coking coal. In 1964 we negotiated a contract with Japanese interests to supply coking coal from this deposit and last year agreed to increase the quantity so that we are now committed to deliver 21. 4 million tons over a 10-year period at the rate of 700,000 tons the first year, 1.5 million tons the second year and 2.4 million tons thereafter. The first shipments were made in January this year. We do not expect the Blackwater mine to add much to our profits this year but we believe that it will add significantly to our mining income in the years ahead. We are still exploring a vast area of over a million acres in Northern Queensland and here the indication is that our reserves are of much greater magnitude. We are currently negotiating a lease for the better deposits in this area with the Queensland Government and the Japanese purchasers have indicated a strong interest in contracting for this coal when we are in a position to do so. It would be premature to attempt to quantify this venture except to say in general terms that it will require a large investment and a large tonnage under contract. A ready market for coking coal exists in Japan where the steel industry is expanding rapidly and where the indigenous coal is scarce, expensive, and of low quality. The Japanese have for years been bringing in high quality coking coal from West Virginia both for use as "medicine coal" to blend with other coals and to augment the total supply. Australia is a natural source of supply for Japan, having a transportation advantage. In the northern area, Mitsubishi Trading is our partner with a 15% interest, and the Japanese steel mills are following our progress very closely. -13-