RNS Number:8497P
Portman Ld
17 September 2003



                  Attention ASX Company Announcements Platform

                           Lodgement of Open Briefing


Portman Limited
Level 11, The Quadrant
1 William Street
Perth  WA  6001

Date of lodgement:   17-Sep-2003

               Title:   Open Briefing. Portman. MD on Expansion Update



Record of interview:



corporatefile.com.au
Portman Limited's expansion into the Northern Tenements at Koolyanobbing has
been delayed by regulatory approvals until recently. Can you recap what you've
achieved over the current year?



MD Barry Eldridge

In April we received Western Australian state government approval, which was a
considerable achievement given that in December last year the state's
Environmental Protection Authority (EPA) released an adverse recommendation on
mining the Northern Tenements. The state government's approval in April took
into account not only the environmental issues but also social and economic
issues. Then in early September, we received final environmental approval from
the federal government. We now have all the necessary approvals to proceed with
the development of the Northern Tenements.



corporatefile.com.au
You're yet to put a mining plan around the resource at the Northern Tenements
but can you estimate the size of recoverable iron ore resources there? Do you
know how the quality of the resource might be affected, given you have
restricted access to a portion of that resource?





MD Barry Eldridge

The total resources at the Northern Tenements are 115.8 million tonnes, which
are principally in the inferred and indicated category. The amount of those
resources that will be converted into the reserve category with further work is
unknown at present. But there's no doubt that as we've continued mining at
Koolyanobbing without gaining access to the resources in the Northern Tenements,
there'll be some resources that will be sterilised simply because we won't have
the ore to blend with them. We need to do a lot more drilling and subsequent
mine planning to determine what the final reserves from the Northern Tenement
deposits will be.



There are currently eight deposits in the Northern Tenements, three at Mt
Jackson and five at Windarling, and they're all slightly different in terms of
iron grade and impurity levels. At this stage, preliminary mine planning
indicates we'll maintain our current quality specifications.



corporatefile.com.au
Portman has reported promising intersections from exploration around the
Koolyanobbing area. Although it's still early, what reserve upside might result
from this exploration?



MD Barry Eldridge

Exploration around Koolyanobbing has concentrated on targets adjacent to
existing infrastructure, which has resulted in some success at both C and B
deposits. At C, we increased the resource by 4.4 million tonnes whilst
increasing the overall quality of the ore by marginally improving iron grade and
reducing the level of phosphorous. At B, we're in the process of completing a
resource estimate and should be in position to make an announcement in the next
couple of weeks.



In terms of reserve upside, it's still early days and we need to do more work to
determine the likely reserves from both B and C deposits.



corporatefile.com.au
Now that you have access to the Northern Tenements, what exploration is planned
and how prospective are these areas?



MD Barry Eldridge

We commenced resource definition drilling at the Northern Tenements about a
month ago and will continue drilling until October. We currently have three rigs
operating at Windarling. We've completed RC drilling on the W3 and W5 deposits
and are currently drilling W2. Once we've completed some resource definition
drilling at Windarling we'll move the rigs to the J2 deposit at Mt Jackson.
We're also partially through a diamond drill programme to collect core to
determine the chemical characteristics of the ore. This programme will continue
until November and following completion we'll undertake mine optimisation
studies, which should be finalised by early December.



There's certainly some prospectivity on the Northern Tenements, but it's too
early to quantify.



corporatefile.com.au
What environmental conditions have been placed on Portman as part of mining the
Northern Tenements?



MD Barry Eldridge

The most significant environmental condition relates to the W3 deposit in the
Windarling area, which contains an inferred resource of 19.1 million tonnes. The
condition relates to the Tetratheca Paynterae plant population. Initially we can
only access 30 percent of the population, which equates to about 50 percent of
the resources at W3. Then a research and management plan will be submitted and
when accepted by the minister, we can access another 20 percent of the
population, which equates to about 75 percent of the resources at W3.



In addition to the environmental conditions, we've had to provide an additional
environmental bond of $900,000 as part of the federal government approval.



corporatefile.com.au
As at 30 June 2003, Portman's net cash balance was over $63 million. What's your
forecast capital expenditure, including for developing the Northern Tenements?



MD Barry Eldridge

Forecast capital expenditure for developing the Northern Tenements is $19.5
million. Of that, the majority will be spent in the current half-year. Should we
determine we can increase production above 5.2 million tonnes a year for a
sustained period of time, and it's prudent to do so, we'll need to spend an
additional $15 million. That principally relates to additional infrastructure
requirements, including the construction of a new shed at the port of Esperance.



corporatefile.com.au
During the half year, Portman shipped 2.32 million tonnes from Koolyanobbing and
0.16 million tonnes from Cockatoo Island (Portman 50 percent share). What do you
expect for each operation in the second half and can you give longer-term
production forecasts from Koolyanobbing/Northern Tenements and Cockatoo Island?



MD Barry Eldridge

In the current half, we expect to do better than in the first half. We're
currently forecasting sales of in excess of 2.5 million tonnes from
Koolyanobbing, including sales of high phosphorous (Hi-P) fines, which should be
slightly in excess of 700,000 tonnes.



Cockatoo Island production will be lower than the first half because the
operation's being restructured. However, costs will also be significantly lower
in the second half. We're confident we'll get Cockatoo Island up to its optimum
production rate early next year.



