Metallurgical coal production rose five percent from March 2003 quarter to nine million tonnes. Annual production figures of 34.6 million tonnes were down three percent on the corresponding period.

The rise on production from the March 2003 quarter reflected stronger customer demand in the second half of the year, offset by adverse mining conditions at central Queensland longwall Crinum and the closure of southern New South Wales Tower colliery.

Gregory/Crinum output was 488,000 tonnes for June quarter, down significantly from 761,000 tonnes in the previous period and 685,000 tonnes in the June 2002 quarter.

Annual shipments of Queensland coal was in line with the previous year and annual shipments of Illawarra coal were seven percent higher at 7.2 million tonnes, reflecting strong customer demand.

Thermal coal production was up for the quarter from 20.6 million tonnes in the June 2002 period, to 22 million tonnes this quarter. The increase was attributed to higher production at Mount Arthur North open cut mine where deliveries to domestic and export markets were aligned with the ramp up plan.

In development news, surface facilities and ventilation shaft construction at the Dendrobium longwall operation has been completed.

Commissioning of the coal loading facilities (Kemira Valley) is currently scheduled to commence next month. Construction associated with the washery upgrade and the thermal drier installation is currently ramping up.

The project is approximately 33 per cent

complete with underground coal drivage and conveyor belt installations well underway.

Just over 55 per cent of the project’s capital has been committed to date. The capital forecast

remains unchanged at US$170 million. Forecast longwall commencement is tracking ahead of

schedule and is expected in the first quarter of 2005.