S E R V I C E S T O T H E R E S O U R C E S I N D U S T R Y

SEDGMAN Limited A.B.N. 86 088 471 667

Level 2, 2 Gardner Close Milton QLD 4064 PO Box 1801 Milton BC QLD 4064 Facsimile: 61-7-3327 1999 Telephone: 61-7-3327 1800

Please quote our ref. no on all correspondence: Our Ref: Inv News ltr.doc File Ref: 1003

21 January 2008

The Manager Company Announcements Office ASX Limited

Dear Sir/Madam

ASX Code: SDM We enclose a copy of Sedgman’s January 2008 Investor Update which is currently being sent to shareholders.

Yours faithfully SEDGMAN Limited

Michael Rochester Company Secretary

For

per

sona

l use

onl

y

Welcome to Sedgman Limited’s Investor Update, the first of many as part of our enhanced shareholder communications.

Sedgman aims to be a leading provider of engineering, project delivery and operations services to the global resources industry. Our successes over the past year have shown this goal is attainable.

From our humble beginnings in 1979 as a Brisbane-based mining consultancy, we now have operations spanning the international coal and metalliferous sectors, nearly 600 staff and a market capitalisation of over $500 million.

The announcement in November 2007 of the signing of a $20 million design contract with Brazilian resources giant Vale (formerly CVRD) for its Moatize project in Mozambique, is evidence of our growing global presence.

Sedgman has established relationships with the world’s top five major diversified resource companies - Anglo Coal, BHP Billiton, Rio Tinto, Vale and Xstrata - which together account for over 20% of annual world mine production.

We have launched a focused international expansion targeting markets with potential for long-term growth, including Africa, China and South America.

On the domestic front, the coal boom continues to produce opportunities for Sedgman. This is evidenced by the level of activity within Sedgman Coal, which has never been busier.

Sedgman won a number of new coal handling and preparation plant (CHPP)contracts during calendar 2007, including the Lake Lindsay, Middlemount and Lake Vermont projects. Sonoma was also expanded to a record $180 million project.

“The Moatize project in Mozambique is evidence of our growing global presence”The Operations business unit now has six contracts, including the Sonoma, Middlemount and Millennium projects.

But Sedgman’s expansion is no longer restricted to coal; we are now leveraged to the international metalliferous sector due to the acquisitions of Pac-Rim and Intermet Engineering.

The two companies form part of our new division of Sedgman Metals, based in Perth, which has the potential to at least match Sedgman Coal in revenue and earnings.

Financially, fiscal 2007 was an outstanding year, with record combined

INVESTOR UPDATE - JANUARY 2008http://www.sedgman.com.au Level 2, 2 Gardner Close, Milton QLD 4064 AUSTRALIA P: +61 7 3327 1800 F: +61 7 3327 1999 E: mail@sedgman.com.au

revenue of over $371 million (up 57%) and record net profit of $20.9 million (up 60%). Sedgman declared a full year dividend of 7 cents per share, fully franked, and the launch of a dividend reinvestment plan from the fiscal 2008 interim dividend gives shareholders further opportunity to participate in the company’s growth.

The outlook for fiscal 2008 is excellent, with a forecast of record profits and cash earnings per share growth of 15-20%.

On a personal note, I would like to thank shareholders and staff for their strong support during my past nine years with Sedgman. With considerable regret, I have announced that I will not be renewing my contract upon its expiry on 1 September, by which time I will have spent 10 years as managing director.

Sedgman has grown exponentially over the past decade and I am confident that the board will find the right person to lead the company’s global expansion.

On behalf of the company, I would like to extend to you our very best wishes for the New Year.

Regards

Peter Hay Managing Director

MANAGING DIRECTOR’S REPORT

PETER HAY, Managing Director

SEDGMAN INVESTOR UPDATE - JANUARY 2008 // P1

In This IssueSedgman Coal P2

- Out of Africa - Record Sonoma Contract Signed

Sedgman Metals P3- Message From The COO - Intermet Flying High (And Far)

Our People P4- Dad & Dale - Sedgman To The Rescue

Investor Info P4

For

per

sona

l use

onl

y

The first Sonoma contract was awarded in September 2006 without a tender process, showing the client’s confidence in Sedgman’s ability to deliver.

Located at the northern end of the Bowen Basin, the Sonoma mine will produce both coking and thermal coal for QCoal and its joint venture partners.

According to QCoal, the first shipment is expected in January 2008 from the Abbot Point Coal Terminal near Bowen.

