year shipments were 6.6 million tons compared to 6.8 million tons in fiscal 1971 after-tax earnings realized from these revenues were slightly depressed reflecting the decline in shipments for the next several years coal delivery rates at navajo will depend upon the operating reliability of this new air pollution equipment and upon the timing and nature of a program which is expected to modify the pollution control systems of the two newer generating units the navajo mine is now the largest coal mine in the united states with an annual production capability of some eight million tons even at this rate sales through the life of the power plant will require only one third of the approximately 1 1 billion tons of subbituminous coal contained in the navajo reserves negotiations during the past year with subsidiaries of pacific lighting corporation and texas eastern transmission corporation have established the terms under which nine million tons of coal from the remaining reserves would be sold to these companies each year to supply a plant which would manufacture synthetic gag however construction of this gasification plant is subject to certain approvals and the satisfaction of other conditions concurrently utah has agreed to set aside temporarily the balance of its navajo reserves for several additional gasification plants which are also under consideration by these same companies on june 1 1972 western coal company contracted with utah to mine coal reserves owned by western coal company and located eight miles north of the navajo mine staffed and operated by the navajo mine this operation will initially mine and deliver steam coal at a rate of approximately 1 3 million tons per year for the nearby san juan power plant now under construction by public service company of new mexico and tucson gas & electric company shipments are scheduled to commence in the first half of 1973 the contract terminable in six years at the option of either utah or western coal company will otherwise continue until all of western coal company's coal reserves are mined reserves of steam coal held by utah near craig colorado are the subject of discussions with a group of utilities wishing to build a power plant nearby negotiations now in advanced stages will if successfully concluded require deliveries by 1978 at the earliest coking coal sharp increases in coking coal deliveries provided the main thrust of new earnings strength in 1972 as goonyella and peak downs two new mines joined forces with the blackwater mine to boost total shipments from utah operations to 7.26 million tons in 1972 140 above 1971 levels these three coking coal mines in the vast bowen basin of central queensland australia have become and should continue to be important and reliable supply sources for japanese and european steel mills which require this product as an ingredient of the charge fed into their blast furnaces all of the mines are modern open-cut operations with efficient coal preparation facilities to improve the quality of the delivered product located as they are in relatively unpopulated areas these mines have required substantial investment in infrastructure consisting of roads townships railroads water power and communications services by financing these facilities and providing substantial rail freight revenues to the state of queensland utah plays an important and constructive role in the economic development of the region ownership of utah's coking coal interests and its other significant australian activities is maintained through utah development company a 90 owned subsidiary of utah international utah mining australia limited a company owned by some 1 2,000 australian investors owns the other portion of utah development company the blackwater mine wholly owned by utah development was the first of utah's australian coal operations with exports beginning in 1968 leases from the queensland government allow 100 million tons of coal to be exported from blackwater the production capacity of this mine is now in excess of three million tons per year as a result of an expansion program now manufacturing of steel is a spectacular process which begins in the blast furnace where coking coal performs the critical role of reducing the iron ore to a metallic state processed coking coal is conveyed from the new peak downs preparation plant al full capacity this plant will transform taw coal into five million tons of producl coal each year