4. adverse effects from discriminatory Government action and has drawn considerable encouragement from the fact that only recently after three trying year's of negotiations it signed a new agreement with the junta which will allow it to receive favorable tax treatment on a program which will expand pellet capacity and permit production of high quality slurry concentrates out of ore that would otherwise have to be sold as lower quality sinterfeed. For the moment we have no real cause for complaint against the Peruvian Government and we think that it is significant that it signed this contract without insisting on joint participation and did so with great fanfare and maximum publicity on national television with laudatory statements about the performance of Marcona in Peru. Whether this action signals a change in policy because of the Government disappointment with its failure to get other new mining projects underway or whether it is a recognition that Marcona's iron ore is a justifiable exception to policy I cannot know. I think it is reasonable to assume that the Government knows that iron ore is different than copper, for iron ore is sold under individually negotiated contracts and not at a world price and the transportation factor in iron ore is tremendously important. In today's shipping market the Peruvians would find it very difficult to compete in the world iron ore market without control of a fleet of ships such as Marcona has. It think that it is also important to put the Peruvian situation in perspective in our whole picture, for even in normal times Marcona derives a substantial amount of its income from ocean shipping. With the very high charter rates that are prevailing today Marcona will make much more profit out of its ships than out of its Peruvian mine, and we anticipate that Marcona's earnings will be up sharply this year.