Excel Coal Limited Presentation to the Sydney Mining Club July 2004

1. Excel Coal LimitedPresentation to the Sydney Mining ClubJuly 2004

2. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

3. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

4. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

5. The Dragon Awakes • China has 1.3 billion people…20% of global population…striving for better living standards; • China currently contributes only 5% of global GDP but contributes…25% of global GDP growth…25% of global demand for commodities…50% of growth in global demand for commodities; • China’s growth has only just begun…..consumer demand, particularly for cars and real estate, will continue to fuel growth….car ownership is still only 5%. This will drive growth in demand for steel (coking coal and coke), cement and energy (thermal coal); • China’s steel demand has grown at >20% pa since 2000….now c.225 Mtpa….more than twice the size of either Japan or the USA…..forecast to be >400 Mtpa by 2010…largest steel producer…largest steel consumer…largest steel importer; • Steel demand being met by new capacity in China and imports from Japan, Korea and Taiwan…all traditional markets for Australian coking coal; • Access to imported steel-making raw materials a key strategic issue for China; • China’s demand for energy also booming….massive investment in coal fired power plants requiring new thermal coal production capacity of 300-400 Mtpa over the next five years…..China’s ability to export thermal coal likely to remain constrained.

6. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

7. Export Coal Markets Overview Growth in Global Coal Import Demand (Mt) • Global demand for imported coal will continue to grow rapidly due to increasing demand for steel and energy, particularly in China, India and other developing Asian countries • Australia will continue to dominate seaborne coal trade due to the quality of its coals, favourable geology, proximity of large resources close to tidewater, highly productive mines, established infrastructure and political stability • Consolidation of ownership of coal production capacity by large, experienced companies means development of new sources of supply is expected to be more measured Source: Barlow Jonker.

8. Coking Coal Market Overview Seaborne Coking Coal Trade • Export coking coal traditionally a slow-growth market, but with limited supply sources; • Export coking coal markets set to grow more rapidly than the past – driven by growth in steel demand in China and India; • Coking coal will remain relatively scarce. Supply is concentrated in developed countries, Australia, Canada and USA • Australia’s favourable geology, high quality coal, proximity to ports and highly productive mines provide natural advantages Source: Barlow Jonker.

9. Coking Coal Prices

10. Thermal Coal Market Overview Seaborne Thermal Coal Trade • Export thermal coal traditionally a rapidly growing market, but with abundant and widely dispersed supply sources; • Export thermal coal markets are set to continue to grow very rapidly – coal is by far the lowest cost fuel for electricity generation globally • Demand growth driven by energy demand growth in China, India and other Asian developing countries • Thermal coal remains abundant and widely dispersed around the world, with strong export competition from developing countries • Australia’s favourable geology, high quality coal, proximity to ports and highly productive mines provide natural advantages, but competition is fierce Source: Barlow Jonker.

11. Thermal Coal Prices

12. Favourable Coal Market Dynamics • Demand • Global demand for export coking and thermal coals growing strongly…concerns over slow-down in China exaggerated…enormous momentum remains…India following; • Domestic NSW power consumption growing, demand for coal continuing to increase; • Supply • No obvious over-supply potential from new coking coal mine developments; • China export thermal coal constrained by internal demand…Japan, Korea and Taiwan have turned back to Australia as a long-term reliable supplier; • Global bulk commodity supply infrastructure…rail, ports, ships…under strain. This will limit new thermal coal supply over the next two years or so; • Numerous new thermal coal mine developments possible, but consolidation of coal production ownership provides a more disciplined market with more rational investment; • Current Markets • Export coking coal market strong, spot price >US$120/t vs FY2005 contract of ~US$60/t, Export thermal coal market strong, spot price >US$60/t vs FY2005 contract of ~US$45/t;

13. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

14. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

15. Diversified, Quality Assets and Earnings • Very large reserve base…351 Mt reserves…1,350 Mt resources; • Three established, fully capitalised operating mines; • Strong operating and management team, excellent track record; • Income and cashflow risks diversified: • Mining risk – 3 operations, OC, LW, B&P, plus ICC; • Market risk – Export coking & thermal, domestic coal and export coke; • Logistics risk – exporting from PWCS and PKCT, plus domestic; • Track record of superior shareholder returns.

