ume in the United States in 1965 will not show substantial change over 1964, but the longer term outlook for construction, bolstered by family formations, rising personal incomes, and changes in living patterns, is distinctly favorable and gives some promise of changing the present unsatisfactory relationship between the industry's capacity to perform work and the amount of work available. Mining In appraising Utah Construction & Mining Co. major attention must be focused upon our mining activities, for mining is the major source of present income and more demonstratively a source of future changes in profit levels. In the first half of 1965 all of our mining operations go well, thanks primarily to higher volume and production cost improvements rather than to any impact from substantially higher prices that have affected other branches of the mining industry, such as the non-ferrous metals like lead, zinc, and copper. Uranium Our Wyoming uranium production is sold under contract through 1970 to the Atomic Energy Commission under the stretchout program. Uranium profits for the early months of 1965 have been ahead of those of last year because of the lower cost of ores fed to the mill. However, for the year as a whole we do not anticipate uranium earnings will equal 1964 levels because we must curtail production in line with the lower quantities that we can deliver annually under our "stretchout" contracts. We know that uranium will continue to be an attractive source of profits through the life of the present contracts, but the situation in 1970 cannot be predicted accurately at this time. There is an increasing and encouraging body of evidence that supports the view that the last half of the 1970s will see a peacetime demand for uranium 4 that may be equal or greater than the present government-derived demand and could indeed be greater than the industry's capacity to produce from the facilities now in existence. Informed people no longer debate whether this will occur, but confine the argument principally to when it will occur. The conservatives and I am among their numberbelieve that the likelihood is that productive capacity and inventory stockpiles will exceed civilian consumption for the first half of the 1970's, but my conviction on this point has been considerably shaken by discussions with ex-ecutives of major public utilities and with those of General Electric and Westinghouse, whose opinions have the kind of credibility that comes when people are "putting their money where their mouths are." Iron Ore Iron ore, both domestic and foreign, is riding the wave of high steel production in the United States and abroad, and our earnings in the first half of 1965 are responsive to this situation. Whether earnings in the second half can be sustained at these levels in the United States is questionable in the light of the buildup in steel inventories and the threatened strike in the steel industry. This threat of a second-half downturn is less serious in the case of Marcona Mining Company, whose production and shipments from its Peruvian mine should set a new record in 1965, barring any work interruptions in Peru. Marcona's present production capacity will be taxed to meet its 1965 sales commitments and profit margins show some improvement at the moment because of slightly better prices and improved product mix, partially offset by a trend to higher charter rates for ocean shipping. Copper Our stake in the copper industry comes from our 25% interest in the Pima Mining Company, and here we are enjoying some benefit from the peculiar pricing 5