MACARTHUR COAL LIMITED

Macarthur Coal is a leading supplier of low volatile pulverised coal injection (PCI) coal to the major steel mills in Asia, Europe and the Americas. The company’s operations are located in the Bowen Basin, Queensland, Australia.

Macarthur Coal Mission

Dynamic growth of shareholder value through:

Building long term relationships with our customers
Preserving our independence
Growing our production base to meet customer demands
Enhancing our reliability.

Macarthur coal asset portfolio

Macarthur Coal’s asset portfolio ranges from the well established Coppabella Mine and the newly developed Moorvale Mine through to a range of prospective coal exploration tenements.

Macarthur Coal has a 73.3% interest in the Coppabella and Moorvale mines. The two mines have a combined production capacity of 6.2 million tonnes per annum.

The Coppabella and Moorvale mines provide over 38% of the global seaborne low volatile PCI coal market.

Pulverised Coal Injection (PCI) Coal

PCI coal is pulverised and injected into blast furnaces as a replacement for coke in the production of pig iron. Production is limited to seven mines in Australia including the Coppabella and Moorvale mines.

Low volatile coal is increasingly sought by steel manufacturers in preference to high volatile coal that has been traditionally used in the process. Low volatile coal provides superior performance in the blast furnace due to its higher carbon and energy content. Low volatile coal is also cheaper to prepare for injection.

A blast furnace is illustrated in the diagram below. PCI coal is injected through the injection nozzle near the base of the furnace.

Diagram courtesy of the World Coal Institute.

Coppabella Mine

The Coppabella Mine is an open cut coal mine in Queensland’s Bowen Basin. The Coppabella deposit is a large, shallow coal deposit with an average seam thickness of approximately twelve metres.

Coal handling and preparation plant at the Coppabella Mine

The mine’s principal product is an 8.5 percent ash low volatile PCI coal. The mine also produces an ultra low volatile (ULV) coal.

Saleable coal production at the Coppabella Mine is currently 4.2 million tonnes per annum.

The success of the Coppabella Mine is based on:

Production of an 8.5% ash low volatile PCI coal for a growing market
The existence of a large, open cut coal deposit with an average seam thickness of 10 metres
Close proximity to rail and port infrastructure
Modern, efficient coal preparation plant.

Dragline, truck and excavator at the Coppabella Mine

Moorvale Mine

The Moorvale Mine is an open cut coal mine 13 kilometres south of the Coppabella Mine in Queensland’s Bowen Basin.

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Overview of the Moorvale Mine

The Moorvale Mine was developed from a greenfields project to production in a 12 month timeframe.

The Moorvale Mine has a number of favourable features including:

a coal seam averaging 9 metres
a low strip ratio
close proximity to rail and port infrastructure
multi-product market potential
modern efficient coal preparation plant.

The Moorvale Mine’s production rate was recently increased from 1.6 million tonnes per annum saleable tonnes to 2.0 million tonnes per annum and the mine is currently operating at its planned capacity.

Exploration

Macarthur has an extensive, highly prospective tenement portfolio. Seven projects have been identified to date.

The company is formulating its development strategy with respect to its exploration projects. Development is to be staged in line with market demand.

The status of each exploration project is as follows:

Project name	Potential mine type	Potential product
Olive Downs	Open cut	PCI coal
West Burton	Underground	Coking and PCI coal
West Rolleston	Open cut	Thermal coal
West Moorvale	Underground	Coking and PCI coal
Codrilla	Open cut and underground	PCI coal
Wilunga	Underground	PCI coal
West Walker	Underground	PCI coal