OAKY CREEK COAL: OAKY CREEK COAL Analyst & Investor Briefing by Mike Ryan, General Manager 26 November 2001


Oaky Creek: Oaky Creek Majority owned and operated by M.I.M. Holdings Limited Located in Queensland’s world-renowned Bowen Basin Producing two high quality medium volatile coking coals Capacity expanded to 10Mtpa+ product Exporting through both Dalrymple Bay and Gladstone Highly productive and highly competitive


Oaky Creek History: Oaky Creek History First coal produced in 1983 Initially a dragline-based open cut mine Underground mine (Oaky No.1) commenced in 1989 Oaky North underground mine commenced longwall production in February 1999 Alliance longwall punch mine started in 1997 Open cut initially ceased production September 1999, production resumed in July 2001


Oaky Creek Current Status: Oaky Creek Current Status Oaky North longwall mine in full operation Oaky No1 longwall mine in full operation Open Cut mining recommenced July 2001 with 2 draglines - potential for 6 years of operation Alliance Operation scheduled to finish January 2002 but potential to expand and operate until 2004.


Oaky Creek Ownership: Oaky Creek Ownership Sumitomo 15% MIM 75% Itochu 10%


Oaky Creek Coal location: Oaky Creek Coal location


Oaky Creek Geology: Oaky Creek Geology German Creek coal measures One principal coal seam worked - the German Creek seam All underground mining in the German Creek seam Regional rank gradient results in volatiles reducing from south (Kestrel, Gregory) to north (German Creek, Norwich Park) German Creek coal measures including Aquila are characterised by excellent plastometric properties and coke strength at any particular rank


Oaky Creek Exploration: Oaky Creek Exploration Exploration by surface drilling and 3D Seismic 3D Seismic used as criterion for proven reserves Drilling used for geotechnical evaluation, coal quality, insitu gas quantity and validation of seismic interpretation Expected exploration expenditure $12.5M for 2001/2002


Slide9: Oaky Creek Stratigraphic Section


Oaky Creek Organisation Chart: Oaky Creek Organisation Chart


Oaky No.1 Underground: Oaky No.1 Underground Transition year New longwall will be commissioned in the south-east area of the mine in February 2002 3D seismic programme in progress to define structure of Sandy Creek East area Reserves for >11 years at 5 Mtpa


Oaky North Underground: Oaky North Underground Currently two longwall blocks developed in front of current longwall production. Plan to always maintain two blocks in front. Longwall production NLW2 commenced March 2000. Utilisation of two complete sets of longwall equipment (apart from shields) to reduce longwall moves. Planned move time 24 days, last move completed in 22 days.


Oaky North Underground: Oaky North Underground Resourced to ensure optimum maintenance at low cost Longwall delivering onto high capacity 4,500 tonne per hour belt system for delivery to CPP. Manning levels minimised to cover core functions. Reserves of 40 million tonnes in present area with further reserves in the eastern area


Alliance Underground: Alliance Underground A longwall punch operation mining from final highwalls into otherwise non-recoverable coal Located in the south-west, with volatiles between 28-29% Contractor owned and operated equipment Potential for LW mining until 2004-2005 Raw coal washed in Oaky Creek washplant


Oaky Creek Surface Operations: Oaky Creek Surface Operations Capacity recently upgraded to 1800 tph with the construction of a fourth module Fines circuit upgraded to improve overall metallurgical efficiency Maintenance philosophy in place to achieve 7600 hours availability Open Cut Operations recommenced in July to supplement Raw Coal feed Capacity now 13.5 Mtpa raw coal feed


Environmental Initiatives: Environmental Initiatives Environmental Management System Based on ISO14001 framework Structured to distribute environmental responsibilities throughout all OCC departments Key component is environmental awareness training for all employees and contractors


Environmental Initiatives: Environmental Initiatives Water Management Raw water consumption per tonne of clean coal has reduced by 54% in the last 4 years 75% of water used in the coal preparation plant is from recycled sources Life of mine water management plan and water balance model is updated and reviewed annually


Environmental Initiatives: Environmental Initiatives Rehabilitation OCC uses the Internally Drained Rehabilitation (IDR) technique developed in 1989 Objectives are long term stability,minimise offsite impacts, and final land use of native woodland IDR methodology was approved by the EPA in 1999 Method won the 1999 AMEEF Award


Rehabilitation Specifications: Rehabilitation Specifications BEFORE AFTER


Rehabilitation Success: Rehabilitation Success BEFORE AFTER


Environmental Initiatives: Environmental Initiatives Waste Management Total waste management system implemented November 2001 All waste is segregated and recycled where possible (metal, wood, paper, plastics, oil) Waste tracking and monitoring system used to assess performance against KPI’s


Oaky Creek Infrastructure: Oaky Creek Infrastructure The workforce is housed in the MIM-built town of Tieri, 13km from the mine Rail access by Queensland Rail (QR) to Dalrymple Bay (DBCT), 297km, and Gladstone, 394km QR is state government owned but recent third party access provisions will bring increasing competition


Oaky Creek Infrastructure (cont): Oaky Creek Infrastructure (cont) DBCT is operated by a company jointly owned by the six users DBCT has 2 berths, 2 shiploaders and a current capacity of 43.5 Mtpa. It has 2.4 Mt of stockpile capacity Gladstone is operated by the Gladstone Port Authority, a statutory authority RG Tanna Coal Terminal has 2 berths, 2 shiploaders and a current capacity of 35 Mtpa. It has 3.5 Mt of stockpile capacity Barney Point Coal Terminal has a single berth and shiploader with a capacity of 5mtpa. It has 0.5Mt stockpile capacity.


Australian Longwall Mines  Total Production 2001: Australian Longwall Mines Total Production 2001 Total ROM Tonnes MT Year ending 30 June Source: Joint Coal Board


Slide25: Oaky Creek Production* (100%) (Quarterly) Tonnes (000’s) 1998 1999 2000 2001 * Product coal ** ** Washplant upgrade Year ending 30 June


Slide26: Oaky Creek Production* (100%) Year ending 30 June Capacity 10Mt/yr * Product coal


Increasing Coal Productivity: Increasing Coal Productivity Year ending 30 June Tonnes of coal per employee


Broad market for coal - 2001: Broad market for coal - 2001 Year ending 30 June


Increased Oaky Creek EBIT * Flat A$ prices received: Increased Oaky Creek EBIT * Flat A$ prices received Year ending 30 June (A$M) (A$/T) (29) * Data is 100%


Competitive coal production: Competitive coal production US$/t Source: AME 2001 coking coal cash costs adjusted for current FX: A$/US$ 0.5218, US$/C$ 0.6274 Quartiles