Coppabella and Moorvale Coal Mines Joint Venture ("CMJV")

The Coppabella and Moorvale coal mines joint venture ("CMJV"), which is an unincorporated joint venture established in December 2003, brings together a group of companies with a highly successful track record in coal mining and marketing. The current participants are:   Parent Company Joint Venture Participant Interest Peabody Energy Peabody Energy Australia PCI Pty Ltd 73.3% CITIC Resources Holdings Limited CITIC Australia Coppabella Pty Limited 14.0% Winchester Coal Pty Limited Winchester Coal Operations Pty Limited 7.0% JFE Shoji Trade Corporation KC Resources Pty Limited 3.7% Nippon Steel Trading Co. Limited NS Coal Pty Limited 2.0% The Coppabella and Moorvale coal mines are operated by the CMJV. The coal resources of the mines date from the late Permian age and are parts of the Rangal Coal Measures of the Bowen Basin. The resources have been proven by extensive drilling programs and, to date, over 1,000 boreholes have been drilled. The mines are open cut mines. Once an area has been mined, it will be re-contoured by using the removed overburden and topsoil. The topsoil will be fertilized and seeded, then some native tree and grass species are planted.

The CMJV is one of the only five producers of low volatile pulverized coal injection coal (“LV PCI coal”) in Australia. This coal is predominately sold to steel mills for use in the production of pig iron from iron ore in the blast furnace process. It is recognized as a cheaper alternative for coking coal which has been used traditionally in the blast furnace process. LV PCI coal has high content of carbon and energy but low output of ash and sulphur. It is more efficient in the blast furnace process and more economical to prepare for injection. The quality of coal from the mines is monitored at all stages of production to ensure that contractual quality specifications are met consistently. The coal is sampled and analysed at the following stages: prior to exploration drilling; prior to mining; at the preparation plant feed stage; on delivery at the Dalrymple Bay Coal Terminal ("DBCT"); and during ship loading prior to export. The processed coal is then conveyed onto the product stockpile to await train loading and transport to DBCT for export. CITIC Australia Commodity Trading Pty Limited has been appointed as the exclusive sales agent for any coal sales by CMJV to China. The coal is loaded onto Aurizon's electric trains at the mines' dedicated rail loops, at a rate of 3,000 tonnes per hour. Each train has a unit capacity of 10,000 tonnes.

DBCT operates 365 days per year and can accommodate vessels up to 220,000 DWT with a loading rate of 7,200 tonnes per hour. It receives various coals from a variety of coal producers. Customers are able to access different coals to meet their specific production requirements from one port, thereby avoiding the additional cost of loading at multiple ports. DBCT provides the additional cost-effectiveness of being one of the closest Australian ports to the Asian market. Current port capacity at DBCT is 85 million tonnes per annum after the expansion in 2009. The mines have long term agreements with Aurizon in relation to  coal transportation. CMJV employs an environmental consultant to advise on environmental management practices at the mines and to ensure compliance with applicable laws, regulations and standards. The coal mining industry positively impacts the provision of both urban and rural infrastructure. The Queensland government receives royalties for all Queensland coal sold. Besides, CITIC Bowen Basin Pty. Ltd. (“CITIC Bowen Basin”), an indirect wholly-owned subsidiary of the Company, completed disposal of its 8% interest in the Codrilla Project to certain CMJV participants in June 2011. Meanwhile, CITIC Bowen Basin has also transferred its remaining 7% interest in the Codrilla Project to CITIC Australia Coppabella Pty Limited ("CITIC Coppabella"), an indirect wholly-owned subsidiary of the Company and a CMJV participant. At present, the Company holds 14% of the Codrilla Project through its interests in the CMJV.   Coppabella Coal Mine The Coppabella Mine is situated 140 km south-west of Mackay in North Queensland, Australia. The development of the Coppabella Mine from a greenfields project to a coal production project set an industry benchmark. The development was completed in less than 12 months, allowing mining to commence in July 1998. The mining lease over the initial mining area was granted on 1 June 1998 after signing a Native Title Agreement on 11 May 1998. The successful development of the Coppabella Mine is based on: production of an 8.5% ash low volatile PCI coal for a growing market; the existence of a large, shallow coal deposit with an average seam thickness of about ten metres; the close proximity to rail and port infrastructure; and the modern, efficient coal preparation plant. The Coppabella Mine completed its first shipment of PCI coal on 6 November 1998 which was exported to Japan. The washing capacity of the coal handling and preparation plant is currently above 800 tonnes per hour, giving the plant an annual throughput capacity in excess of 6 million tonnes of raw coal. The thickness of seam currently being mined is 10 metres. It has 27 million tonnes of reserves as at 31 December 2020. The products of Coppabella Mine are mainly exported to Asia, Europe and Brazil.   Moorvale Coal Mine The Moorvale Mine is situated 157 km away from DBCT and 13 km south of the Coppabella Mine. The strategic strengths of the Moorvale Mine include: its proximity to the rail corridor and port; relatively low operating and capital costs; and flexibility to produce: - an 9% ash low volatile PCI coal; - 13% to 17% ash thermal coal; and, - an 8% ash coking coal. The development of the Moorvale Mine from a greenfields project to a coal production project was completed in just 12 months after granting the mining leases on 5 December 2002. The overburden removal commenced shortly afterwards. Uncovering coal began in March 2003. The Moorvale Mine completed its first shipment of export coal on 6 December 2003. The washing capacity of the coal handling and preparation plant is currently 600 tonnes per hour, giving the plant an annual throughput capacity in excess of 3.4 million tonnes of raw coal. The thickness of seam currently being mined is approximately 9 metres. It has 7.26 million tonnes of reserves as at 31 December 2020.

Updated: 30 April 2021

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