While a $115.8 million write-off on MIM's two loss-making zinc smelters was partially offset by an $82.3 million gain from a devaluation of the Argentine peso, which benefited its half-owned Alumbrera copper-gold mine, the group's expanding coal operations and higher prices underpinned the profit result.

MM expects coal production to increase by a further 2 million tonnes in 2002-03, subject to market demand, while higher coking coal prices are balancing falling thermal coal prices.

Higher sales at NCA (up 13%) and Oaky Creek (up 12%) in 2001-02 combined with higher Australian dollar prices for both coking coal (up 22%) and thermal coal (up 17%) to raise EBIT from the group's coal division to $421.1 million from $249.6 million the year before.

At Oaky Creek, EBIT increased 57%, with production (up 12% overall) from the Oaky North mine and higher-cost opencut operations compensating for lower output from the No 1 mine.

Reduction in output from the No 1 mine also contributed to increased costs and was associated with the difficult mining conditions encountered towards the end of mining in the No 1 reserve area and during the transition phase of relocating the longwall operations to the new South East extension area.

At NCA, an 84% increase in EBIT resulted from record production (up 25% overall) and sales combined with further improvement in costs compared with the previous year.