Production at Straits Resources Sebuku coal operation in Indonesia was below expectation for the quarter due to a prolonged wet season in Kalimantan.

In the six months to June 2007 Sebuku recorded rainfall far in excess of the historical average for the period. Production of 623Kt was achieved for the quarter and 1457Kt for the half year.

Sebuku historically achieves higher production in the second half of the year and continues to pursue production in 2007 of 4 million tonnes, however, this is dependent on the mines production recovery from the high rainfall.

The mine continues to increase its footprint and accelerate waste removal in line with Sebuku's expansion plan to 6 million tonnes per annum. The expansion works are well under way with the plant and infrastructure expected to be completed by mid 2008. Production in 2008 is targeted at 5 million tonnes and 6 million in 2009.