Company Announcements Office
The Australian Stock Exchange Limited
Level 4
20 Bridge Street
Sydney NSW 2000

Re: Leighton Contractors Signs Interim Agreement To Build Stanwell Magnesium Plant

Dear Sir,

Please find attached a copy of a media release to be issued today Leighton Contractors Pty Limited, announcing that Australian Magnesium Corporation Limited (AMC) and Leighton Contractors have signed an interim Engineering, Procurement and Construction (EPC) Contract to develop the $1.3 billion Stanwell Magnesium Plant in Rockhampton, Central Queensland. Leighton Contractors is a wholly owned subsidiary of Leighton Holdings Limited.
Yours faithfully,


A.J. MOIR
Company Secretary


Leighton Contractors Signs Interim Agreement to Build Stanwell Magnesium Plant

Issue Date: 6 May 2002
Issued by: Leighton Contractors Pty Limited

Australian Magnesium Corporation Limited (AMC) and Leighton Contractors Pty Limited have signed an interim Engineering, Procurement and Construction (EPC) Contract to develop the $1.3 billion Stanwell Magnesium Plant in Rockhampton, Central Queensland.

Leighton will lead the project development as Principal Contractor and manage detailed design, engineering, procurement and construction services.

AMC and Leighton have agreed to negotiate exclusively on all key processes for the Stanwell Magnesium Plant and anticipate signing the EPC Contract in the June quarter of 2002.

AMC Chief Executive Officer, Rod Sharp, said the Stanwell engineering and contracting team led by Leighton brings together a wealth of experience in major project construction, chemical processing and magnesium industry development.

“Leighton has the reputation of building world-class projects, the experience of working in Central Queensland and the commitment to taking a leading role in the development of a new industry for Australia,” Rod Sharp said.

Leighton Contractors’ Managing Director, Bob Merkenhof said, “Leighton is delighted to be selected to deliver the Stanwell Magnesium Plant for AMC. This project will bring together our strong engineering and major project development experience to deliver a quality facility for AMC.”

Bob Merkenhof explains, "We have been working together with AMC for some time and share their vision of delivering a world class, state-of-the-art magnesium facility.”

Leighton Queensland General Manager, Laurie Voyer, said his team was well equipped to manage and deliver the project.

"Design and engineering aspects of the project are underway and we have assembled an internationally experienced and committed team.

"Aided by the operating experience of the Gladstone Demonstration Plant, our team will further the excellent work already undertaken by AMC and its alliance partner CSIRO," he said.

Mr Voyer added that initial construction and site establishment works would commence at Stanwell in the coming months with construction expected to be complete by the end of 2004.

"During the construction period many hundreds of jobs will be created with employment expected to peak at about 1200 jobs in late 2003.

"This project will provide employment opportunities and enormous economic benefits for local people in Rockhampton and its surrounding communities, as well as across the State," Laurie Voyer said.

Leighton Contractors is an Australian market leader in the delivery of complex infrastructure, major project development, and contract mining and currently has in excess of $1.2 billion worth of work in hand and employs approximately 1,800 people.

-ends-

For media information, contact:
Annie Stante
Leighton Contractors
Manager, Corporate Affairs
Telephone: (02) 9925 6675 or (0413) 316 948

Stanwell Magnesium Plant
Project Overview
The Stanwell Magnesium project involves the engineering, procurement and construction of a $1.3 billion magnesium metal plant at Stanwell, near Rockhampton in Central Queensland. It is located about 30 kilometres southwest of Rockhampton and will be built in a rural area adjacent to the Stanwell Power Station.

Through its Stanwell Plant, Australian Magnesium Corporation (AMC) aims to become the leading producer and supplier of lightweight magnesium alloy products to the world's automotive industry.

AMC anticipates the facility will become fully operational in about 2006 and expects it to become the world's largest magnesium plant producing 97,000 tonne per annum of magnesium alloys and pure magnesium.

Construction Overview
Construction of the Stanwell Magnesium Plant is likely to commence as early as mid June 2002. The plant will take about three years to complete.

Principal Contractor’s Role
As Principal Contractor, Leighton Contractors will manage all engineering, procurement and construction components of the plant’s development with its selected partners. The following companies have already begun working with Leighton to develop the project:

 

Components
The Plant has been broken into Areas according to the magnesium processing function. The following outline describes each Area.

Leach and Purification Plant (Area 20)
The Stanwell Plant will receive magnesite ore from the Kunwarara mine. This raw magnesite is crushed and leached with Hydrochloric acid to form a solution known as purified magnesium chloride brine. Impurities are removed from the product through filtration and then stored.

Dehydration Plant (Area 30)
The Dehydration Plant is the heart of the Processing Plant. This area contains world-first technology and equipment developed by Australian Magnesium Corporation (AMC) and CSIRO. Here, the Magnesium chloride brine is dehydrated to remove water. The dehydrated product is then dried and calcined at high temperature to produce a purified magnesium chloride powder.

Electrolysis (Area 40)

The electrolysis plant will turn the magnesium chloride powder into molten magnesium metal.

Magnesium Metal Handing (Area 50)
This area transforms the molten magnesium metal into magnesium ingots in various shapes and sizes.

Utilities and Services (Area 70)
A common utilities and services system will function throughout the entire plant.

Civil works (Area 80)
The civil package will manage the site preparation, general earthworks, road works, drainage, pavements and services for the entire plant.

-ends-