16. Excel Coal’s Strategy For Profitable Growth Create Shareholder Value Acquisition Growth Opportunities • Identify value-adding opportunities • Active, hands-on management of ; development, re-engineering, & operation. • Systematically identify and reduce business risks • Value-add by applying intellectual capital and appropriately leveraged financial capital • Underperforming assets • Assets requiring intensive management / re-engineering • Sensitive vendors that require creative “win-win” outcomes • Majors selling “non-core” assets • Greenfield developments We focus on opportunities in the coal sector where our expertise and competencies are

17. Experienced, Hands-On Directors • Over 200 years cumulative relevant experience • Proven track record of value creation • Ownership by directors:59% post IPO – our interests are closely aligned with other shareholders

18. Excel Coal’s Major Assets • Wilpinjong (100% interest) • Coal Type: Thermal • Marketable Reserves: 191Mt • Yield: 74.2% • Current annual sales: nil • % Export: Up to 20% • Commissioning: 2007f • Life > 20 yrs • Wambo (75% interest – capital; 56.3% – profit) • Coal Type: Thermal • Marketable Reserves: 117Mt • Yield: 65.8% (opencut); 76.1% (underground) • Current annual sales: 3.0Mt • % Export: 100% • Remaining life = 20yrs • Chain Valley (72% interest) • Coal Type: Thermal • Marketable Reserves: 3Mt • Yield: 74.2% • Current annual sales: 0.4Mt • % Export: 50% • Remaining life = 7 yrs • Metropolitan (100% interest) • Coal Type: Hard coking, semi-hard coking coal • Marketable Reserves: 40Mt • Yield: 80.9% • Current annual sales: 1.3Mt • % Export: 97% • Remaining life > 20 yrs • Illawarra Coke (50% interest) • Type: Coke • Current annual sales: 0.24Mt • % Export: 100%

19. Wambo’s Overburden Fleet

20. Wambo’s Overburden Fleet

21. Roche’s Coal Mining Fleet

22. Wambo Coal Leaving Mt. Thorley

23. Excel Coal’s Major Assets • Wilpinjong (100% interest) • Coal Type: Thermal • Marketable Reserves: 191Mt • Yield: 74.2% • Current annual sales: nil • % Export: Up to 20% • Commissioning: 2007f • Life > 20 yrs • Wambo (75% interest – capital; 56.3% – profit) • Coal Type: Thermal • Marketable Reserves: 117Mt • Yield: 65.8% (opencut); 76.1% (underground) • Current annual sales: 3.0Mt • % Export: 100% • Remaining life = 20yrs • Chain Valley (72% interest) • Coal Type: Thermal • Marketable Reserves: 3Mt • Yield: 74.2% • Current annual sales: 0.4Mt • % Export: 50% • Remaining life = 7 yrs • Metropolitan (100% interest) • Coal Type: Hard coking, semi-hard coking coal • Marketable Reserves: 40Mt • Yield: 80.9% • Current annual sales: 1.3Mt • % Export: 97% • Remaining life > 20 yrs • Illawarra Coke (50% interest) • Type: Coke • Current annual sales: 0.24Mt • % Export: 100%

24. Metropolitan’s Longwall

25. Metropolitan’s Longwall

26. Metropolitan Coking Coal - we really are sold out !

27. Excel Coal’s Major Assets • Wilpinjong (100% interest) • Coal Type: Thermal • Marketable Reserves: 191Mt • Yield: 74.2% • Current annual sales: nil • % Export: Up to 20% • Commissioning: 2007f • Life > 20 yrs • Wambo (75% interest – capital; 56.3% – profit) • Coal Type: Thermal • Marketable Reserves: 117Mt • Yield: 65.8% (opencut); 76.1% (underground) • Current annual sales: 3.0Mt • % Export: 100% • Remaining life = 20yrs • Chain Valley (72% interest) • Coal Type: Thermal • Marketable Reserves: 3Mt • Yield: 74.2% • Current annual sales: 0.4Mt • % Export: 50% • Remaining life = 7 yrs • Metropolitan (100% interest) • Coal Type: Hard coking, semi-hard coking coal • Marketable Reserves: 40Mt • Yield: 80.9% • Current annual sales: 1.3Mt • % Export: 97% • Remaining life > 20 yrs • Illawarra Coke (50% interest) • Type: Coke • Current annual sales: 0.24Mt • % Export: 100%

28. Chain Valley has Substantial Infrastructure Source:

29. Chain Valley is Next Door to Vales Point Power Station Source:

30. Excel’s Other Existing Assets • Illawarra Coke (50%) • Two coke plants located on the South coast of NSW • C. 240,000 tpa of metallurgical and foundry coke for major steel producers and industrial consumers globally • Close proximity to PKCT provides good access to international markets • Cosila Project (31%) • Venezuelan government approved coal project • Resources (not JORC compliant) of c. 30M ROM tonnes of high quality thermal coal • Options are being considered that would deliver c. 2 mtpa for 15 years • Excel’s share of development capital will be financed by 3rd party equity and project finance • Crumlin Prospect (50%) • Large lignite (brown coal) prospect in Northern Ireland • Development is not expected in the near term

