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HIGHLIGHTS MARCH 2006 QUARTERLY REPORT

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HIGHLIGHTS MARCH 2006 QUARTERLY REPORT Powered By Docstoc
					MARCH 2006
QUARTERLY REPORT


HIGHLIGHTS

      Sales annual sales of 5.0 million tonnes, up 30% sales previous year
     Record on track to exceed 4.5 million tonne annualon thetarget
         Coking coal production for supply of trial cargoes commenced at Moorvale Mine
         Moorvale West coking coal project now at JORC Resource status comprising 68
         million tonnes of Indicated Resources and 54 million tonnes of Inferred Resources




SALES


 MACARTHUR COAL'S ATTRIBUTABLE SALES - COPPABELLA & MOORVALE MINES (73.3%)


                                                                   Actual - Quarter              Actual - Year to Date
                                                            Mar-06     Mar-05     % Var       Mar-06    Mar-05     % Var
                                                            000s        000s                  000s       000s

 Coppabella (excl. sale of purchased coal)         tonnes     750.4       751.0       -0.1%   2,209.1    2,449.8       -9.8%
 Moorvale     (excl. sale of purchased coal)       tonnes     535.6       490.8       9.1%    1,459.4    1,318.0       10.7%

 Total                                             tonnes   1,285.9     1,241.8       3.6%    3,668.6    3,767.8       -2.6%




Third quarter sales performance was positive and remains on track to exceed the 4.5 million tonne annual sales target.

Shipments of low volatile PCI coal have recovered relative to the December 2005 quarter due to a lift in customer
performance.

Steel prices have risen during the March 2006 quarter following an extended period of destocking and oversupply in the
second half of calendar year 2005. Pig iron production has also shown solid signs of recovery. Chinese supply and
demand is becoming more evenly balanced.

Macarthur Coal's negotiations for the 2006 contract year (commencing on 1 April 2006) are virtually complete. The
average price for low volatile PCI coal has declined by approximately 30%.

Net Profit after Tax guidance for the year ending 30 June 2006 remains in the range of $140 million to $155 million.

Production of a coking coal product has commenced at Moorvale Mine. Macarthur Coal is progressing negotiations and
deliveries of coking coal trial cargoes to potential customers.

Thermal coal production has increased to approximately 40% of total production at Moorvale Mine as a result of
producing a coking coal product.
PRODUCTION

      MACARTHUR COAL'S ATTRIBUTABLE PRODUCTION - COPPABELLA & MOORVALE MINES (73.3%)


                                                               Actual - Quarter                   Actual - Year to Date
                                                      Mar-06         Mar-05       % Var      Mar-06        Mar-05         % Var
                                                       000s           000s                    000s          000s
  Overburden Removed
  Coppabella                                 bcm         7,718.2        9,994.6    -22.8%      23,847.7      29,312.8      -18.6%
  Moorvale                                   bcm         2,136.9        2,377.3    -10.1%       6,652.3       6,399.0       4.0%

  Total                                      bcm         9,855.1       12,372.0    -20.3%      30,500.0      35,711.8     -14.6%
  Run of Mine Coal Production
  Coppabella                                tonnes         658.0        1,189.2    -44.7%       2,417.8       3,395.4      -28.8%
  Moorvale                                  tonnes         652.6         642.1      1.6%        1,918.6       2,016.1       -4.8%

  Total                                     tonnes       1,310.6        1,831.3    -28.4%       4,336.4       5,411.5     -19.9%
  Saleable Coal Production
  Coppabella                                tonnes         677.3         819.0     -17.3%       2,227.7       2,542.7      -12.4%
  Moorvale                                  tonnes         591.9         392.5     50.8%        1,532.8       1,301.6      17.8%

  Total                                     tonnes       1,269.2        1,211.5     4.8%        3,760.5       3,844.3      -2.2%




Year to date saleable coal production of 3.76 million tonnes equates to an annualised rate of 5 million tonnes.

The Moorvale Mine has again performed strongly during the quarter with run of mine production and saleable coal
production rates exceeding levels achieved during the corresponding period in 2005.

As anticipated, overburden removal rates at Coppabella Mine were lower than the corresponding quarter in 2005 due to:

   the dragline and an excavator being removed from service early in the quarter for major maintenance
   loss of an excavator extensively damaged in December 2005 as signalled in the December 2005 quarterly report.