With rising coal prices and a continued need for coal infrastructure, demand is stronger than ever for Sedgman’s specialist skills.

Having worked with the industry’s majors, Sedgman is proud to have been selected by Vale for its world-class coal project which will be one of Africa’s biggest.

This will form the basis of Sedgman’s expansion into both the coal and metals sectors in the African region, working with our partner ELB Engineering Services, a South African engineering and project services company.

South Africa and Africa have a number of large coal projects of over 10 million tonnes per annum in the pipeline, offering Sedgman a significant growth opportunity.

RECORD SONOMA CONTRACT SIGNED

With the ink barely dry on the initial $75 million contract, Sedgman announced in August 2007 the expansion of the Sonoma contracts to a total value of more than $180 million – the largest independent contracts ever awarded to the company.

The record agreement at the Sonoma mine near Collinsville, Queensland, was for the design and construction of an 800 tonnes per hour coal handling and preparation plant and a five-year operations agreement.

OUT OF AFRICA

Moatize has emerged as one of the world’s leading coal provinces for both thermal and coking coal. Located in Mozambique’s Tete Province, the area’s biggest operator is Vale, which reportedly plans to export 15 million tonnes of coal a year from as early as 2009 from its US$2 billion project.

Second only to BHP Billiton in the global industry, Vale has ambitious international expansion plans based on a five-year, US$59 billion investment program targeting 30 greenfield and brownfield projects.

Joining the Brazilian giant in its growth will be Sedgman Coal, which will undertake the detailed design and documentation of a 4,000 tonnes per hour process plant in Moatize.

The plant will be one of the largest single-building, four module coal preparation plants in the world, and about twice the size of Australia’s biggest plant at Anglo Coal Australia’s Dawson mine near Moura, which is also a Sedgman design.

The Moatize deposit is estimated to contain over 2 billion tonnes of metallurgical and thermal coal. Government approval for Vale’s 25-year mining contract was announced on 28 June 2007.

Sedgman Coal

Sedgman Chairman Russell Kempnich (right) and Luiz A. M. Cossa, Supply Chain General Manager, Vale, seal the Moatize deal and the start of a new partnership.

With rising coal prices and a continued need for coal infrastructure, demand is stronger than ever for Sedgman’s specialist skills.P2 // SEDGMAN INVESTOR UPDATE - JANUARY 2008

For

per

sona

l use

onl

y

Sedgman Metals

MESSAGE FROM THE COO

Capitalising on the many opportunities presented by the booming global metals market is the job of newly created Sedgman Metals, based in Perth, Western Australia.

Sedgman has a long and proud record in the coal industry, where it has operated successfully since 1979 as a leading provider of engineering services.

Having built a strong reputation for excellence in coal, Sedgman is now determined to do the same in the broader metalliferous sector.

Capitalising on the many opportunities presented by the booming global metals market is the job of newly created Sedgman Metals, based in Perth, Western Australia.

By using the innovative systems developed by Sedgman Coal and exploiting technical synergies, we aim to create a Sedgman look-alike in the metals sector and achieve a step change in growth for the whole business.

The new division has been created following the successful acquisitions of ore crushing and screening services provider Pac-Rim and minerals process engineering and project management company Intermet Engineering. Based in Townsville, Pac-Rim currently has about 125 staff, while Perth-based Intermet has around 85.

The four key strategic areas for Sedgman Metals are client services, business excellence, HSE (health, safety and environment) and people.

The securing of office space in Perth for over 300 staff is a sign of our growth plans, with the booming Western Australian resources industry offering opportunities to expand on the division’s Australian and international projects.

“Creating opportunities for clients” is the new slogan adopted by Pac-Rim, but it applies equally to the whole Sedgman group as we move into a new era of growth.

Recently, Pac-Rim won a new contract at Macmin Silver’s Twin Hills Silver Mine near Texas, southern Queensland.

The contract to design, construct, commission and operate a screening facility is for an initial one-year term, with a two-year extension option.

Sedgman is pleased to welcome Macmin Silver as a new client, adding to the company’s diverse client base.

INTERMET FLYING HIGH (AND FAR)

Sedgman’s $32.75 million purchase of minerals process engineering and project management company Intermet Engineering in July 2007 was another successful outcome of our pursuit of new markets through complementary acquisitions.

Established in 2001, Intermet has developed a reputation for providing innovative, cost-effective designs and solutions for its range of clients in the minerals sector.

As of June 2007, the company’s order book had an installed capital value of around $290 million, with a $600 million project pipeline across a range of commodities including gold, silver, lead, zinc, copper and iron ore.

