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Severe geological conditions in the underground operations prompted Cumnock Coal Limited, majority owned by Xstrata to adopt a new interim mine plan in September 2002. Since then, a drilling programme has been completed to assess the long-term viability of the mine plan. The Company expects to complete its analyse of the results shortly.

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Reporting on the December quarter, Cumnock Coal Limited said in the three months ended December 2002 the longwall produced 403,954t while production for the 12 month period totalled 2.017Mt.

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Five days of production were lost in the three month period due to industrial action, which lowered total run-of-mine underground coal by 4% compared with the prior corresponding period. Workers were protesting redundancies brought about by the introduction of the new interim mine plan which has reduced manning requirements.

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Mining meanwhile commenced in the Open Cut in November with first coal being extracted in December.

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Total underground coal mined for the twelve months ended 31 December 2002 was 6% higher than the prior corresponding period, with saleable production also up 1%. Washery yield was down by 3% due to the poorer quality of feed material, which in turn reflected the more difficult mining conditions.