31. Coalcliff Coke Ovens

32. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

33. Our Existing Business has Embedded Growth • Wambo expansion; • Wilpinjong development; • Metropolitan expansion; • Chain valley expansion; • Low capital cost of expansion…average ~A$20/tpa • Other acquisitions/new projects

34. Expand open cut to 5 Mtpa saleable by 2007 with new truck/excavator fleet (leasing) 2-stage CHPP upgrade to >8 Mtpa saleable (debt & cashflow) Develop new 2 Mtpa saleable longwall mines in Wambo, Whybrow, Arrowfield and Bowfield seams. Wambo Expansion Plan Rail Link Development Mine Expansion 0, 61, 110 65, 172, 223 122, 28, 61 Eliminate transport bottleneck and reduce costs by >$2/t Increase salesfrom 3 to 8 Mtpa 164, 188, 205 64, 103, 129 • Approximately 15km of new rail between Wambo and MTCL • Build new coal reclaim and train loading infrastructure • Estimated capex: $44m funded by debt & cashflow

35. Wilpinjong Development Plan • Excel won Wilpinjong in open tender in December 2003; • Saleable reserves of 153 Mt of domestic coal and 37 Mt of export thermal coal; • Contract signed with MacGen for up to 7 Mtpa for 19 years from 2007; • Thiess contracted to build a new opencut mine to produce up to 10 Mtpa of thermal coal…up to 7 Mtpa for MacGen, plus • Other NSW electricity generators • Export market (up to 20% of the resource) • Thiess/Sedgman to build new coal handling and preparation plant to produce up to 10 Mtpa; • Thiess to also build new 4 km rail loop and coal loading facility;

36. Metropolitan Expansion Plan • Longwall face extended from 135 metres to 158 metres during May longwall change; • Drift upgrade underway and will be commissioned during next LW change in February 2005; • Target to increase production to 1.5 Mtpa saleable during FY 2005 with further increases towards 1.8 Mtpa saleable thereafter; • Move to the central area expected in 2008-9, with longer panels providing further opportunity for productivity gains;

37. Metropolitan Long Term Mine Plan Source:

38. Chain Valley Expansion Plan • Chain Valley will double production capacity to around 700,000 tonnes per year by installing a second continuous miner, bolter and ancillary bord and pillar mining equipment over the next few months; • This has allowed Chain Valley to secure two-year, fixed price US$ export contracts for up to 600,000 tonnes; • Production will ramp up to around 600,000 tonnes per year by Christmas, with increases beyond that level dependent on further optimising the mine plan in 2005; • Following implementation of the production increases, Chain Valley will look carefully at the potential to develop its Fassifern Seam resources which lie some 30 metres below current workings.

39. Embedded Growth in Excel’s Existing Assets

40. Agenda • Coal Markets • The China Factor • Favourable Coal Market Dynamics • Excel Coal Limited • Existing Business • Growth Plans • Prospectus Forecasts • Quarterly Update

41. Prospectus Forecast Financial Performance

42. Prospectus Forecast Financial Position • Strong Balance Sheet • Low gearing – less than $20m net debt post-IPO • Expansion and development plans to be funded through borrowings, leases, cashflow from operations and cash reserves; • No new equity expected to be needed to fund embedded growth; • Attractive Dividend Yield • Track record of dividend growth • Fully franked dividend of 4.4 cents/share in October (for 6 mths to 30 June 2004) • Fully franked dividend of 12.0 cents/share for FY2005 (to be paid in April and October 2005) • Expected fully franked yield of 6.0% based on $2.00 IPO share price • Ongoing payout ratio of 40-60%

43. Quarterly Update • Highlights • Strong sales and production performance for the three month period ending 31 March 2004 and for the nine months to date; • Operations on track to achieve planned sales and production for the financial year ending 30th June 2004 (FY 2004); • Higher coal prices generating better than planned margins in FY 2004….Excel now expects to exceed forecast profit; • Most coal prices fixed for FY 2005 at levels higher than forecast in the Prospectus. Average of 10% higher prices; • NSW royalty changes expected to have negative impact of A$4m on Net Profit in FY 2005

44. Quarterly Update – Revised Coal Price Forecasts Average expected price ~10% above Prospectus

45. Where to from Here ?? • Immediate Priorities • Deliver Prospectus forecasts; • Deliver embedded growth plans; • Seek new acquisitions and greenfield development projects using the same criteria for profitable growth which have succeeded so far; • Medium Term Objectives • Since its founding in 1993, Excel equity has grown from zero to current market capitalisation approaching $500m; • We see no reason why Excel cannot continue to grow rapidly; but • Size is not the driver, growth in shareholder value is.