Intermet’s services include metallurgical test work, detailed engineering and

design, process engineering, project management, feasibility studies, construction support and commissioning and plant optimisation and consultancy.

With over 80 per cent of its projects located overseas, Intermet’s staff have well-worn passports having worked in Africa, Asia, Europe and South and Central America.

Importantly, the shareholders and key management team who built the original business have remained with Intermet and also gained an equity interest in Sedgman, ensuring their interests are aligned with the rest of the company’s shareholders.

With Sedgman’s backing, Intermet now has the capacity to compete for larger projects, expand its service profile and grow into its new and larger premises through increased investment in resources and systems development.

MARK DUFFY, Chief Operating Officer, Sedgman Metals

SEDGMAN INVESTOR UPDATE - JANUARY 2008 // P3

For

per

sona

l use

onl

y

DAD & DALE

The story of the Dawson project is an exciting one for Sedgman. Awarded in April 2006 to the Thiess Sedgman Joint Venture, the $442 million contract to design, construct and commission a new CHPP at Anglo Coal Australia’s Dawson mine near Moura was the largest such contract ever awarded in the Australian coal industry’s history.

But the Dawson story is more than dollars and cents; it’s also a story of a father and son team who have played their own key roles in Dawson’s history.

In October 2007, retiree Barry Hoffman joined his son Dale - Sedgman Coal team leader, process - on a tour of the new facility. It was a real eye opener for Barry, who spent his career working at the old Moura Preparation Plant.

“I started here in 1968, and after 37 years working on the old plant, retired and left the new Dawson plant to be built,” Barry said.

“The old plant had been going for 44 years and I suppose it was time to retire it, although I doubt the new plant will have the character the old one had.”

The new plant will be capable of processing over 15 million tonnes per annum of raw coal, compared with its predecessor’s 12 million tonnes.

Born in Moura, Dale helped design the new plant for Sedgman – something that made his dad extremely proud.

“Just to watch it come up from the ground with somebody so close that had a key role in the team that designed it was great,” Barry said.

“With Dale having done his schooling here in Moura, he can stand up in front of all his mates and say, ‘Hey, I’ve done this,’ so I’m definitely proud of the job he’s done.”

Having left Moura to embark on an engineering career and returned a decade later to put his knowledge into practice, Dale derived a great deal of satisfaction from the record-breaking plant.

“Being involved in one of the biggest preparation plants in Australia, but also being able to do it in my hometown, has been quite a remarkable pleasure,” he said.

With Sedgman’s strong order book and record number of project studies underway, Dale won’t be able to rest on his laurels for long.

SEDGMAN TO THE RESCUE

Operating in regional areas brings with it special challenges and responsibilities. As a responsible corporate citizen, Sedgman is committed to supporting the communities in which it operates, through the sponsorship of valuable community services.

Few are more valuable than emergency medical services such as those provided by the Central Queensland Helicopter Rescue Service (CQ RESCUE).

CQ RESCUE plays a vital role to the more than 135,000 people in the central Queensland community by providing rapid medical assistance to those in need, thereby helping to reduce the likelihood of permanent impairment.

Three air crewmen, two rescue crewmen and three pilots are on call 24 hours a day to tend to medical emergencies, usually within a 300-kilometre radius of Mackay.

The prompt medical assistance offered by CQ RESCUE is designed to lessen the prolonged effect of trauma suffered by patients as a result of illness and injury.

During the 2007 financial year, the CQ RESCUE crew carried out 391 missions and transported 369 patients.

The crew travelled over 57,000 nautical miles during its missions, or the equivalent of six flights from Sydney to London.

Sedgman is proud to be a major sponsor of this life-saving organisation, and encourages support of the service.

Our People

INVESTOR INFO

Subscribe to Sedgman NewsKeep up to date with all the latest news from Sedgman by subscribing to our email list. See our website (http://www.sedgman.com.au) for details.

Share registryContact Computershare Investor Services Pty Ltd for any inquiries regarding your Sedgman shareholding.

You can reach Computershare at: Toll-free: 1300 552 270 Fax: (07) 3237 2152 or by writing to: Level 19, 307 Queen St Brisbane, Qld, 4000

DALE HOFFMAN (left) and BARRY HOFFMAN

“Being involved in one of the biggest preparation plants in Australia, but also being able to do it in my hometown, has been quite a remarkable pleasure”

P4 // SEDGMAN INVESTOR UPDATE - JANUARY 2008

For

per

sona

l use

onl

y