Ann: June Quarter Production Results, page-13

Firmed up their guidance for the year means little until we see sustained production and shipping performance. Does MMI have the barges set up correctly for the Gulf? Some people in Weipa have been critical of the set up as the original barges came from a very quiet marine setting off the Kimberley coast. I am not stewing over the past as the past has come back to bite MMI once again with a late start and more teething issues and now unexpected weather. Did MMI learn from the issues with the start up last year? How many millions were wasted with the delays to mining and shipping? MMI need to learn from this critical mistake and postpone start up next year. One option is to build an off season stockpile of 200,000 tonnes. The wet takes some time to kick in and additional mining capacity could be used to build that stockpile adjacent to the BLF. From my experience, bauxite stockpiles generally are pretty good at draining rainfall as rapid runoff. MMI need some more flexibility with loading 2 ships, invest in a second loading crew and a more robust single screening facility. It is fair to say a new operation should have teething issues, but now it is teething issues x2. Is MMI going to replicate the same problems next year and then with the 6 million tonne expansion?

When it comes to the recent release, have MMI cleared the books of damaging news or are they managing the damaging news over 2 releases? Speculation I admit but the SP is going to be soft until the quarterly is releases and MMI need to shed the rosy headlines approach and just be frank with all information. I expect shipping costs are going to be high once again and due to demurrage. If MMI make a loss over the past quarter I feel MMI will need to make some changes at head office. The Bauxite Hills project started out as a simple digging and shipping operation with lean mining principles. That was the essence of the operation and budgeted margins. There have been so many changes and all the reasons not communicated to us. I would be interested to learn the actual staff turnover % and in management and technical positions. Oh well, don't dwell on the past but you need to understand the past and the problems to avoid issues in the future. There are some clear learnings from 2 years of start up teething issues, however I am more inclined to call the start to this year a debacle.