Subsidiaries' objectives when managing capital are to safeguard their ability to continue as a going concern in order to provide returns for stockholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust their capital structure, the Company and Subsidiaries may adjust the amount of dividends paid to stockholders, issue new shares or sell assets to reduce debt. Consistent with other entities in the industry, the Company and Subsidiaries monitor capital on the basis of the debt to equity ratio. This ratio is calculated as debt divided by total capital. Debt is calculated as total liabilities as shown in the consolidated statements of financial position. Total capital is stockholders' equity as shown in the consolidated statements of financial position. During the year ended December 31, 2011, the Company and Subsidiaries still maintained their strategy adopted in 2010, that is, to maintain a maximum debt-to-equity ratio not exceeding 2:1.