Overburden removal rates are expected to be normalised in the June 2006 quarter, following the commissioning in late
March of a new excavator, replacing the damaged excavator, and completion of the major maintenance work on the
dragline and other excavator.

Operations at the Coppabella Mine were also impacted by a low wall slip in the South Pit onto a 400,000 tonne block of
coal. The slip resulted from a geological fault running parallel to the highwall. Measures to mitigate further slippage
have been undertaken.

Achievement of the saleable coal production target of 4.5 million tonnes for the financial year is expected to be
achieved, resulting in the depletion of run of mine stocks.

Health and Safety Performance

The Lost Time Injury Frequency Rates (LTIFR) for the Coppabella and Moorvale mines, as a twelve month rolling
average from 1 April 2005 to 31 March 2006, were:

   Coppabella Mine– 2.14
   Moorvale Mine – 2.93

The state average LTIFR for open cut coal mines for year ended June 2005 was 3.1.
Environmental Performance

In the three months to 31 March 2006, no reportable environmental issues occurred at Macarthur Coal's mining
operations.


INFRASTRUCTURE

Water

Recent rain has partially filled mine site dams at Coppabella and Moorvale mines, easing the tight water supply situation
at both sites.

Construction of the Eastern Spur Pipeline (from Moranbah to Coppabella Mine) is underway and on schedule to provide
water from Eungella Dam by mid 2006, adding to the temporary supply from Eungella Dam made available by another
mining company.

Construction of the Burdekin to Moranbah pipeline is also in progress. It is expected that Macarthur Coal will commence
drawing some of its water allocation from the Burdekin Falls Dam from early 2007 with full supply becoming available
from mid 2007, following completion of supporting power infrastructure.

Macarthur Coal maintains the Bacchus Downs grazing property as a contingency water supply until the full Burdekin Dam
supply is in place. The Development Permit from Broadsound Shire Council and all other necessary approvals have now
been obtained to enable supply of water from Bacchus Downs if required.

Ports

Increased sales remain constrained by limitations on port entitlement at the Dalrymple Bay Coal Terminal (DBCT).
During the quarter, Macarthur Coal resumed export of coal through Abbot Point Coal Terminal to supplement its DBCT
allocation.

The DBCT expansion is progressing on schedule and is expected to increase Macarthur Coal’s current 4.4Mtpa allocation
with an additional 0.7 Mtpa from September 2007 and a further 3.7 Mtpa from September 2008.

Rail

Queensland Rail (QR) has suspended its legal action against the Queensland Competition Authority (QCA) in relation to
the QCA’s rejection of QR's Draft Access Undertaking. The Draft Access Undertaking sets out the general terms and
conditions for the negotiation of access arrangements and also contains reference tariffs for coal train services in central
Queensland.

Recent negotiations between QR, QCA and the coal industry have enabled agreement of a framework to be developed to
resolve issues with the Draft Access Agreement. QR is now seeking finalisation of a revised Access Undertaking in
consultation with rail system users for submission to the QCA by the end of April 2006.


PROJECT PIPELINE

Olive Downs Project

The grant of the mining lease is expected to occur in the September 2006 quarter, allowing development of the mine to
then commence. Detailed planning for the mining operation is in progress with mining scheduled to commence in the
December 2006 quarter.

Moorvale West and Moorvale Underground Projects

Slimcore drilling on a 1,000 metre grid and testing for the Moorvale West and Moorvale Underground projects occurred
during the quarter. Drilling work will continue on a 500 metre grid during the June 2006 quarter.
Work has also commenced on the environmental studies that will form part of the mining lease application for Moorvale
West.

2D seismic survey traversing the Moorvale Underground area was undertaken and design of a 3D seismic survey layout
over the initial mining areas for the Moorvale West and Moorvale Underground projects was completed.

The 3D seismic survey of the Moorvale West and Moorvale underground sites is scheduled for the June 2006 quarter.

An initial JORC raw coal Resource for Moorvale West has been calculated and is set out in the following table.

                                                                         Million tonnes at 6% moisture
 Depth                      Measured              Indicated              Inferred              TOTAL
 <100m                           2.63                  0.6                    0                  3.23
 100 - 150m                      5.11                  0.8                    0                  5.91
 150 - 300m                      2.14                 50.0                   26                  78.14
 300 - 450m                      0.00                 17.1                   28                  45.10

 TOTAL                          9.88                  68.5                   54                132.38

A Resource Statement for the Moorvale Underground is expected to be available by June 2006.

