OAKY CREEK COAL

1
OAKY CREEK COAL
Analyst Investor Briefing by Mike Ryan,
General Manager 26 November 2001
2
Oaky Creek

• Majority owned and operated by M.I.M. Holdings
  Limited
• Located in Queenslands 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

3
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

4
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.

5
Oaky Creek Ownership
MIM 75
Sumitomo 15
Itochu 10
6
Oaky Creek Coal location
7
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

8
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

9

Oaky Creek Stratigraphic Section
10
Oaky Creek Organisation Chart
11
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 gt11 years at 5 Mtpa

12
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.

13
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

14
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

15
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

16
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

17
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

18
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

19
Rehabilitation Specifications
BEFORE
AFTER
20
Rehabilitation Success
BEFORE
AFTER
21
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 KPIs

22
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

23
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.

24
Australian Longwall Mines Total Production
2001
MT
Total ROM Tonnes
Source Joint Coal Board
Year ending 30 June
25
Oaky Creek Production (100)
(Quarterly)
Tonnes (000s)

1998
1999
2000
2001
Product coal
Washplant upgrade
Year ending 30 June
26
Oaky Creek Production (100)
Capacity 10Mt/yr
Product coal
Year ending 30 June
27
Increasing Coal Productivity
Tonnes of coal per employee
Year ending 30 June
28
Broad market for coal - 2001
Year ending 30 June
29
Increased Oaky Creek EBIT Flat A prices
received
(A/T)
(AM)
(29)
Data is 100
Year ending 30 June
30
Competitive coal production
US/t
Quartiles
Source AME 2001 coking coal cash costs adjusted
for current FX A/US 0.5218, US/C 0.6274