Ann: Change of Director's Interest Notice, page-40

Just looking at the last quarterly, Bluff produced 168kt which was the low volatile PCI product sales. This will be discontinued as this pit winds up.

The Burton Complex generated sales of 98.6kt of hard coking coal and 238.4kt of thermal coal, a split of 29.3% hard coking and 70.7% thermal coal. This is a low coking thermal split for the Rangals. The report doesn't explain why the coking split was lower but there could be several explanations;

• washing the coal harder to generate a higher value coking product, producing more secondary product
• the seam mix mined; i.e. more Leichardt than Vermont seam (I recall seeing the mine plan had changed, so is the Vermont seam not mined in one of the pits?)
• mining weathered coal

US$255/t for the coking product suggests a pricing relativity of 77% to Platts index for premium LV HCC. Its quite a low relativity and suggests a moderate coke strength, likely considered a semi-hard coking coal. Compared to the WHC presentation for the Blackwater acquisition where the SHCC product was expected to achieve 85% of PLV and the SSCC expected to achieve 75% of PLV index pricing.

The thermal pricing achieved was US$100 which was close to the average price for API5 5,500 kcal nar thermal coal in the quarter (see Yancoal's last quarterly).

So it appears to me that BCB are generating a lot of thermal coal at the close to the spec of the Newcastle high ash index (and some moderate value coking coal), which may expose them if thermal coal prices continue to decline.

Does anyone have any insight as to the reason and whether the coking split will improve. Note: I see there was some met coal shipments pushed into the next quarter but it still appears low.