Estimates of coal reserves are produced in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, December 2004 ("JORC Code"). The JORC Code requires that coal reserves are underpinned by either a reasonable or high level of confidence in the deposit knowledge, technically feasible to mine and process, economic to mine using reasonable projected long term commodity prices and licences to allow extraction have been or can be obtained.

Coal reserves and resources in this report are based on information compiled by competent persons (as defined by the JORC Code) who are full time employees of RTCA. The relevant competent persons consent to the inclusion in this report of information they have provided in the form and context in which it appears.

The coal reserves and resources shown in the tables below are on a 100 per cent basis. The table on page 33 sets out Coal & Allied's percentage interest in the deposits.

Coal reserves

The estimated coal reserve figures in the following table are as of 31 December 2008, with summary data for 2007 shown for comparison. Metric units are used throughout.

(1) All mining methods are open cut.
(2) Coal type: SC = steam/thermal coal; MC = metallurgical/semi-soft coking coal.
(3) Coal reserves and marketable coal reserves are both shown. The yield factors shown reflect the impact of further processing, where necessary, to provide marketable coal.
(4) Gross calorific value and sulphur content are quoted on an "Air Dried" moisture basis and have been determined according to Australian Standards (AS). MJ/kg = megajoules per kilogram.

Significant changes to reserves
(a) Hunter Valley Operations - after allowing for current year production related depletion, an increase of 31.9mt due to the conversion of the "Deep Cheshunt" Resources to Reserves.
(b) Warkworth - after allowing for current year production related depletion, an increase of 36.3mt due to a complete review of Reserves, which included a reassessment of the economic assumptions applied to the deposit.

Coal resources

The following table contains details of the other mineralisation that has the potential to be extracted in the future but which is not yet classified as proved or probable reserves. This material is defined as mineral resources under the JORC Code. Estimates of such material are based largely on geological information with only preliminary consideration of mining, economic and other factors. While in the judgement of the competent persons there are reasonable expectations that some of the mineral resources will eventually become proved or probable reserves and subsequently be mined, there is no guarantee that this will occur as the result depends on further technical and economic studies and prevailing economic conditions in the future. Resources are stated as additional to the reserves reported on page 32.

Coal resources are based on information compiled by competent persons (as defined by the JORC Code), who are full time employees of RTCA. The person has had a minimum of five years relevant estimation experience and is a member of a recognised professional body whose members are bound by a professional code of ethics. The competent persons consent to the inclusion in this report of information they have provided in the form and context in which it appears.

Significant changes to resources
(a) Hunter Valley Operations - a decrease of 61mt due to the conversion of the "Deep Cheshunt" Resources to Reserves.
(b) Warkworth - an increase of 180.5mt due to a complete review of Resources, which included a reassessment of the economic assumptions applied to the deposit.
(c) Maules Creek - a decrease of 282.2mt due to a complete review of Resources, which included a reassessment of the economic assumptions applied to the deposit.