For Koolyanobbing/Northern Tenements, it's premature to comment on an optimum
production rate. Needless to say, a base production rate would be around current
levels, but once we have information to hand from the Northern Tenements
resource definition program, we'll be in a better position to estimate the
optimum production rate of the operation going forward.



corporatefile.com.au
Portman has initiated a margin improvement program. What does it involve and
what are its objectives?



MD Barry Eldridge

The program is essentially looking at both revenue enhancement measures and cost
reduction measures. It's looking at everything we do and finding ways of doing
things smarter, enhancing productivity and reducing costs.



One objective is to strip 25 percent out of corporate overheads on an annual
basis. Another is to materially reduce our rail costs, and we're confident our
current discussions with our rail providers will achieve that.



corporatefile.com.au
Cockatoo Island performed poorly in the June half after a slip in the Stage 2
seawall and dewatering problems. What are the objectives of the technical review
you've initiated, how confident are you of finding a permanent solution to the
dewatering and seawall problems and what capital is involved?



MD Barry Eldridge

The review is looking at three key issues - the resource position, the
geo-technical position and the dewatering requirements of the operation. In
regards to the first, we've had some drilling results that indicate a small
increase in the resource. The geo-technical work we've completed to date has
also been very positive.



The key issue for Cockatoo Island is dewatering, which enables us to mine the
ore body, and we're confident we'll find a permanent solution. In terms of the
capital required, it will depend on whether we have to put down dewatering
bores. In that case, the capital requirements would be significantly greater
than if we use sumps for dewatering, as is currently the case. But, at this
stage it's looking as though sumps are the optimum way to dewater the ore body
and as such, the capital involved will be minimal.



We're reasonably confident we'll be able to ship between five and six cargoes
from Cockatoo Island during the second half of this year, which is enough to
cover costs, but we need to increase production to at least two ships a month to
make money from the operation.



In terms of the sea wall, we'll have to rectify it in Stage 2 and our share of
the capital required for that is about $1 million. Stage 2 is currently in
abeyance until the end of next month, when we complete the technical review of
Stage 1.



corporatefile.com.au
Strong Chinese demand is driving iron ore markets. What demand are you
experiencing in your other key markets such as Japan and is a potential
improvement in the US and European economies relevant to Portman's prospects?



MD Barry Eldridge

We're experiencing extremely strong demand from both Chinese and Japanese
customers. Japanese demand is driven in many ways by Chinese demand. An
improvement in the US and European economies isn't directly relevant to our
prospects because we sell all our ore into Japan or China. But world growth, and
particularly synchronised growth in the major economies, would obviously be
extremely positive for commodity markets.



corporatefile.com.au
Portman recently secured the first sales of high phosphorous fines. What
stockpile of high phosphorous fines do you hold that's previously been written
down to zero and what proportion of high phosphorous fines are mined as part of
the normal business and would otherwise be waste ore?



MD Barry Eldridge

We've got about 6.4 million tonnes of long-term Hi-P stockpiles consisting of
approximately 3.9 million tonnes of fines and 2.5 million tonnes of lump.
Approximately 60 percent of these long-term stockpiles have been written down to
zero. As we mine Koolyanobbing, we generate about 100,000 tonnes monthly of Hi-P
material of which fines production amounts to around 50,000 to 60,000 tonnes.
This production will decrease significantly when the Northern Tenement ore is
available for blending.



corporatefile.com.au
What volume of sales of high phosphorous fines can you achieve, what price
discount do these attract and can you maintain sales of high phosphorous fines
through the price cycle?



MD Barry Eldridge

This half, we'll sell about 700,000 tonnes of Hi-P fines and they attract an
approximate 15 percent discount to benchmark. How much we sell next year will
obviously depend on the market but we're confident this market will continue to
develop. Steel producers are strongly focused on input costs, so if they can use
this material and not have a problem in regards to steel product quality, it's
likely these ore types will become a permanent part of their blend.



corporatefile.com.au
Portman maintained a 4 cent interim dividend (franked at 50 percent) for the
half year to June 2003. What do you plan to do with your cash balance and what
broader capital management issues do you have?



MD Barry Eldridge

Clearly, we have some capital requirements for the Northern Tenements, and to a
lesser extent Cockatoo Island, in this half. Once we determine exactly what
those capital requirements are, and in particular the incremental capital
required for the Northern Tenements, we'll be in a position to determine exactly
what our surplus capital will be. The board will then be able to look at the
most appropriate method of distributing that surplus capital to shareholders.



corporatefile.com.au
Portman recently reported a net profit after tax of $10.0 million for the half
year to June 2003, down from $11.1 million in the previous corresponding period.
Before adjustments relating to the carrying value of certain ore stockpiles, the
net profit after tax was $7.0 million. What's the outlook for the December half?



MD Barry Eldridge

Cockatoo Island is unlikely to make a contribution in the current half, so the
result will very much reflect the contribution from Koolyanobbing. But Hi-P
fines sales will certainly come through, which should make the second half
result much better than the first.



Also, we have approximately 75 percent of our US dollar revenues hedged at a
rate a little over US$0.55 cents to the Australian dollar. And in the current
half we'll obviously receive the benefit of the ore price increase over the full
period, unlike the first half when we only received the benefit for half the
period.



corporatefile.com.au
Thank you Barry.



For previous Portman Open Briefings visit www.corporatefile.com.au



For further information on Portman Limited visit www.portman.com.au














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