11- world have learned that low cost pig iron is produced from high grade blast furnace feed obtained from ores that have been upgraded in physical and chemical characteristics before they are fed to the blast furnace. As a mine Marcona has many advantages - ample reserves of high-quality ore economically mined and beneficiated, located in an ideal climate permitting 12 months operations. The iron ore business is in large measure the transportation business, for the cost of moving ore from mine to market often exceeds all other costs combined. Overland transportation is expensive compared to ocean transportation where large vessels specially designed for the iron ore trade can be employed. Not the least of Marcona's advantages is the proximity of the mine to tidewater and the depth of water at its loading docks. The mine is only some 10 miles from the ocean and the bulk of the ore moves part of the way by downhill conveyor over the most difficult terrain. This provides a comparative cost advantage over those mines that must move their ore greater distances by railroad or truck, and which are limited to the use of shallow draft vessels. Because of the depth of water at its dock Marcona ore can be accommodated in the largest vessels employed in the trade today, and this factor has allowed Marcona's ore to compete successfully with mines which are located closer to market but whose output is forced to move in less economical vessels. Recognition of the importance of transportation costs caused us to enter into the field of ocean shipping to take the lead in design and construction of specialized vessels to lower our shipping costs. In the beginning all of