why is it....., page-29

G'day Aussie

Exxaro has too kinds of operations.

1. Tied operations with Escom, where Escom contribute opex and capex. These operations are Matla & Arnot (both in Mpumalanga province), which not the RES coalfield. I have calculated Exxaro's share of the opex is AUS$20 per tonne. I have emailed Exxaro again to clarify this.

2. Commercial operations, which appears to be msotly Grootegeluk in Limpopo province near RES but also other operations. I have calculated costs before interest and tax are $22 per tonne. We can add $1 a tonne for interest for RES.

If we discount the other lower tonnage Exxaro operations, I would say RES can mine for at most AUS$20 a tonne and probably less.

HOWEVER, the revenue Exxaro is receiving is lower than I would expect. I have emailed for clarification.

I phoned RES and asked what revenue they expect from ESCOM and they said they have no idea. (lol...disconcerting).