prices now prevailing. Pima also has under consideration a management recommendation that would increase capacity to 5 3, 000 tons daily in order to treat low grade ore that is now being mined but stockpiled because of the absence of milling capacity. Marcona's contribution to Utah's profits in 1969 equalled the record year of 1968 with increased profits from shipping offsetting some decline in profits from its iron ore mining. Marcona took delivery of two new 130, 000 DW ton combination ore-oil carriers in November 1969 and anticipates the delivery of a third similar vessel later in 1970. Ore shipments in 1969 were 9. 6 million tons, up 15% over the prior year. Marcona hopes to conclude a new agreement with the Peruvian government allowing it to complete a $25 million expansion program that will increase its production capacity to 10 1/2 million tons and generally upgrade the quality of beneficiated products produced. If conditions in Peru continue to leave Marcona relatively unaffected, Marcona's earnings should be maintained in 1970. One of the new developments in Marcona is "Marconaflo", a method of loading and unloading ore in slurry form that has excited great interest. Certainly in iron ore and possibly with other materials "Marconaflo" holds promise of substantial savings in operating costs and potential savings in capital costs on some projects, for it has the effect of freeing an ore ship from the necessity of loading and unloading along a dock where deep water is available. It is too early to assess accurately its potential but it may be very great indeed. We are primarily relying on improved earnings from Utah's mining -13-