have preferred to own and operate the railroad ourselves and to pay a higher royalty, but the State concluded that its interests were best served by the arrangement which was finally negotiated. SALES CONTRACTS This month we also signed 13-year agreements with 14 Japanese companies which provide for the delivery of coking coal from the Goonyella deposit at the rate of 2 1/2 million tons for the first year beginning in mid-1971 and increasing to 4 million tons in the second year and each year thereafter. In addition, upon satisfying certain conditions, we have the right to open up a second mine one year later from which we would ship 1 1/2 million tons for the first year and 3 million tons annually thereafter. This is the largest coking coal purchase ever made by the Japanese interests and to the best of my knowledge it is the largest coking sale ever signed anywhere. Certainly it is the largest investment commitment ever undertaken by Utah in a single enterprise in its history. The revenues to the participants in the venture on the 4 million ton basis will approximate $577 million over the 13-year period and will exceed $1 billion if we proceed with the second phase of the development. Cost escalation protection is provided, and these contracts represent a major addition to our mineral sales backlog. INVESTMENT REQUIRED The indicated investment has increased from the $100 million figure indicated in my August 1968 letter to the $110 million mentioned in the Annual Report, the difference being 11