The information in this report that relates to Mineral Resources at Moorvale West is derived in part from geological modelling by Greg Jones BSc (Hons)
MAusIMM, MAIG with information compiled by Lance Grimstone BSc (Hons) (Geol), Grad Dipl Mngt, FAus IMM, CPGeo, MMICA.

Greg Jones is employed by JB Mining Services Pty Ltd (ABN 99 050 708 596) and Lance Grimstone is employed by Lance Grimstone & Associates
(Consulting) Pty Ltd (ABN 23 114 977 829).

Greg Jones and Lance Grimstone have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to
the activity which they are undertaking to qualify as Competent Persons as defined in the 2004 edition of the Australasian Code of Reporting of Mineral
Resources and Ore Reserves.

Greg Jones and Lance Grimstone consent to the inclusion in the report of the matters based on the information in the form and context in which it
appears.


Exploration Expenditure

Exploration expenditure incurred by Macarthur Coal during the March 2006 quarter was $611,900.


OTHER ISSUES

Foreign Exchange Contracts

The value of foreign exchange contracts held at 31 March 2006 was:


                                                                                       A$ Unrealised loss
     Period covered by FX                                           FX rate             based on A$:US$
                                        US dollar value
       Hedge Contracts                                           A$1.00 = US$             spot rate of
                                                                                            $0.715*


  Apr 06 to Jun 06                             69,478,388                    0.728                (1,724,332)
  Jul 06 to Jun 07                            177,924,064                    0.737                (7,419,457)
  Jul 07 to Jun 08                             11,096,500                    0.759                  (904,670)
  Total                                    258,498,952                      0.735             (10,048,459)

  * A$:US$ spot rate as at 31 March 2006
Awards

Macarthur Coal is proud to confirm that during the March 2006 quarter, Chief Executive Officer, Ken Talbot, received the
2005/2006 Australian Export Hero Award, awarded by the Advisory Council of the Australian Export Heroes Awards and
the Board of the Australian Institute of Export.

Organisational Changes

Macarthur Coal has made the following changes:

   Shane Stephan has been appointed Vice President – Open Cut Production with responsibility for Coppabella,
   Moorvale and Olive Downs mines
   Brett Garland has been appointed Vice President – Underground Mine Development with responsibility for
   development and operation of Moorvale West and Moorvale underground projects and continuing responsibility for
   mining systems and innovation
   Ian McAleese has been appointed Vice President – Corporate Development.
MACARTHUR COAL TENEMENTS
                                                CORPORATE INFORMATION
                                                Directors
                                                Hon. Keith De Lacy               Chairman
                                                Roger Marshall, OBE              Deputy Chairman
                                                Ken Talbot                       Managing Director & Chief Executive Officer
                                                Don Nissen                       Director
                                                Peter Forbes                     Director

                                                Company Secretary
                                                Bob Adams

                                                Registered Office
                                                Level 18, 215 Adelaide Street
                                                Brisbane Qld 4000

                                                Telephone:            07 3221 7210
                                                E-mail:               info@macarthurcoal.com.au
                                                Facsimile:            07 3229 1776
                                                Website:              www.macarthurcoal.com.au

                                                Mailing Address
                                                PO Box 7146
                                                Riverside Centre QLD 4001

                                                Contacts

                                                Ian McAleese          Vice President - Corporate Development




                                                 Substantial Shareholders as at 31 March 2006


                                                                                             % of Issued
                                                                    Name
                                                                                               Shares
Shareholder Enquiries
Computershare Investor Services Pty Limited       Ken Talbot and related parties                     36.04
Level 19, CPA Building                            CITIC Australia Coal Pty Ltd                       10.41
307 Queen Street
                                                  Sprott Asset Management Inc                         6.08
Brisbane QLD 4000
Telephone:           1300 552 270                 Asset Value Investors                               5.75
Website:             www.computershare.com.au

                                                 Number of ordinary shares on issue:            184,352,950

                                                 ASX Code
                                                 Ordinary shares:                   MCC

				
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Description: HIGHLIGHTS MARCH 2006 QUARTERLY REPORT