The need for expansion at DBCT arises when the terminal Users contract additional terminal capacity resulting from increased world demand for Bowen Basin coal. The current User enquiry shows potential terminal capacity requirements for 64 Mtpa in Financial Year (FY) 2005/06 rising to potentially 88 Mtpa in 2008/09.

Due to the surging world demand for coal produced from Queensland's Bowen Basin region, BBI (DBCT) Management Pty Ltd has received a number of firm requests for increased terminal capacity (above current contracts), which exceed the current capacity of DBCT. These requests are evidenced by the heavy shipping arrivals over February, March and April 2005, which have stressed the capacity of the supply chain causing port congestion (resulting when ship arrivals exceed the contracted port capacity of 56.82 Mtpa and exacerbated by the inability of the coal supply chain to deliver more than 52 Mtpa to the terminal).

BBI (DBCT) Management Pty Ltd does not consider that the additional capacity requirements of the existing terminal Users and New Access seekers can be handled by the terminal with its current capacity rated at 56 Mtpa (excluding the loss of RL1) without increasing demurrage costs. Accordingly, BBI (DBCT) Management Pty Ltd acknowledges its obligation to expand the capacity of the terminal to accommodate the increase in demand for terminal capacity.

BBI (DBCT) Management Pty Ltd is currently comfortable (provided that enquiry levels materialise into signed contracts) that the sustainable level of demand will be accommodated by an expansion of the terminal to 85 Mtpa.

This magnitude of expansion needs to feature the following:

• maintenance of existing service levels (as this was strongly endorsed by the Users);
• a terminal configuration that takes maximum advantage of the stockyard footprints. Higher capacity stockpile volumes in rows 4, 5, 6 & 7 have been able to be achieved through trapezoidal stockpiles;
• a terminal layout that is now balanced in terms of stacking and reclaiming capability. There is no longer any inloading/outloading conflict and each row has a high capacity machine;
• the stockyard has high levels of symmetry - an important consideration in the operations planning process;
• delivery of the capacity at the earliest time - between August 2008 and February 2009 (dependent on the EIS duration) for all three Phases;
• the 3 Phase development plan ensures longer term expansions are not "locked out", and production downtime during implementation is minimised;
• availability of an interim capacity milestone of up to 68 Mtpa by July 2007;
• the option of a third Phase delivering around 5 Mtpa additional overall capacity, which can be exercised at any time, warranted by demand, up to May 2006 (with capacity realised after 24 months' construction).

In summary, the throughput projections and analysis of User demand indicate that the current DBCT infrastructure will likely come under increasing operational pressure until significant additional capacity is realised.

Under all scenarios, depending on the timing of the next capital expansion, it is evident that the terminal may have to operate at more than Net Operating Capacity (NOC) during peak periods until additional infrastructure is developed.

• World demand for premium coking coal.
• Australia's unique position.
• Significant contributor to export income.
• DBCT Users (comprising several of the largest mineral houses in the world) have expansion plans that capitalise on the current high demand and record prices.
• DBCT is responding to this by planning to match the terminal's ability to ship to worldwide customers.
• The demand is likely to continue into the forseeable future.