Given the current uncertainty surrounding capital allocation I wanted to highlight that we have one remaining commitment to CLP before the end of this calendar year - last half Dec shipment of 70,000mt.

All things being equal we would be looking to source this cargo from China as they still represent the cheapest origin of coal for this business. However, as you are aware all
payment on contracts out of China are currently done via L/C and we are unlikely to be able to change in short-term, especially given the current focus. If we were to look to Australia to procure this shipment then there is a better chance of procuring coal with payment via T.T (although some producers are talking about L/C requirements given today's situation), however we will be paying a premium for this coal. Economics are as follows:

Sourcing from China - $31.00 delivered Hong Kong - approx
Sourcing from Oz     - $32.50 delivered Hong Kong - approx

Given abve we would like to concentrate on stemming from China but obviously some L/C capacity will be required. - total value would be approx $2mill
Please advise where we stand on this.

FYI - we are currently working on a buy back deal with CLP whereby we purchase 280mmt of our commitment to supply for first half of 2002 - this will reduce our working capital requirements.

Appreciate your thoughts
Jez Peters


Enron Coal Asia Pacific Pty Ltd
+61 2 9229 2361 (direct)
+61 405 146 027 (mobile)
+61 2 9229 2350 (fax)
jez.peters@enron.com

This e-mail/fax and any files transmitted with it may contain confidential and/or priveledged material and is intended only for the person or entity to which it is addressed. Any review, transmission, dissemination or other use of , or taking of any action in reliance upon, this information by persons or entities other than the intended recipient is prohibited. If you have received this e-mail/fax in error, please notify the sender immediately and delete this material from all known records.