CSR Limited (CSR) confirmed today that it has approved a $15 million project to enable fuel ethanol production at CSR’s Sarina, Queensland distillery. Currently, raw ethanol produced at Sarinais reprocessed to fuel grade material at the company’s facility in Melbourne. The project, awarded to contractor Bilfinger Berger Services, will enable the Sarina distillery toproduce 32 million litres of fuel grade ethanol out of the company’s total ethanol capacity of 60 million litres and is targeted for completion in July 2006.

CSR is one of the two largest producers of ethanol in Australia, with its growing fuel ethanol business currently supplying over 160 petrol stations.

CSR Ethanol General Manager Gavin Hughes said, “This project significantly increases our fuel ethanol production while providing an attractive return forshareholders.”

Demand for fuel ethanol continues to grow with the support of the Australian and Queensland Governments, major oil companies and automobile manufacturers topromote the benefits of this renewable and domestically produced fuelsource.

“CSR sees itself as a major player in the growing fuel ethanol industry and thisproject is the first stage in CSR’s strategy to meet expected demand over thenext twelve months.Additional projectsto further expand capacity are under review,” MrHughes said.