Hancock Natural Resource Group Releases Hancock New Forests Australia

MELBOURNE, July 24, 2001-Hancock Natural Resource Group Inc (HNRG) and Hastings Fund Management today launched a $200 million capital raising effort for Hancock New Forests Australia Pty Limited (HNFA) to develop a portfolio of newly planted Australian native trees species on previously cleared marginal farm land. These reforestation projects will be managed as a carbon pool to make carbon sequestration credits available to investors.

Based upon the types of reforestation projects (and the tree species) proposed to be undertaken, HNFA currently projects that the carbon credit yield will be in the order of 50-55,000 tonnes of carbon dioxide equivalent per annum for 20 years (beginning in 2004) per $AUD20 million invested.

Shares in HNFA will only be offered to sophisticated investors within the meaning of the Australian Corporations Act with a minimum subscription of $10 million. Potential investors are expected to include companies who are seeking to manage their greenhouse gas emissions.

HNRG is the world's leading forest and agricultural investment management organisation for institutional investors. As of March 31, 2001 it managed $US2.7 billion of timberland in the United States, Canada and Australia.

The chief executive of HNRG, Mr Bill Coleman, said Hancock New Forests Australia sets a new bar for forestry investment, for the treatment of carbon sinks and for the whole concept of environmental investment.

"We see the investment in Hancock New Forests Australia as a key part of the combined solution to climate change, dryland salinity and biodiversity conservation," he said.

"Hancock New Forests Australia aims to plant native tree species, and manage those species to build up a large pool of carbon sequestration credits, and ultimately be managed in perpetuity via the revenue from long term sustainable timber harvesting."

"It will also pilot projects in the Murray-Darling Basin to push forward the idea of salinity credit trading through revegetation."

Hastings Fund Management managing director Mr Mike Fitzpatrick said private investment was the key to successfully addressing our national environment challenges.

"We are pleased to market Hancock New Forests Australia and see this as part of a trend towards investments that have potential for commercial and environmental returns," he said.

"Many industries are looking at investment in forests as a means of managing their net greenhouse gas emissions. Planted forests are commercially attractive because they offer returns from forest products independent of the value of any tradeable credits."

HNFA is managed by HNRG and plans to engage top Australian forestry managers in each region. HNFA expects to acquire reforestation projects in Queensland, New South Wales, Victoria, South Australia and potentially, Western Australia.

"We have hired key staff with the skills to manage this investment, undertake the carbon and environmental accounting and to provide a high level of service to the investors. This group will be based in Sydney," said Mr Coleman.

Shares in HNFA will be offered in Australia (through Hastings Funds Management) and in Japan (through Mizuho Securities Co. Ltd.) It is expected that the offering will close by April 1, 2002.

No offer of the Shares in HNFA is being made in the United States and no sales will be made to any U.S. Person as defined in Regulation S under the Securities Act of 1933.