questions for md at tuesdays meeting, page-8

First of all, I was able to spend a significant time talking to both Carl Moser & Ross Johnston(project manager)

Carl spoke of their partnership with ABS, the presentation to be done in the Middle East at the end of this month & MOU timing end of October & handed over to Ross to give an overview of the project.

Ross Johnston is a passionate steel man. 44 years most with BHP at Port Kembla? & I was very impressed with his knowledge & how much planning has been undertaken & how advanced this project is. As they have said their EIS is over 50% complete & Ross has been coming to Gladstone since 2006.

He outlined that through his time with BHP & studies with Boulder that Austraila & Brasil are the most cost effective countries in the world to produce bloom & billet steel (close to raw materials, Gladstone has most of it nearby, iron ore to initialy come from WA) & were able to convince Saudis to build this plant in Aus. & not the Middle East. Had 5 sites in GSDA to choose from.

Thier production costs will be in the lowers 20% of world produces & so will break even in any downturns.

Stage 2 engineering is underway through Worley Parsons (rep also there today) & os 60-70% complete.

Stanwell Corp is to build the cogen project next door.

I was impressed that they will be using knowm & provent technolegy that can be seen in use around the world.

Main waste product is slag, Aust. imports 3mil tonnes of it, so it will be easely exported & used by cement manufacture's in Gladstone & Aust.

The Saudi's are keen & have very tight project milestones, EIS completed by the end of this year & approved by mid 2010 earth works 3rd q 2010.

From next week they will have a stand alone web site for this project & fogot to ask when they willl open an office in Gladstone.

Contracts & MOU in end of Oct will be the big milestone that will see the odds of this project go beond 50%, prob to 60%, so at present we are below 50%. EIS approval next year 75-80%.

QLD gov. very supportive now, have put their top DIP man on the project 2 weeks ago. Keen to see new jobs & clean power generation.

EU investors very keen to see share price recover to where they invested a few years ago.

All in all very impressed, things could come together quiet quickly from hear.

All the best , sorry about the spelling