Slide 1: Hail Creek – Financial community site visit June 2006
Hail Creek Tom Palmer Dave Lamb General Manager – Operations General Manager – Hail Creek expansion Financial community site visit – June 2006 Hail Creek safety performance 10 2.0 9 1.8 8 LTIs 1.6 7 1.4 Number of LTIs 6 1.2 LTIFR 5 1.0 4 0.8 3 LTIFR 0.6 2 0.4 1 0.2 0 0.0 03 04 05 YTD Apr 06 2 Financ
Slide 2: Development history of Hail Creek
Development history of Hail Creek 1968 Hail Creek deposit was discovered 1970s Extensive exploration took place in the early 1970s 1993 RTCA (formerly Pacific Coal) became the majority partner and manager 2001 Project approvals received in July and construction commenced in October 2003 Commenced op
Slide 3: Hail Creek overview; Environment and community
Hail Creek overview • Ownership structure: – Rio Tinto 82% – Nippon Steel Corporation 8% – Marubeni Coal 6.66% – Sumisho Coal Development 3.34% • 290 employees (operations) • 1 P&H 9020 dragline • Mobile equipment: – 16 haultrucks – 2 O&K RH170 and 1 Hitachi EX5500 excavators – 3 overburden drills,
Slide 4: Hail Creek production since inception
Hail Creek production since inception Mt 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 2003 2004 2005 Hail Creek 1 Hail Creek 2 capacity capacity Actual production 7 Financial community site visit – June 2006 Resource areas 8 Financial community site visit – June 2006 4
Slide 5: Reserves and resources
Reserves and resources • Recoverable reserves* 184 million tonnes • Marketable reserves* 224 million tonnes * Rio Tinto 2005 annual report as per JORC code • Two thick coal seams • Elphinstone and Hynds coal seams (Rangal Coal Measures) • Syncline that outcrops within ML4738 • Seam dips are shallow
Slide 6: Mt Robert acquisition; Preparation, drill and blast
Mt Robert acquisition • Marketable reserves estimated at 20mt • Acquired early 2006 Carrinyah • Further resource assessment required Mt Fort Cooper 11 Financial community site visit – June 2006 Preparation, drill and blast • Topsoiling ahead of operation is undertaken to ensure good quality rehabili
Slide 7: Typical mining section; Coal Preparation Plant flowsheet
Typical mining section Pre-strip waste is removed ahead of a relatively consistent dragline horizon 13 Financial community site visit – June 2006 Coal Preparation Plant flowsheet 1200 tph feed rate Product Handling Coarse Desliming 70% Dense Medium Horizontal Product Screen Cyclone Vibrating Basket
Slide 8: Operating cash cost breakdown; Sustaining capital expenditure
Operating cash cost breakdown General & Administration 5% Materials 19% Employee Related 33% External Services 23% Electricity 3% Explosives 6% Fuel 11% 15 Financial community site visit – June 2006 Sustaining capital expenditure • Sustaining capital estimated to average A$30m per annum over life of
Slide 9: Hail Creek expansion (HCE) project
Hail Creek expansion (HCE) project • Expansion cost increased from US$120m to $223m reflecting changes in scope and cost escalation • Capacity lifted from 6mtpa to 8mtpa • Duplication of washplant sufficient for 12mtpa • Project due for completion 3rd quarter 2006 • Key contractors – Thiess Sedgeman
Slide 10: Coordination with existing operations vital: Dalrymple Bay Coal Terminal
Coordination with existing operations vital 19 Financial community site visit – June 2006 Dalrymple Bay Coal Terminal • Queue management system introduced in April 2005 • Expansion of DBCT underway from current 55mt capacity - A$1.1 billion – Phase 1 to 68mt – Phase 2 to 80mt – Phase 3 to 85mt • Add
Slide 11: Current business opportunities / challenges; Summary
Current business opportunities / challenges • Cost management is an ongoing issue - key inputs such as tyres, explosives, fuel and labour – Tyre management program implemented – Continued focus on employee development • Ensuring adequate water management plans to achieve planned production through c