Through PT Adaro Tirta Mandiri (ATM), its subsidiary established in 2012 and commenced its operations in 2016, the Company runs a business consisting of the following 3 (three) segments:

• Water Supply System (WSS), including the construction, operation, and maintenance of WSS;
• Mining water pumping and treatment services, covering mining water pumping (dewatering) and slurry pumping as well as mining water treatment in Subsidiaries operating in the mining segment; and
• Water Solution Services, activities aimed at reducing water loss (non-revenue water).

Water Supply System (WSS)

To support the government's efforts in increasing public access to clean water, through its subsidiaries, ATM establishes partnerships with municipal/regional government-owned enterprises to build, operate, and maintain WSS. ATM's subsidiaries intake surface water to be treated in water treatment plants, then distribute it to the public through the respective municipal/regional government-owned enterprises.

Flow Chart 1. Clean Water Treatment Process

1. Raw Water Unit
   Raw water is drawn using pumps and channeled through raw water distribution pipes from the surface water location to the water treatment plant (WTP). This operation is conducted under the Water Resources Extraction Permit (IPSDA).
2. Treatment Unit
   The process of treating raw water into clean water is carried out in accordance with the Minister of Health Regulation Number 2 of 2023 concerning Implementing Regulations of Government Regulation Number 66 of 2014 concerning Environmental Health.
3. Distribution Unit
   The municipal/regional government-owned enterprise distributes clean water from the WTP to the public through piping networks.
4. Service Unit
   The Service Unit handles beneficiary services up to the user's destination point, such as households, industries, or other service areas.

Since the beginning of operations, ATM’s subsidiaries have overall signed 7 (seven) cooperation agreements with municipal/regional government-owned enterprises and 1 (one) cooperation agreement with a private enterprise.

The following are the WSS businesses currently in operation:

WTP projects under construction phase:

*JV Company
** Phase II will be constructed with 200 liters per second, bringing the total to 450 liters per second
*** Will be constructed in 2 (two) phases, namely 2x100 liters per second

In 2023, ATM’s subsidiaries distributed 31,811,606 m³ of clean water to municipal/regional government-owned enterprises, or an average of 2,650,967 m³ per month. Serviced House Connections (HC) reached approximately 147,000 HC with an assumed consumption of 18 m³ per HC/month. As of June 30, 2024, Adaro Water continued its positive trend. Clean water distribution to government-owned enterprises reached 17,710,768 m³ or an average of 2,951,794 m³ per month. The number of HCs established increased in the second quarter, reaching around 164,000 HC, based on an assumed usage of 18 m³ per HC per month.

Mining Water Pumping and Treatment Services

To support the Group's mining segment, Adaro Water conducts slurry pumping activities through PT Adaro Wamco Prima (“AWP”), which is owned by ATM with a 60% effective ownership, and handles mining water pumping and management through PT Adaro Tirta Sarana (“ATS”), which is owned by ATM with a 99.99% effective ownership.

Flow Chart 2. Slurry Management and Mining Water Pumping

1. Customer Request
   Based on customer request, ATS arranges the schedule and volume of slurry or mining water to be pumped.
2. Slurry Pumping / Dewatering Process
   Slurry pumping is carried out with a Specific Gravity (SG) above 1.2, and mining water pumping is performed with an SG between 1.0 and 1.05.
3. Discharge Point
   The discharge point for pumped slurry is the drying pond, and the discharge point for mining water pumping is the settling pond managed by the respective mining company.

In addition to operating dewatering pumping, ATS also treats mining water using chemicals so that the mining water generated from AI mining activities meets the environmental quality standards in accordance with the parameters set by the Minister of Environment and Forestry Regulation Number 113 of 2003, South Kalimantan Governor Regulation Number 36 of 2008, and Technical Approvals.

Flow Chart 3. Mining Water Management Process

1. Safety Pond - a containment facility for mining water generated from mining activities and rainwater catchment.
2. Treatment Unit - a mining water treatment facility and chemical dosing using dosing pumps. Chemical dosing is carried out automatically with doses that can change automatically according to the quality of the water entering the treatment unit.
3. Mud Pond - a facility to settle remaining carried-over mud. In this facility, water quality is measured again before the water flows to the point of compliance (point fta compliance).
4. Point of Compliance (POC) - a specific point or location to measure and evaluate compliance with environmental standards or requirements.

Clean Water Solution Services

One of the biggest issues in the Water Supply System (WSS) faced by Municipal/Regional Government-Owned Enterprises in Indonesia is the high rate of water loss. Based on data from the Ministry of Public Works and Public Housing, the national water loss rate in 2023 was 33.7%, which is above the tolerance limit of 20%.

Through its subsidiary PT Adaro Tirta Wening (“ATW”), ATM collaborates with Perumda Tirta Wening to reduce the water loss rate in the North Bandung City service area. Based on measurement results, the water loss rate in Perumda Tirta Wening's area was 44.98%. ATW aims to reduce the water loss rate down to 17%.

Flow Chart 4. Non-Revenue Water Management Process

The cooperation between ATW and Perusahaan Umum Daerah Tirta Wening Kota Bandung to reduce the water loss rate is the first and only performance-based non-revenue water reduction partnership in Indonesia. Based on this cooperation agreement, the performance incentives for ATW are calculated as follows:

• Performance incentives from DMA establishment, namely performance incentives after the completion of the DMA establishment.
• Performance incentives for non-revenue water reduction, namely performance incentives by comparing the water loss rate before services are performed (baseline) with the water loss rates in the months after services are performed by ATW.